NCPA - National Center for Policy Analysis

Report Says Some Low-Income Workers Fall Behind

June 29, 2000

A new Conference Board report says that an American holding a full-time job in the late 1990s was still as likely to fall below the official poverty line as a similar worker in the 1980s -- and more likely to do so than a full-time worker in the 1970s.

But some economists object that the report is flawed because -- in using the official government definition of poverty -- it does not take into account the impact of the earned income tax credit on low-income workers, a program that was significantly expanded in the 1990s.

  • According to the report, 2.8 million Americans with full-time jobs -- those working at least 35 hours a week, 50 weeks a year -- were living below the poverty line in 1998.
  • So 2.9 percent of full-time workers in 1998 were poor -- compared to 2.5 percent in 1997.
  • The researchers found that the poverty rate for full-time workers stayed almost constant over the past 20 years -- with rates hovering between 2.4 percent and 3.1 percent in the 1980s.
  • In 1973, the poverty rate for full-time workers fell to 2 percent -- and after rising a bit during the mid-1970s oil crisis, fell again to 2.1 percent in 1978.

The percentage of nonmanagement workers holding manufacturing jobs fell from 30 percent in 1965 to 15 percent in 1998. At the same time, combined employment in the retail and service sectors -- the two sectors with the lowest average pay -- increased from 30 percent to 48 percent.

The poverty rate for nonwhite, full-time workers was 4.42 in 1998 -- compared with 2.90 for white workers, including Hispanics, the report found.

Source: Jacob M. Schlesinger, "Working Full Time Is No Longer Enough," Wall Street Journal, June 29, 2000.

 

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