27 million American workers hardly afford food and rent due to low wages
Majority of 27 million workers employed in retail trade, leisure and hospitality sectors
According to the research conducted by two American academics Jeffery Kucik
Assistant Professor of Political Science, University of Arizona and Don Leonard
Assistant Professor of Practice in City and Regional Planning, The Ohio State
University on the working poverty in America.
They believe that the economy runs better when people aren’t forced to
choose between paying rent, buying food or getting medicine. Yet too many are
compelled to do just that. The latest figures on However, for millions of
working Americans, being employed doesn’t guarantee a living income.
They estimate that at least 27 million American workers don’t
earn enough to hit that very low threshold of $30,000, based on the latest occupation
wage data from the Bureau of Labor Statistics, a government agency, from May
2020. We believe this is a conservative estimate and that the number of people
with jobs who earn less than what’s necessary to afford the necessities of life
is likely much higher.
Low-income occupations encompass a wide range of jobs, from bus drivers
to cleaners to administrative assistants. However, the majority of those 27
million workers are concentrated in two industries: retail trade and leisure
and hospitality.
These two industries are among America’s largest employers and
pay the lowest wages. For example, the median salary for cashiers was
$28,850 in early 2020, with 2.5 million of the nation’s 5 million cashiers
earning less than that. Or take retail sales. There, 75% of workers – about 1.8
million – were earning less than $27,080 a year.
It’s the same story for leisure and hospitality, the industry that took
the hardest hit from the COVID-19 pandemic, lost 6 million jobs in April
2020 as much of the US economy shut down. At the time, close to a million waiters and
waitresses were earning less than the median income of $23,740.
Of course, millions of those jobs have returned, and wages have been
surging this year, though slightly over the inflation. But that doesn’t change
the basic math that roughly 1 in 6 workers is making less than what’s necessary
for an adult with no kids to survive.
But this situation drastically understates the scope of the working poor
because the federal poverty line is unrealistically low – only
$12,880 for an individual. The official poverty line was created to
determine for Medicaid and other government benefits that support
low-income people, not to indicate how much a person needs to actually get by.
That’s why it’s hardly surprising that 40% of U.S. households reported in
2018 that they couldn’t afford to spent more than $400 in an emergency. To
us, these figures should cause policymakers to redefine who counts among the
“working poor.” A 2021 US Labour Bureau of Statistics estimated that in
2019 about 6.3 million workers earned less than the poverty rate.
But this situation drastically understates the scope of the working poor
because the federal poverty line is unrealistically low – only
$12,880 for an individual. The official poverty line was created to
determine for Medicaid and other government benefits that support
low-income people, not to indicate how much a person needs to actually get by.
Determining just how many workers struggle to make ends meet is a
complicated task. A worker’s minimum survival budget can vary considerably
based on where the person lives and how many people are in the family.
Take Rochester, New York. It has a cost of living that’s closest to the
national average across 509 U.S. metropolitan areas, according to the city
cost of living compiled by the research firm Advisor Smith.
A single person living in Rochester, New York, needs just under $30,000
to pay for the basic necessities of life, such as rent, food and medicine.
That's about the same as the national average across the U.S. But it can vary
considerably depending on family size. Here's a breakdown of what goes into it
and the costs for three households.
MIT’s wage calculator shows that a single adult living in
Rochester needs at least $30,000 a year to cover the cost of housing,
food, transportation and other basic needs.
The city with the lowest cost of living in US is Beckley, West Virginia.
Even there, a childless worker still needs to earn about $28,200 to make
essential ends meet. Again, the average American city has a cost of
living of around $30,000 a year for a single person.
Of course, costs add up quickly for households with more than one person.
Two adults in Rochester need over $48,000 a year, while a single parent with
one child needs more than $63,000. In San Francisco, a single parent would need
to earn $101,000 a year just to scrape by.
So that’s what it takes to survive in today’s America. About $30,000 a
year for a single person without dependents in the average city – a little less
in some cities, and much, much more for families and anyone who lives in a
major city like San Francisco or New York.
The government's definition of working poor refers to the federal poverty
line. But MIT's Living Wage Calculator suggests a family needs to earn double
or even triple that to afford the very basic necessities of life. The data
below are for various household sizes for Rochester, New York, which is about
the national average for cost of living. Annual incomes are based on average
wages and 2,080 hours of work a year.
Unfortunately, for many millions of hard-working Americans, the “better
and richer and fuller” life Adams wrote about remains just a dream.
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