The Rise of the Working Poor

Thursday, 28 Feb 2013 07:42 AM

By Neal Asbury

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It’s time to have a conversation in this country about how we define jobs. Is any job a good job? Some would say yes, but I don’t think America should be staking its future on creating poor-paying jobs just to make the unemployment numbers look good.

There are currently 26 million unemployed or underemployed Americans. For them the Obama economy has been very painful and unforgiving.

According to a report in The Huffington Post, 43 percent of households in America —some 127.5 million people — are liquid-asset poor. If one of these households experiences a sudden loss of income, caused, for example, by a layoff or a medical emergency, it will fall below the poverty line within three months. People in these households simply don't have enough cash to make it for very long in a crisis.

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“If it means living at or below the poverty line, then 15 percent of Americans — some 46 million people — qualify. But if it means living with a decent income and hardly any savings — so that one piece of bad luck, one major financial blow, could land you in serious, lasting trouble — then it's a much larger number. In fact, it's almost half the country.”

The result is that household wealth is dropping. The Federal Reserve in 2010 reported that the median American family in 2010 had no more wealth than they did in the early 1990s, wiping away two decades of gains. With stocks too risky for many small investors and savings accounts paying little interest, building up a nest egg is a challenge even for those who can afford to sock away some of their money.

Things are much worse for people without college degrees, though. The real entry-level hourly wage for men who recently graduated from high school fell to $11.68 in 2012, from $15.64 in 1979, according to data from the Economic Policy Institute. And the percentage of those jobs that offer health insurance has plummeted to 22.8 percent, from 63.3 percent in 1979.

I read a recent story about a law firm that demands that even their file clerks have college degrees. Is that why they went to school for four years?

So what we are seeing in this country is the rise of the working poor — that is, despite having a job, they are at, or near the poverty line.

The working poor are defined by Pulitzer Prize winner David Shipler in his book “The Working Poor: Invisible in America.”

“They perform labor essential to America’s comfort. They are white and black, Latino and Asian — men and women in small towns and city slums trapped near the poverty line, where the margins are so tight that even minor setbacks can cause devastating chain reactions,” he writes.

The Obama administration would have us believe that the way to reduce the number of working poor is to raise the minimum wage. History has shown us that this not a viable solution.

What happens when the minimum wage rises? Small companies begin laying off workers. So fewer workers are receiving any benefit of the higher salaries.

The real solution is to let small companies — our job creators — run their companies without government interference. Let the market determine what a good hourly rate should be. Let the market provide affordable loans so companies can hire and buy products to run their businesses — creating more jobs. I’m talking about manufacturing jobs — jobs that pay good wages and add value to the economy.

Instead, we hear about “green” jobs and infrastructure jobs. It’s been five years and we haven’t seen any progress here. Obama’s green program has actually lost jobs, in addition to adding $90 billion to our debt.

Poll: High Gas Prices: Is it Obama's Fault? Vote Now

Then there are the fabled infrastructure jobs. Do we really have a pool of workers today ready to grab a shovel and pick and start building roads and repairing bridges? This isn’t the Hoover Dam we’re talking about.

How do we reverse the plight of the working poor? Start helping the nation’s entrepreneurs and small businesses succeed so they can create good-paying jobs. And get more workers into technical schools so they can learn the skills required in today’s technology and manufacturing sectors.

The United States of America shouldn’t have a labor pool that looks like a third-world country. We deserve better. Working families deserve better. Small businesses and entrepreneurs deserve better. We can do it. But it requires leadership. And in this case, we are leadership poor.

© 2014 Moneynews. All rights reserved.

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