Millions ‘underemployed,’ group claims
Mark Huffman | ConsumerAffairs.com
The nation’s unemployment rate dipped slightly in March to 8.8 percent, as the economy added more than 200,000 jobs during the month.
But despite the improvement, a new report says millions of Americans are struggling to make ends meet, and we’re talking about people who have jobs.
A group called Wider Opportunities for Women (WOW) has developed a formula that suggests the average single worker needs to earn $30,012 a year – nearly twice the federal minimum wage – to cover basic expenses. Single parents require nearly twice the income ($57,756) to support two children, while dual-income households with children require $67,920.
The poverty line
A family of four earning $22,050 a year is living below the federal poverty line. And many, in fact, are. Data from the U.S. Census bureau found 14.3 percent of Americans in that category in 2009.
“Too few American families are living in economically secure households, with most workers unable to stretch their incomes over basic expenses and savings,” said Joan Kuriansky, WOW’s Executive Director. “The American Dream of working hard to support your family is being re-written by the growth of low-paying industries and rising expenses.”
Inflation and deflation
In other words, the U.S. is struggling against both inflation and deflation at the same time. Prices of commodities like gasoline and food are rising rapidly. Salaries – at least those outside certain industries like financial services and health care – are going down.
WOW’s Basic Economic Security Tables for the United States report includes the comprehensive BEST Index that calculates the monthly income necessary for families to cover their basic expenses, including childcare, housing, health care, transportation, savings and retirement.
The report suggests things won’t change anytime soon. The report finds that jobs created in the coming years will not provide economic security wages to the majority of workers who do not have four-year college degrees.
From The New York Times: http://www.nytimes.com/2011/04/01/business/economy/01jobs.html?scp=3&sq=motoko%20rich&st=cse
Many Low-Wage Jobs Seen as Failing to Meet Basic Needs
By MOTOKO RICH
Published: March 31, 2011
Hard as it can be to land a job these days, getting one may not be nearly enough for basic economic security.
The Labor Department will release its monthly snapshot of the job market on Friday, and economists expect it to show that the nation’s employers added about 190,000 jobs in March. With an unemployment rate that has been stubbornly stuck near 9 percent, those workers could be considered lucky.
But many of the jobs being added in retail, hospitality and home health care, to name a few categories, are unlikely to pay enough for workers to cover the cost of fundamentals like housing, utilities, food, health care, transportation and, in the case of working parents, child care.
A separate report being released Friday tries to go beyond traditional measurements like the poverty line and minimum wage to show what people need to earn to achieve a basic standard of living.
The study, commissioned by Wider Opportunities for Women, a nonprofit group, builds on an analysis the group and some state and local partners have been conducting since 1995 on how much income it takes to meet basic needs without relying on public subsidies. The new study aims to set thresholds for economic stability rather than mere survival, and takes into account saving for retirement and emergencies.
“We wanted to recognize that there was a cumulative impact that would affect one’s lifelong economic security,” said Joan A. Kuriansky, executive director of Wider Opportunities, whose report is called “The Basic Economic Security Tables for the United States.” “And we’ve all seen how often we have emergencies that we are unprepared for,” she said, especially during the recession. Layoffs or other health crises “can definitely begin to draw us into poverty.”
According to the report, a single worker needs an income of $30,012 a year — or just above $14 an hour — to cover basic expenses and save for retirement and emergencies. That is close to three times the 2010 national poverty level of $10,830 for a single person, and nearly twice the federal minimum wage of $7.25 an hour.