Survey Finds Sharp Rise in Working Poor : Salaries: The number of full-time workers who earn less than a living wage rose from 12% to 18% in 13 years.
The percentage of gainfully employed Americans receiving poverty-level wages rose sharply over the last decade, with nearly one in five full-time employees now counted among the working poor, according to a study released Wednesday by the Commerce Department.
The study, titled “The Earnings Ladder,” shows that 18% of Americans with year-round full-time jobs had earnings of less than $13,091 in 1992. In 1979, only 12% of all full-time workers earned comparably low wages.
A worker trying to support a family on this wage would be living in poverty: the official definition of poverty in 1992 was a family of four earning $14,428 a year.
The report, by the Census Bureau, a division of the Commerce Department, paints a disturbing portrait of a U.S. labor market in which rising numbers of individuals are working full time but receiving very low wages. Especially for younger workers, and for those who didn’t go to college, the job market is a much more forbidding place than it was in the 1970s.
The forces behind the trend are well known. The nation is moving away from higher-paying manufacturing jobs in the auto, steel, chemical and other industries and toward lower-paying service jobs in everything from health care to retail stores to fast-food restaurants.
Even so, the extraordinary growth in the poorest paid employees as a proportion of the labor force is disconcerting, said Martin Regalia, chief economist for the U.S. Chamber of Commerce.
“It highlights the need for improved education and training skills,” Regalia said, referring to the issues raised by President Clinton at the recent jobs summit in Detroit. “Change happens all the time, but we are going through a particularly heavy dose now.”
At the higher end of the earnings scale, there was no net change over the 13 years--despite a massive wave of layoffs, buyouts and retirements that swept through the ranks of well-paid white collar workers and managers.
As those more highly paid jobs disappeared in some companies and industries, some other top-level jobs were produced in growing industries, the study indicated. As a result, the high-earners’ group comprised 10% of all full-time workers in 1979--the same portion as in 1992. This group was defined as those making at least four times the low-wage income, or at least $52,364 in 1992.
The expanding sectors included financial services, advertising and the legal profession, where pay scales are relatively good. However, those increases were dwarfed in absolute numbers by the rising number of low-paid jobs for janitors, clerks, hospital orderlies, retail salespeople and fast-food restaurant employees.
“It’s bad news for workers, and bad for the economy,” said Markley Roberts, assistant director of economic research for the AFL-CIO. “Who will be able to afford to buy what American industry turns out? How do you keep a society from getting more and more polarized when the people at the bottom are ending up with a smaller and smaller share of the total pie?”
The movement toward low-wage jobs has hit hard at the younger workers, said Jack McNeil, a Census Bureau analyst who prepared the study. Among workers 18 to 24, about 47% were earning low wages in 1992. Only 23% of that age group received a comparably low wage in 1979.
For workers between 25 and 34, the portion earning those wages or less rose from 9% in 1979 to 18% in 1992.
“The supply of good-paying jobs has declined,” said McNeil, referring to the elimination of high-wage factory work.
In addition, the growth in the labor force caused by the large scale entrance of women into the job market has generated more competition for jobs and has driven down some wage levels, he said. Less education makes a worker likelier to fall into the low-wage group, the report indicated. Among those without a high school diploma, 32% earned the lowest wages, compared with just 6% of those with a college degree.
Earnings and the Work Force
Percentage of all full-time workers
Wages 1979 1992 High earners ($52,364 or more in 1992 dollars) 10% 10% $39,273 to $52,363 27 23 $26,182 to $39,272 29 27 $16,364 to $26,181 28 27 $13,091 to $16,363 10 9 Under $13,091 12 18
Source: “The Earnings Ladder,” Census Bureau
