The perception of poverty in America is a grim one. A news anchor or journalist says the word “poverty,” and in a lot of people’s minds, it conjures up images of a homeless man at a bus stop or a beggar on the side of the street. The reality, however, is much less grim. The likelihood that you know someone who is classified as poor is high, due to a new class that is cropping up: the working poor in America. Who are the working poor? Well . . .
The Definition of Working Poor
You may have heard the phrase working poor before in the news, but never really understood what it meant. In layman’s terms, working poor can be defined as a person or household who works full-time, but still has trouble making ends meet for any number of reasons. These are families whose household income falls above federal poverty lines for their given household size, so they can’t receive any form of federal assistance. However, they still earn below the living wage for their area.
Further Reading: Get tips for dealing with financial hardship.
How to Calculate an Area’s Living Wage
A living wage is defined as income that is high enough to maintain a normal standard of living. In 2003, MIT created one of the best tools for determining the living wage for your geographic area. This tool has made calculating your hourly living wage easy, breaking it down in a chart by number of children and working adults in the household. It takes into account the cost of health care, housing, childcare, transportation, food, and miscellaneous expenses to determine a family’s realistic standard of living.
An area’s living wage plays a large part in determining if someone falls into the category of working poor.
Paired with the federal poverty guidelines, the living wage establishes a clear income range, and a metric with which to measure if someone is part of the working poor.
The Problem With the Definition of Poverty
As of 2018, the federal poverty line for a family of four is $25,100 in the United States. If your household income is above this, you probably won’t qualify for any federal assistance programs. There’s a glaring problem here, though: According to MIT’s calculator, the lowest living wage in a metropolitan area for a household of four (two working parents and two children) is in Chattanooga, Tennessee, where the living wage is $52,724 as of 2016.
If you make between $25,100 and $52,724 in the Chattanooga Metro Area, you’re part of the working poor. The highest living wage in the country is in our nation’s capital; a family of four in the Washington, D.C. metro area needs $84,503 to maintain a normal standard of living. That’s just over 60 percent higher than Chattanooga. This highlights a glaring problem in the system: Even if you make double the federal poverty standard and live in the cheapest metro area in the country, you still wouldn’t be a part of the “middle class” in our country.
Challenges for the Working Poor in America
Being a parent of a working-poor household presents another set of challenges: providing a post-secondary education for your kids. Be it community college, a technical school, or a traditional four-year university, all education after high school costs something. While it’s nice to assume that your kids would do well enough in school to receive academic scholarships to pay for their college, this isn’t the reality for nearly one-third of students in the country.
A family residing in the working poor class would likely not have the additional income needed to pay for college tuition or student loans for their children. This means that the burden of college expenses resides on the student. With college tuition skyrocketing nationwide, this is no easy task.
Further Reading: Drowning in student loans? Learn about refinancing options.
Caeleigh Whitworth’s Story
Caeleigh Whitworth is a junior at Murray State University (MSU) in Western Kentucky. She’s pursuing a Bachelor’s degree in Agriculture Business, and she knows this situation all too well. “My parents are on the line where they make too much for me to get any financial aid, but not enough to support all three of us [siblings] who are all in college,” Whitworth says.
She has to work three part-time jobs in order to cover tuition and living expenses, on top of being a full-time student.
“This past semester, I had to take time off of work because it affected my health, just going, going, going non-stop,” she says.
It’s also difficult to find a job in Murray that pays above minimum wage, which is $7.25 per hour in Kentucky. MSU had a student enrollment of just over 10,000 for the Fall 2017 semester. As such, students have quite the competition when it comes to both on- and off-campus jobs. Position postings paying even just a few dollars per hour above minimum wage command droves of applicants. When talking about her busy work and class schedules, Whitworth says that “you’ve gotta pay the bills, and I like to be able to financially support myself.”
Further Reading: “What Is Work-Study? Making the Most of Campus Jobs in College”
What Needs to Change for the Working Poor in America
Too many people work too hard to be unable to live comfortably in our great, prosperous nation. These working poor, the people who straddle the line between poverty and the middle class, are the backbone of our nation’s industry. And yet they live their lives worrying about their financial futures.
Our perception of poverty in this country needs to change. Poverty is no longer confined to the homeless or beggars on the street corner. It has now struck our nation’s hardest workers. Not only does the plight of the working poor affect current generations, but it may also affect future generations through the rising cost of college education and the increasing competition in the jobs market both at home and abroad. The problem does not have an easy solution, but it should be challenged and brought to light. This way, the working poor may one day see a light at the end of the tunnel.
The opinions expressed in this article are those of the author alone and do not necessarily reflect the official policy or views of CentSai Inc.