Working Hard For Little Reward: Oregon's Working Families Today

April 1, 2001By Michael Leachman

To develop good public policy, Oregon's elected officials need an accurate picture of what is happening in the lives of their constituents. Yet, most policy makers have missed a fundamental development in the lives of Oregon families: families who work hard and play by the rules can no longer expect to get ahead.

The average working household in Oregon in the late 1990s was working 278 more hours per year than in the late 1970s. These additional hours spent at work have failed to compensate for the wage decline over the same period. Adjusted for inflation, Oregon's median hourly wage fell from $13.21 in 1979 to $10.99 in 1996, rebounding somewhat to $11.98 in 1999. In the midst of the economic expansion of the late 1990s, the median annual income of four-person families in Oregon was about the same as it had been twenty years earlier.

Poor families have been burdened heavily by the shift in Oregon's working family life since, contrary to myth, poor families work. In 1997-99, 84.2 percent of poor families with children in Oregon worked at some point during the year, up from 72.7 percent in 1991-93. On average, these families work nearly 39 weeks per year, even though some jobs, such as cannery and agricultural jobs, provide only seasonal wages. Just 8.5 percent of all poor families with children in Oregon received the majority of their income from public assistance in the late 1990s.

Hard work no longer guarantees families can meet their basic needs in Oregon or in the nation. There are plenty of lousy jobs out there today – jobs with paltry wages and no benefits – and these are the jobs held by Oregon's poor. Welfare reform ignored this reality. Poor people were told to get a job, any job, and they'd be better off. The result: despite a strong economy and minimum wage increases, the poverty rate among Oregon's working families with children rose from 10.4 percent in 1993-94 to 15.3 percent in 1997-98. Oregon's poor families with kids in 1998-99 earned an average annual income from work and cash assistance of just $8800, essentially the same income they were earning before welfare reform. And thanks to welfare reform, the next time a recession hits the poorest Oregonians will fall back towards a safety net that is incapable of catching them.

Welfare reform only exacerbated a trend that has been developing over the last generation. Although the poverty rate among working families with children increased dramatically following welfare reform, the rate has been increasing for twenty years and has doubled since the late 1970s.

The promise of success through work weakens as the quality of jobs declines. Oregonians are working more hours, spending less time with their families, and are frustrated that they still aren't getting ahead. This is the new reality that policy makers and the media do not fully understand. The “American dream” is fading for too many families. Will Oregon wake up in time to act?

Michael Leachman is a policy analyst at the Oregon Center for Public Policy.