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CenterPoints

July 2013

Working But Still Stuck in Poverty

by Jason Gettel

There are many statistics one can summon to show how the economy is failing working Oregonians. But few are more telling than the share of Oregonians who live in poverty despite the fact that they work.

If you work and play by the rules, you should be able to provide a decent standard of living for yourself and your kids. Working full time should at least enable you to cover the basics and leave a little extra to put into savings or for getting ahead.

Yet most Oregon families who live in poverty are working families. In 2011, about seven out of every 10 families with children in poverty had at least one parent who worked. And more than a fifth (22 percent) of all Oregon families living in poverty had at least one parent who worked full time.

Related materials:

Fact sheet: Working But Still Poor

In 2011, the share of children in poverty who lived in a family with at least one full-time worker increased. Put another way, in 2011, a poor child was more likely to have a parent who worked full time than the year before.

Single working moms have it worse than single working dads. In 2011, 33 percent of all single working mothers lived below the poverty line, compared to 20 percent of single working fathers. Among single parents working full time, 14 percent of single mothers lived in poverty, while just 5 percent of single fathers lived in poverty. What accounts for the fact that families can’t escape poverty despite the fact that they work? The straightforward reason is that many jobs don’t pay enough. If you’re a single parent with two children, a full-time, minimum wage job won’t pull your family above the poverty line.

And even if the family earned enough overtime to escape poverty, that wouldn't be enough to live a decent life. To provide a secure — yet still modest — standard of living for a family in Oregon, you need at least two-and-a-half times poverty-level income, according to a new “basic family budget” compiled by the Economic Policy Institute, a Washington, D.C.-based research organization.

The fact that families remained trapped in poverty despite their work effort is not just a tragedy for them, but also a serious problem for all Oregonians. Health researchers have found that children who grow up in poverty endure “toxic” levels of stress that harms their development, creating a barrier to academic and economic achievement. Poverty undermines their future and diminishes our potential as a state.

Making sure that work pays for more families requires concerted federal and state action.

A key step is to enact a robust jobs program that puts people back to work. A good example of work that needs to be done is repairing our neglected infrastructure. That would not only help the millions nationwide who can’t find a job, but it would also push up demand for workers — in turn, helping workers bargain for better wages.

At the state level, one priority is to strengthen the Oregon Earned Income Tax Credit, which allows low-income working families to keep more of what they earn to cover basic needs. Lawmakers, unfortunately, missed an opportunity in the recent legislative session to strengthen the credit. Hopefully, the legislature will take this key step when they meet again.

Second, Oregon lawmakers should better fund work supports for struggling families. For example, the Employment Related Day Care program, which subsidizes child care for low-income working families, is so poorly funded that eligible parents often must first be on a waiting list before getting the assistance they need to maintain employment.

And third, Oregon lawmakers should better fund job training programs, so that low-income and out-of-work Oregonians can gain skills needed to access better paying jobs.

While the sad reality right now is that too many Oregonians can’t escape poverty despite the fact that they work, it’s also the case that the right public policy choices can help make work pay for everyone.

 

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