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Inter Press Service

No Golden Parachutes for the Working Poor

Adrianne Appel

BOSTON - High-rolling Wall Street executives have won pay bonanzas in recent years while the lives of millions of working poor families have gotten worse, a new study shows.

"The stark reality is too many working American families have been in crisis for many years," Brandon Roberts, director of the Working Poor Families Project, told reporters.

About 42 million working adults and their children are too poor to meet their basic needs of food and shelter, according to Roberts. Put another way, 70 percent of poor families work, and half are two-parent families, the study says.

"This comprises far more working families than is acknowledged by the government," said Roberts, a co-author of the report. The working poor often hold jobs like cashiers, cleaners, janitors, nursing home staff and restaurant workers.

The study defined a poor family as a family of four that earns less than 42,400 dollars per year in all states but Alaska and Hawaii, where wages and expenses are higher.

The federal government defines poverty as a family of four earning 21,000 dollars or less. The study used the higher level because at this income, families often struggle to keep food on the table and to pay rent. Health insurance is out of reach.

Nationally, more than one in five full-time jobs pays less than 21,000 dollars, Roberts said.

Mike Chavez, a spokesperson for SEIU West, a union of janitors and security workers, said workers he knows generally make about 10 dollars per hour if non-unionised.

"What this really means is multiple families living in the same house. They are unable to provide healthcare," Chavez told IPS.

"A lot of our members talk about struggles, about working multiple jobs, and a choice between paying rent or putting food on the table," Chavez said.

About 41 percent of working minority families are low income, compared to 20 percent of white families, the study found. One-third of U.S. children are in poor families in which parents work full time.

Between 2002 and 2006, an additional 350,000 working families slipped into poverty, mainly because of inflation, loss of good paying jobs and of social support programmes like housing and food assistance. If the U.S. remains in a recession, things will only deteriorate further for the working poor, especially if some assistance is not provided, the study warned.

The Centre on Budget Policies and Priorities, a Washington think tank, also found that the number of poor in the U.S. has increased recently, in its analysis of 2007 census data.

"This marks the first time on record that poverty and the incomes of typical working-age households have worsened despite six consecutive years of economic growth," the centre says.

"The new data show that in terms of poverty and median income, the economic expansion that started at the end of 2001 was the worst on record. The data provide fresh evidence that the gains from the expansion were quite uneven and flowed primarily to high-income households," the centre says.

"Corporate profits, by contrast, grew much more rapidly in the 2001-2007 expansion," the centre says.

In West Michigan's Ottawa County, many people have lost their good-paying jobs related to the automobile industry, which is shutting down and consolidating.

"Our homeless shelters in the area are at capacity," Tracy Garrett of Community Action House, a non-profit, told IPS.

"In the last six to eight months it's been especially bad. Families come into counseling and it's clear they can't avoid losing their home. We've seen a big increase in the people who come to our food pantry," she said. Overall, the request for services at her organisation has increased 35 percent this year over last, she said.

According to the Institute of Policy Studies, the rich have become richer and the poor poorer in recent years. The CEOs of large U.S. companies last year averaged 10.5 million dollars each in total compensation, 344 times the pay of the average U.S. worker.

The top 50 private equity and hedge fund managers pocketed an average of 588 million dollars each, or 19,000 times as much as average workers.

During the past three years, the ultra-wealthy, most of whom live in the U.S., invested 1.9 trillion dollars in hedge funds, according to Reuters, which recently hosted a meeting for advisors to the rich, in Boston.

The coalition of foundations and non-profits that make up the Working Families Project is calling for a national commission to come up with a plan for attacking poverty.

"If we had someone in a strong position of leadership we wouldn't need a commission," Roberts told IPS. "We know a lot of what we need to do to end poverty, it's to rally around and gain consensus to act," Roberts said. What's lacking is political will, he said.

The study used data only for the years 2002-2006. If the data included this year, "you'd find these numbers going through the roof in almost every state," Roberts said.

Low-income adults work more compared to the average U.S. worker, the equivalent of about 25 percent more hours, Roberts said. The percent of working poor varies greatly by state. In Mississippi and New Mexico 40 percent of workers are poor, the highest percentage among the states. In 13 additional states, 33 percent of workers are poor.

The degree of assistance states provide to struggling working families, Roberts said. The federal Medicaid programme provides money to the states to help families get healthcare. But states use their Medicaid funding in different ways and in many states, poor families go without basic health care. For example, Virginia only helps extremely poor families. Washington, D.C., right next door, is more generous.


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