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A Profile of the Working Poor, 2014

In 2014, according to the U.S. Census Bureau, about 46.7 million people, or 14.8 percent of the nation’s population, lived below the official poverty level.¹ (See the technical notes section for examples of poverty levels.) Although the poor were primarily children and adults who had not participated in the labor force during the year, according to data from the Bureau of Labor Statistics, 9.5 million individuals were among the “working poor” in 2014; this measure was down from 2013. The working poor are people who spent at least 27 weeks in the labor force (that is, working or looking for work) but whose incomes still fell below the official poverty level. In 2014, the working-poor rate—the ratio of the working poor to all individuals in the labor force for at least 27 weeks—was 6.3 percent, down by 0.7 percentage point from the previous year’s figure. (See table A and 1 and chart 1.)

Following are additional highlights from the 2014 data:

• Full-time workers continued to be less likely to be among the working poor than part-time workers. Among people in the labor force for 27 weeks or more, 4.1 percent of those usually employed full time were classified as working poor, compared with 13.5 percent of part-time workers.
• Women were more likely than men to be among the working poor. In addition, Blacks and Hispanics continued to be more than twice as likely as Whites and Asians to be among the working poor.
• The likelihood of being classified as working poor diminishes as workers attain higher levels of education. Among people with less than a high school diploma, 18.3 percent of those who were in the labor force for at least 27 weeks were classified as working poor, compared with 2.0 percent of college graduates.
• Individuals who were employed in service occupations continued to be more likely to be among the working poor than those employed in other major occupational groups.
• Among families with at least one member in the labor force for 27 weeks or more, those families with children under 18 years old were more than 4 times as likely as those without children to live in poverty. Families maintained by women were more likely than families maintained by men to be living below the poverty level.

Table A. Poverty status of people and primary families in the labor force for 27 weeks or more, 2007–14
(Numbers in thousands)

Characteristic	2007	2008	2009	2010	2011	2012	2013	2014
Total in the labor force1	146,567	147,838	147,902	146,859	147,475	148,735	149,483	150,319
In poverty	7,521	8,883	10,391	10,512	10,382	10,612	10,450	9,487
Working poor rate	5.1	6.0	7.0	7.2	7.0	7.1	7.0	6.3
Unrelated individuals	33,226	32,785	33,798	34,099	33,731	34,810	35,061	35,018
In poverty	2,558	3,275	3,947	3,947	3,621	3,851	4,141	3,395
Working poor rate	7.7	10.0	11.7	11.6	10.7	11.1	11.8	9.7
Primary families2	65,158	65,907	65,467	64,931	66,225	66,541	66,462	66,732
In poverty	4,169	4,538	5,193	5,269	5,469	5,478	5,137	5,108
Working poor rate	6.4	6.9	7.9	8.1	8.3	8.2	7.7	7.7
1Includes individuals in families, not shown separately. 2Primary families with at least one member in the labor force for more than half the year. Note: Updated population controls are introduced annually with the release of January data. Source: U.S. Bureau of Labor Statistics, Current Population Survey (CPS), Annual Social and Economic Supplement (ASEC).

This report presents data on the relationship between labor force activity and poverty status in 2014 for workers and their families. These data were collected in the 2015 Annual Social and Economic Supplement to the Current Population Survey. (For a detailed description of the source of the data and an explanation of the concepts and definitions used in this report, see the technical notes at the end of this report.) The specific income thresholds used to determine people’s poverty status vary, depending on whether the individuals are living with family members or are living alone or with nonrelatives. For family members, the poverty threshold is determined by their family’s total income; for individuals not living in families, their personal income is used as the determinant.

Demographic characteristics

Among those who were in the labor force for 27 weeks or more in 2014, the number of women classified as working poor (5.1 million) was higher than that of men (4.4 million). Similarly, the working poor rate continued to be higher for women (7.2 percent) than for men (5.5 percent). The working poor rates for both women and men were down from a year earlier. (See table 2).

Blacks and Hispanics were more than twice as likely as Whites and Asians to be among the working poor. In 2014, the working-poor rates of Blacks and Hispanics were both 11.7 percent, compared with 5.5 percent for Whites and 4.3 percent for Asians. (See chart 2 and table 2.)

 

Among Whites, Blacks, and Hispanics, the working-poor rate was higher for women than for men. The rates for White women and men who spent at least 27 weeks in the labor force were 5.9 percent and 5.1 percent, respectively. The rate for Black women was 14.6 percent, compared with 8.4 percent for Black men. Hispanic women and men had rates of 12.6 percent and 11.1 percent, respectively. Among Asians, the rates for women and men were little different from each other.

Young workers are more likely to be poor than are workers in older age groups, in part because earnings are lower for young workers, and the unemployment rate for young workers is higher. Among youths who were in the labor force for 27 weeks or more, 10.4 percent of 16- to 19-year-olds and 12.1 percent of 20- to 24-year-olds were living in poverty in 2014, considerably higher than the rate for workers age 35 to 44 (6.7 percent). Workers age 45 to 54, 55 to 64, and those age 65 and older had lower working-poor rates—4.8 percent, 3.3 percent, and 2.0 percent, respectively—than did the younger age groups.

