Who Are the Working Poor?

by Jessica Nelson

February 25, 2020

The number of working poor in the United States surged up 41 percent between 2007 and 2012 before beginning to decline again in 2013. By 2017, the number of working poor dropped 7 percent below the level in 2007, prior to the Great Recession. The working poor are individuals who were in the labor force for at least 27 weeks during the year, but still had incomes below the official poverty level. About 6.9 million people fit that definition in 2017, finally falling below the pre-recession level of 7.5 million in 2007. The working poor accounted for 4.5 percent of all people who were in the labor force 27 weeks or more in 2017.

These figures come from the Bureau of Labor Statistics’ (BLS) annual Profile of the Working Poor.

Those who were usually employed part time were more likely to be among the working poor. The working poor rate was 2.9 percent for those workers who were usually employed full time, while it was 10.9 percent for those usually employed part time.

Younger workers were more likely to be poor. In 2017, the working poor rate by age group was highest for those ages 16 to 19 (8.4%) and 20 to 24 (8.5%). It then declined with each successive age group. Fewer than 4 percent of workers over the age of 45 were among the working poor, and the rate dropped to 1.5 percent for workers ages 65 and over.

Nationally, slightly more women were considered working poor than men in 2017. In addition, women who head families were more than twice as likely to be among the working poor as men who head families.

Workers with higher levels of education are less likely to be among the working poor. Very few college graduates who were in the labor force for 27 weeks or more in 2017 were among the working poor (1.5%), while 13.7 percent of those with less than a high school diploma were among the working poor.

A Higher Share of Part-Time Workers Are Poor

About half (54%) of those characterized as working poor in 2017 were usual full-time workers. Two out of five were usual part-time workers. Many of these workers were voluntarily working part time. Back in 2013, among the working poor, voluntary part-time workers were still outnumbered by those involuntarily working part time who would have rather had full-time work. By 2015 and 2016 that trend flipped, with more than half of part-time workers who met the definition of working poor voluntarily working part time.
While many of the working poor were usual full-time workers, these workers only accounted for 2.9 percent of all workers who usually work full time. In contrast, 10.9 percent of usual part-time workers fit the description of the working poor. For voluntary part-time workers, the working poor rate is 8.9 percent, but the rate more than doubles for involuntary part-time workers – the working poor account for 18.4 percent of all involuntary part-time workers.

Being in the labor force the entire year made little difference in 2017 in the likelihood of being among the working poor. In total, the working poor rate for those in the labor force 50 to 52 weeks was 4.0 percent, compared with 4.5 percent for those in the labor force at least 27 weeks.

Young Adults and Women More Likely to Be Poor

Young people have the highest working poor rates. The rate among those ages 16 to 19 is 8.4 percent, and 8.5 percent of workers ages 20 to 24 are among the working poor. The working poor rate then retreats with each successive age group.
Women are more likely to be among the working poor than men. Overall, women’s rate was 5.3 percent in 2017, while men’s rate was 3.8 percent. Women’s working poor rate is higher than men’s in every age group, though the gap narrows considerably for workers ages 55 and over.

The difference in working poor rates between sexes is greatest for the youngest workers. Women’s working poor rate is at least 3.0 percentage points higher than men’s through their mid-30s. The working poor rates for men and women become closer as workers age – possibly highlighting the differences between sexes in family care responsibilities and their effect on earnings, especially for the nation’s younger working women.

Family Structure Plays a Role

For families, the presence of children under 18 has a large impact on the likelihood of being among the working poor. Families with children under 18 and just one family member in the labor force for 27 weeks or more were nearly six times more likely to live in poverty than those without children.

Married-couple families are the least likely of all family types to be among the working poor, with a rate of 3.0 percent overall. Those with children under 18 years have a higher rate (5.0%) than those without children (1.2%).

Families maintained by women have a much higher rate than average – 16.0 percent were among the working poor in 2017. The rate surges to 22.4 percent for these families when children under 18 are present. Without children, families maintained by women have a working poor rate that is much closer to the average (5.1%).

While families maintained by men have a higher rate than married-couple families, it doesn’t come close to the rate for families maintained by women. Overall, 7.1 percent of families maintained by men were among the working poor in 2017. Just like with other groups, rates are higher for families with children under 18; 10.1 percent of these families were among the working poor, while just 3.9 percent of those without children fell into that category.

Education Reduces Likelihood of Being Poor

It is often said – and with good reason – that education pays. People without a high school diploma are much more likely than other groups to be among the working poor. Among workers with less than a high school diploma who were in the labor force at least 27 weeks, 13.7 percent were among the working poor in 2016. High school graduates, on the other hand, had a working poor rate of 6.9
percent. The rate for those with some college but no degree was 6.0 percent. People with associate degrees had a working poor rate of 3.8 percent. Of those workers with bachelor’s or higher degrees, only 1.4 percent were among the working poor.
Men have lower working poor rates at all levels of education, except among those with bachelor’s or advanced degrees, where the rate is the same 1.5 percent for both men and women. Working poor rates were the highest for workers with less than a high school diploma, where 15.8 percent of women and 12.4 percent of men were among the working poor. Rates differed the most between genders among high school graduates – for these workers, women’s working poor rate was more than 4 percentage points higher than for men.

The number of working poor in the U.S. and working poor rates have returned to lows last seen prior to the Great Recession. In 2007, 5.1 percent of U.S. workers in the labor force for 27 weeks or more had income below the poverty threshold. The rate peaked at 7.2 percent in 2010, and declined to 4.5 percent in 2017. With strong job growth in the last several years and the unemployment rate near record lows from 2017 through the present, the working poor rate is likely to improve further in the next couple of years.

 


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