Who Are the Working Poor?August 12, 2021
With growing discussion of a post-pandemic labor shortage and slowing jobs recovery, it makes sense to check in on those people in the workforce who weren’t doing well entering the pandemic. By 2019, people characterized as the working poor made up 4.0% of the U.S. labor force, the lowest share since at least 1986, when this data series began. 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 6.3 million people across the country fit that definition in 2019.
We won’t have figures for 2020 until April 2022, so the effect of the pandemic on this statistic is still unknown. However, service sectors lost the most jobs in the pandemic recession, and also bore a high cost in terms of virus risks on the job. Workers in service occupations accounted for one-third of the total number of working poor in the U.S. in 2019. These workers started the recession with one of the highest rates of working poor across occupation groups, at 8.2%. On top of severe job losses at the onset of the pandemic, service occupations, like those in restaurants, salons, theatres, and gyms, are by their nature not easily worked from home. Thus, they bore a long-lasting impact with closures and limited reopenings.
These figures come from the Bureau of Labor Statistics’ (BLS) annual Profile of the Working Poor.
Nationally, slightly more women (4.5%) were considered working poor than men (3.5%) in 2019. In addition, women who head families were more than twice as likely to be among the working poor as men who head families.
Black or African American workers and Hispanic or Latino workers are more likely to face poverty while also working, with rates at 7.2% and 7.0%, respectively, in 2019. Black or African American women had the highest working poor rate, reaching 8.9%. This was also the largest difference between sexes, as Black or African American men had a rate of 5.2% in 2019. Among Hispanic or Latino workers, 7.1% of women and 6.9% of men met the definition of working poor.
Asian workers of both sexes had the lowest working poor rates, at 2.3% among women and 2.4% among men. This was also the smallest difference between sexes in the rate of working poor. Among white workers, 3.7% of women and 3.3% of men were considered working poor.
Those who were usually employed part time were more likely to be among the working poor. The working poor rate was 2.7% for those workers who were usually employed full time, while it was 9.8% for those usually employed part time.
Younger workers were more likely to be poor. In 2019, the working poor rate by age group was highest for those ages 16 to 19 (7.4%) and 20 to 24 (7.6%). It then declined with each successive age group. Fewer than 3% of workers over the age of 45 were among the working poor, and the rate dropped to 1.3% for workers ages 65 and over.
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 2019 were among the working poor (1.4%), while 12.8% of those with less than a high school diploma were among the working poor.
Service Workers Make Up the Largest Cluster of Working Poor
Workers whose longest-held occupation is a service job accounted for one-third of the working poor in 2019. Service occupations had a working poor rate of 8.2%, which wasn’t the highest rate, but as they’re one of the larger groups of occupations, they accounted for the largest cluster of working poor.
While workers in service jobs made up one-third of the overall working poor in the U.S. in 2019, for women the situation was much worse. Women whose longest held occupation was a service job accounted for 45% of the women classified as working poor. Among men, those in service jobs accounted for 25% of the total. Women in service occupations had a working poor rate of 9.8%, compared with 6.2% of men in service occupations, one of the larger gaps between the sexes. Another large gap occurred in sales and related occupations, where 6.6% of women and 2.7% of men were classified as working poor.
The highest working poor rate was among farming, fishing, and forestry occupations, at 11.2%. This group of occupations is about 5% of the size of service occupations, so overall it accounts for a lot fewer of the working poor than service jobs. The gap between sexes is large, however, with women experiencing a 13.7% working poor rate compared with 10.5% among men. Workers in management, business and financial occupations, and those in professional and related occupations, are much less likely to be among the working poor, with rates of just over 1%. Workers in these groups also experience less disparity in working poor rates between men and women.
A Higher Share of Part-Time Workers Are Poor
People classified as working poor made up 2.7% of all workers who usually work full time. In contrast, 9.8% of usual part-time workers fit the description of the working poor. For voluntary part-time workers, the working poor rate was 8.1%, but the rate more than doubled for involuntary part-time workers, reaching 16.8%.
While part-time workers were more likely to be poor, the part-time workforce is much smaller than the usual full-time workforce. More than half (55%) of those characterized as working poor in 2019 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.
Being in the labor force the entire year made little difference in 2019 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 3.6%, compared with 4.0% 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 was 7.4% in 2019, and it was 7.6% among workers ages 20 to 24. 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 4.5% in 2019, while men’s rate was 3.5%. Women’s working poor rate is higher than men’s in every age group except the eldest; among workers ages 65 and over women and men are just as likely to be among the working poor.
The wide gap between sexes for workers ages 25 to 34 likely speaks to earnings gains among men as they complete education and develop in their careers. Women’s working poor rate drops in the mid-20s age group, but not as quickly as men’s rate. This is likely due to the disparate effects on women of childbearing and family care responsibilities. The gap between sexes narrows with the 35 to 44 age group and older groups.
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 five 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 2.4% overall. Those with children under 18 years have a higher rate (4.0%) than those without children (1.0%).
Families maintained by women have a much higher rate than average – 13.9% were among the working poor in 2019. The rate surges to 20.3% for these families when children under 18 are present. Without children, families maintained by women have a working poor rate that is very similar to the average (4.3%).
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, 6.0% of families maintained by men were among the working poor in 2019. Just like with other groups, rates are higher for families with children under 18; 9.0% of these families were among the working poor, while just 3.1% 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, 12.8% were among the working poor in 2019. High school graduates, on the other hand, had a working poor rate of 5.5%. The rate for those with some college but no degree was 4.6%. People with associate degrees had a working poor rate of 3.2%. Of those workers with bachelor’s or higher degrees, only 1.4% 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 1.4% for both men and women. Working poor rates were the highest for workers with less than a high school diploma, where 14.0% of women and 12.1% of men were among the working poor. Rates differed the most between sexes among high school graduates and those with some college but no degree – for these workers, women’s working poor rate was 3 percentage points higher than for men.
In 2019, the share of U.S. workers in the labor force for 27 weeks or more that had income below the poverty threshold dropped to a historic low of 4.0%. A decade of job growth and an unemployment rate near record lows from 2017 through 2019 brought more of the workforce out of poverty than at any time since at least 1986. The effect of the pandemic on this measure remains to be seen. On the one hand, workers more likely to already experience poverty, like those in service jobs, young workers, and women, were heavily affected by pandemic-induced job losses and a slow return to work in 2020. On the other hand, the social safety net – both in economic stimulus cash and increased unemployment insurance benefits – may have supported these workers to an unanticipated and historic degree. The overall effect of this turbulent economy on poverty among the workforce is something to watch closely as we gather more information.