Educational attainment

Achieving higher levels of education reduces the incidence of living in poverty. Individuals who complete more years of education usually have greater access to higher paying jobs—such as management, professional, and related occupations—than those with fewer years of education. Of all the people in the labor force for 27 weeks or more in 2014, those with less than a high school diploma had a higher working-poor rate (18.3 percent) than did high school graduates with no college (8.3 percent). Workers with an associate’s degree and those with a bachelor’s degree or higher had the lowest working-poor rates (4.6 percent and 2.0 percent, respectively). In 2014, at nearly all levels of educational attainment, women were more likely than men to be among the working poor; by race and ethnicity, Blacks and Hispanics generally were more likely to be among the working poor than were Whites and Asians. (See table 3.)

Occupation

The likelihood of being among the working poor varies widely by occupation. Workers in occupations requiring higher education and characterized by relatively high earnings—such as management, professional, and related occupations—were least likely to be classified as working poor, 1.9 percent in 2014. By contrast, individuals employed in occupations that typically do not require high levels of education and are characterized by relatively low earnings were more likely to be among the working poor. For example, 12.8 percent of service workers who were in the labor force for at least 27 weeks were classified as working poor in 2014. Indeed, service occupations, with 3.2 million working poor, accounted for 37 percent of all those classified as working poor. Among those employed in natural resources, construction, and maintenance occupations, 7.9 percent of workers were classified as working poor. Within this occupation group, 16.8 percent of workers employed in farming, fishing, and forestry occupations were among the working poor. (See table 4.)

Families

In 2014, the number of families living below the poverty level (5.1 million), despite having at least one member in the labor force for half the year or more, was unchanged from last year’s figure. Among families with only one member in the labor force for at least 27 weeks in 2014, married-couple families had a lower likelihood of living below the poverty level (9.3 percent) than did families maintained by women (26.1 percent) or by men (15.2 percent). (See table 5.)

Among families with at least one member in the labor force for more than half the year, those with children in the household were much more likely to live below the poverty level than those without children. The proportion of families with children under age 18 that lived in poverty was 12.1 percent, compared with 2.7 percent for families without children. Among families with children under 18, the working-poor rate for those maintained by women (27.2 percent) was higher than that for those maintained by men (16.0 percent). Married-couple families with children under 18 had a working-poor rate of 6.8 percent in 2014.

Unrelated individuals

The “unrelated individuals” category includes individuals who live by themselves or with others not related to them. Of the 35.0 million unrelated individuals who were in the labor force for half the year or longer, 3.4 million lived below the poverty level in 2014, a decrease from last year’s figure. The working-poor rate for unrelated individuals was 9.7 percent, down from 11.8 percent a year earlier. (See table 6.)

Within the group of unrelated individuals, teenagers continued to be the most likely to be among the working poor. In 2014, the working-poor rate was 36.5 percent for teens who were in the labor force for 27 weeks or more and who lived on their own or with others not related to them. Overall, the rate for men living alone or with nonrelatives (8.7 percent) was lower than the rate for women (11.0 percent). The working-poor rates for unrelated individuals were 13.9 percent for Hispanics, 13.7 percent for Blacks, 9.0 percent for Whites, and 6.3 percent for Asians. (See table 7.)

Of the 3.4 million unrelated individuals considered to be among the working poor in 2014, about three-fifths lived with others. These individuals had a much higher working-poor rate than individuals who lived alone (12.3 percent and 7.3 percent, respectively). Many unrelated individuals living below the poverty level may live with others out of necessity. Conversely, many of those who live alone do so because they have sufficient income to support themselves. Unrelated individuals’ poverty status, however, is determined by each person’s resources. The pooling of resources and sharing of living expenses may permit some individuals in this category—who are technically classified as poor—to live at a higher standard than they would have if they lived alone.

Labor market problems

As noted earlier, people who usually work full time are less likely to live in poverty than are those who work part time, yet there remains a sizable group of full-time workers who live below the poverty threshold. Among those who participated in the labor force for 27 weeks or more and usually worked in full-time wage and salary jobs, 4.4 million, or 3.8 percent, were classified as working poor in 2014—little changed from a year earlier. (See table 8.)

There are three major labor market problems that can hinder a worker’s ability to earn an income above the poverty threshold: low earnings, periods of unemployment, and involuntary part-time employment. (See the technical notes for detailed definitions.)

In 2014, 82 percent of the working poor who usually worked full time experienced at least one of the major labor market problems. Low earnings continued to be the most common problem, with 67 percent subject to low earnings, either as the major problem or in combination with other labor market problems. About 32 percent experienced unemployment as the main labor market problem or in conjunction with other problems. Four percent of the working poor experience all three problems: low earnings, unemployment, and involuntary part-time employment.

Some 819,000, or 18 percent, of the working poor who usually worked full time did not experience any of the three primary labor market problems in 2014. Their classification as working poor may be explained by other factors, including short-term employment, some weeks of voluntary part-time work, or a family structure that increases the risk of poverty.