As President Bush and conservative leaders were still touting the “soundness” of the economy in 2007, trends among the working poor were already beginning to tell a different story. After two years of declines in the number of people characterized as “poor” despite working at least 27 weeks a year, that number began to increase again in 2007, according to a Bureau of Labor Statistics report released this week.
In 2007, the number of people classified as working poor increased to 7.5 million people, or 5 percent of the total number of people in the labor force.
In fact, 3.6 percent of people who work full-time for more than half the year were nonetheless in the working poor category, defined in 2007 for a family of four as earning less than $21,203 or an individual earning less than $10,787.
The report is a snapshot taken just as the first increase in the minimum wage in 10 years, to $5.85 an hour from $5.15 an hour, had taken effect. Low wages were the key factor in seven out of every 10 working poor people. One can only imagine how worse those numbers would look if that minimum wage increase had not taken effect.
Or, for that matter, how much worse those numbers might look this time next year, when the BLS releases the 2008 numbers.
No doubt that report will resurrect the age-old right-wing argument that raising the minimum wage does more to kill jobs than it does to raise the living standards of people in low-wage jobs.
That argument will be an impossible one to sell, though, for at least two reasons. One, remember that we have been in an economy that after 2001 bred a record gap between the wealthy and the working class, with a massive, $400 billion shift in wealth from the bottom 95 percent of households to the top 5 percent, as middle-class incomes failed to grow in real terms. Second, as it is now evident, lower-income working families in 2007 were like canaries in the coal mine warning the rest of us that the so-called “sound economy” wasn’t sound at all and was about to fall apart calamitously. We should have paid closer attention.
What is particularly disturbing, but not at all surprising, is that the face of the working poor is disproportionately female and, especially, disproportionately African American and Hispanic. Women raising children are more than twice as likely to be among the working poor as their male counterparts. African Americans and Hispanics are
also twice as likely as whites to be among the working poor; three out of 10 working poor people are either African American or Hispanic.
We must hold to the principle that people who work full time must be able to earn enough to provide the basic necessities for themselves and their families. In July, the final stage of a three-step minimum-wage increase will take effect, raising the minimum to $7.25 an hour. This, too, is economic recovery, enabling workers to have enough in their paychecks to provide for themselves rather than lining up in shelters and food banks.
The fight that we must win is to come: a permanent law—such as indexing the federal minimum wage to inflation—that will ensure that the nation never again has to see an increase in the number of people who are working but still remain in poverty.