Working poor forming invisible work force - East Valley Tribune: Business

Working poor forming invisible work force

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Posted: Monday, July 12, 2004 6:13 am | Updated: 5:28 pm, Thu Oct 6, 2011.

MIAMI, Fla. - In August, John and Kelly Delgado moved their family to Homestead, Fla., from Indiana, thinking that John’s native South Florida was their land of opportunity.

They now regret the move.

‘‘We never have any money,’’ said Kelly, 32. ‘‘Every month, we’re robbing Peter to pay Paul and then figuring out how to do it again. It’s so expensive to live here. I can’t afford to buy uniforms for school. My son had a field trip; it cost $8. He used the birthday money, $12, my mom sent him. It’s been a very rough year.’’

The problem: John, 34, earns $6 an hour as a nursery laborer, while Kelly, a medical administrative assistant with two associate’s degrees, earns $8.50 an hour at a doctor’s office. It’s just not enough without food stamps, help from social service agencies and emergency cash from their parents.

The Delgados are part of a vast second-class economy of working poor people who cannot live on their salary alone.

‘‘These are people who are playing by all the rules of the game,’’ said Oren Wunderman, executive director of the nonprofit Family Resource Center of South Florida, which helped the Delgados find an apartment. ‘‘They’ve got jobs; they’re working. But they can’t make ends meet.’’

They’ve been dubbed the invisible work force. Because these people are working, they don’t qualify for many government benefits. But they don’t make enough — typically less than $10 an hour — to lift a family out of poverty.

And there will be more of them. Of the 20 occupations that the U.S. Labor Department expects will see the biggest growth between 2002 and 2012, 17 are considered low-wage jobs. Only three require college degrees.

In Florida, expanding industries such as retail and food service pay 15 percent less than contracting industries, such as manufacturing and information technology, reflecting a nationwide trend.

‘‘It’s not a lack of work ethic,’’ said Bruce Katz, vice president of the Brookings Institution, a Washington think tank. ‘‘It’s the structure of the economy that is creating jobs that don’t pay enough to make ends meet.’’

Treasury Secretary John Snow said the administration has implemented several policies that help low-income workers, including tax cuts and more training programs.

But liberal economists said the federal government is underestimating the problem because it doesn’t classify many low-wage workers as poor, due to unrealistically low poverty standards. The poverty rate rose from 11.7 percent in 2001 to 12.1 percent in 2002 — the latest statistic available.

For example, a family of four with an annual income of about $18,500 — an hourly wage of $8.89 — is poor, according to the federal government. In reality — according to the Economic Policy Institute, a Washington think tank — that family is extremely poor.

‘‘A good measure of poverty is twice the poverty line,’’ said Jared Bernstein, the institute’s senior economist. ‘‘A family of four with income below $30,000 in any city in this country is going to have trouble making ends meet.’’ A $30,000-a-year income requires an hourly salary of $14.42.

The working poor includes hotel maids, clerical workers, teacher’s aides and construction workers. They are not just unskilled labor, said Harriet Spivak, executive director of South Florida Workforce.

‘‘Many of these jobs require an associate’s degree or some training. They’re not lowskilled,’’ Spivak said.

But they typically don’t pay a wage sufficient to live on. About 24 percent of workers earn less than $9 an hour, the federal poverty line for a family of four, according to the Economic Policy Institute.

The growth in low-wage jobs essentially results from sweeping shifts in the U.S. economy — from manufacturing to services, from domestic to overseas production, from unionized to nonunion workers, from humans to automation. Add to that a highly competitive marketplace where low-overhead giants such as Wal-Mart drive costs down across the board.

And it looks as if things will worsen for low-wage earners because of other factors in the economy, economists and labor-market analysts say.

Although inflation has slowed in recent years to nearly negligible blips, the nation has undergone a housing boom that has brought skyrocketing rents and home prices. Solutions are far from easy. Social policy analysts said the government must devote more resources to the needs of the working poor — universal health care, more grants and loans for higher education, more slots for subsidized child care.

Some economists call for a bump in the $5.15-an-hour federal minimum wage, which hasn’t budged in seven years. That would boost incomes for 10 million low-rung workers, according to the Economic Policy Institute. Some employers are taking measures to help their low-wage work forces. Bank of America reimburses a portion of child care expenses to workers earning less than $34,000; Wachovia and Kraft Foods offer flexibility in schedules.

More will be needed if the United States wants to maintain its upward mobility and high living standards into the future, said Katz of the Brookings Institution.

‘‘We need to make work pay,’’ Katz said. ‘‘What is required is a new compact between firms, workers and government. I don’t think that most people would disagree that if you work, you shouldn’t be poor.’’

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