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Number of Working Poor Climbs, So Does Income Inequality

The jobless rate is dropping and the economy has been adding jobs every month for nearly three years. But far too many of those are low-income jobs that don’t pay enough to meet a family’s basic needs, according to a new report that finds that working poor families in the United States now account for 32% of all working families, up from 28% in 2007, the year the recession began.  

The study, Low-Income Working Families; The Growing Economic Gap, from The Working Poor Families Project, finds that:

Although many people are returning to work, they are often taking jobs with lower wages and less job security, compared with the middle-class jobs they held before the economic downturn. These low-wage jobs typically offer limited opportunities for advancement, few (if any) benefits and create challenges for parents trying to balance work and family responsibilities.

It estimates the number of people in low-income working families now stands at 47.5 million, including 23.5 million children.

At the same time, as the number of working poor continues to climb, “inequality among working families is increasing, as higher-income families receive a larger share of income relative to families at the bottom of the income distribution.”

The report warns that upcoming decisions on investments in federal programs that help working families meet basic needs and support their efforts for economic advancement “are at risk of severe cuts.”

Both federal and state policymakers stress the need to strengthen the middle class, but cutting programs and benefits that serve low-income working parents and their children would undermine that goal. Furthermore, reducing public investments could worsen inequality, hinder economic mobility and increase the prospects of transmitting poverty from one generation to the next.

Read the full report.

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