Low Wage America And The Working Poor


Low wage America and the working poor – US has one of the highest number of employees working in low wage jobs of high paying industrialized nations. 1 out of 4 Americans employed work in jobs that pay less than $10 per hour.

ow wage jobs have been a big part of the so-called recovery.  What they also signify is a more troublesome trend that continues to eat away at the middle class in this country.  I’ve noted that the per capita average income for Americans is $25,000 and many seem to be shocked when they hear how low this figure is.  A recent presentation only reinforces this figure by discussing the number of working Americans in low wage fields.  The problem with having such a large portion of our population in low wage work is that as the cost of living goes up many of these people have a harder time providing for necessities like food, education, and also healthcare.  Surprising or not, the nation has been seeing a massive divide between the working class and those at the top.  The low wage employment growth signifies a continuation of this trend.


Number of Americans in low wage jobs

An interesting chart below was presented by economist Tim Taylor.  The chart is illuminating:

low wage 2

Source:  Conversable Economist  

Taking a look at some of the industrialized nations with higher incomes in the world and the US has one of the largest numbers of those employed working in low wage fields.  It is helpful to define what low wage work is; low wage work is employment positions that pay less than $10 an hour.  It is an interesting trend that has continued for well over three decades.  A large portion of Americans are working in lower wage work (assuming they have work).  The $25,000 per capita average of income doesn’t seem so farfetched when one out of four employed Americans find their source of employment to be in the low wage segment of the economy.

An interesting observation is made by Tim Taylor:

“The issue here can be summed up with this question: If someone in the U.S. economy is a law-abiding citizen who works full-time for a period of years, can they earn a level of wages that let them afford a slice of middle-class standard of living? If you are earning $10/hour and working 2,000 hours per year, your annual earnings of $20,000 would put you below the poverty line of $22,891 for a single parent with three children.”

This fact also highlights the large silent numbers that we see with Americans on food stamps.  Some are part of the working poor.  Over 46,000,000 Americans are receiving some form of food assistance today:


Source:  Zero Hedge

You can see how quickly things went up from 25 million or so before the recession hit to 46 million today.  Is this really a recovery?  Not if we define a recovery as paving the road to amiddle class lifestyle for many Americans.  Much of this path has been paved over even in the last couple of decades.  The 2000s appeared on the surface to usher in prosperity for Americans but in reality, wages were stagnant and all the outward signs of spending came from diving deep into unsustainable levels of debt.  Now that we are dealing with the aftermath of deleveraging people are realizing a growing divide in our country that is becoming more prominent and hard to ignore.

Read the rest at My Budget 360