Work, poverty, and the working poor: a multifaceted problem, (EXCERPT), Monthly Labor Review Online, September 1986

Work, poverty, and the working poor:
a multifaceted problem

Sheldon Danziger and Peter Gottschalk

In 1984, the poverty rate for all households in the United States was slightly less than the rate for 1967 and at about the same as that in 1971.¹ About one-fourth of all heads of household whom we classified as "expected to work" had low weekly earnings. However, about 60 percent of these households escaped poverty.

This article describes changes from 1967 to 1984 in the economic status of households headed by persons who are expected to work. It compares the situations of households that are "poor" with those headed by "low earners." Excluded from the group expected to work are householders who are over age 65, the disabled, students, or women with a child under age 6.² Our results cast doubt on a common perception that most poor households are impoverished because their heads, though capable of doing so, do not work.³

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Footnotes

1 A household consists of a family or an unrelated individual. This differs from the Census Bureau's definition of a household which "consists of all persons who occupy a housing unit." characteristics of Households and Persons Receiving Selected Noncash Benefits: 1984, Series P-60, No. 150, p. 109. For example, if an unrelated individual resides in the same housing unit as a family of four, we would have two households and the Census would have one. Our definition is consistent with the assumption that the family and the unrelated person do not pool their incomes; the Census definition is consistent with income-pooling.

2 While child care responsibilities may complicate labor market opportunities for single-parent households with a child over 6, we nevertheless classify such persons as expected to work because this is consistent with existing welfare policies.

3 Throughout this paper, we use the official measure of poverty as defined by the Census Bureau. This measure is based on cash income and does not account for the receipt of in-kind benefits, such as medicare, medicaid, and food stamps. Inclusion of benefits would lower the extent of poverty in any year, but would not alter the trends in work effort and the incidence of low earnings discussed here.

Data for valuing in-kind benefits are available only for the years since 1979. All the data presented are based on computations by the authors from the computer tapes of the March 1968, 1972, 1980, and 1985 Current Population Surveys, conducted by the Bureau of the Census.

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