The Working Poor

Earlier this week, I rehashed the point that the poor are primarily people who reside in vulnerable populations: children, elderly, disabled, students, caretakers, and the involuntarily unemployed. I estimate that around 82.2% of the officially poor in 2013 fell into one or more of those categories for at least part of the year.

The Working Poor

Even though the story of poverty is mainly the story of vulnerable populations, people put a lot of attention on the working poor. So it is worth discussing them independently from the vulnerable populations point.

If we take the entire population of poor people and divide them into working and nonworking, you find that 24.4% of all poor people worked during the year.

Before we break down the working poor, let's take a look at the nonworking poor.

As you'd expect, the nonworking poor is overwhelming vulnerable populations that you don't really expect to work.

Turning back to the working poor, here they are broken down into those who were in the labor force for 50+ weeks and those who were not.

The vast majority of the working poor (68.9%) were in the labor force the entire work year. This means that they were either working or looking for work for 50+ weeks. The remaining 31.1% of the working poor were out of the labor force for some weeks during the year.

Here are the working poor who were in the labor force for the entire year broken down into those who held a job for all 50+ weeks and those who faced a spell of unemployment during the year.

More than one-third of the fully activated working poor faced one or more spells of involuntary unemployment during the year. On average, these people lost 28 weeks to unemployment. This is not surprising. In any given year, there are some people who get hit with long spells of unemployment and, naturally, those people will often find themselves in poverty that year as a result.

Turning back to the 31.1% of the working poor who were out of the labor force at some point during the year, here they are broken down according to their main reason for being out of the labor force.

It's largely students, followed by those exiting the labor force for some weeks to take care of family (e.g. new mothers). After that, there are discouraged workers (people who say there is no work but aren't doing enough search activity to qualify as unemployed) and those with temporary disabilities/illnesses. On average, these people were out of the labor force for 26 weeks of the year.

So, overall, around 3/4 poor people don't work, primarily because they are children, elderly, disabled, students, etc. For the 1/4th that do work, big chunks faced spells of involuntary unemployment or were out of the labor force for some weeks primarily because they were going to school or caring for others, but also in large part because they were discouraged or temporarily incapacitated. Thus, even the working poor is heavily stacked with those who managed to slip into a vulnerable circumstance that involuntarily limited their ability to work for significant chunks of the year.

Comments