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A profile of the working poor, 2016

In 2016, according to the U.S. Census Bureau, about 40.6 million people, or 12.7 percent of the nation’s population, lived below the 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, 7.6 million individuals were among the “working poor” in 2016, according to data from the Bureau of Labor Statistics; this measure was down from 2015. 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 poverty level. In 2016, the working-poor rate—the ratio of the working poor to all individuals in the labor force for at least 27 weeks—was 4.9 percent, down 0.7 percentage point from the previous year. (See table A, chart 1, and table 1.)

Highlights from the 2016 data

• Full-time workers continued to be much less likely to be among the working poor than were part-time workers. Among people in the labor force for 27 weeks or more, 3.1 percent of those usually employed full time were classified as working poor, compared with 12.2 percent of part-time workers (table 1).

• Women were more likely than men to be among the working poor. In addition, Blacks or African Americans and Hispanics or Latinos² continued to be about twice as likely as Whites and Asians to be among the working poor. (See table 2 and chart 2.)

• The likelihood of being classified as working poor diminishes as workers attain higher levels of education. Among those with less than a high school diploma, 13.7 percent of those who were in the labor force for at least 27 weeks were classified as working poor, compared with 1.4 percent of college graduates. (See table 3.)

• 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. (See table 4.)

• Among families with at least one member in the labor force for 27 weeks or more, those with children under 18 years old were about 5 times as likely as those without children to live in poverty. Families maintained by women were twice as likely as families maintained by men to be living below the poverty level. (See table 5.)

Table A. Poverty status of people and primary families in the labor force for 27 weeks or more, 2007–16

(numbers in thousands)

Characteristic	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016
Total in the labor force1	146,567	147,838	147,902	146,859	147,475	148,735	149,483	150,319	152,230	153,364
In poverty	7,521	8,883	10,391	10,512	10,382	10,612	10,450	9,487	8,560	7,572
Working-poor rate	5.1	6.0	7.0	7.2	7.0	7.1	7.0	6.3	5.6	4.9
Unrelated individuals	33,226	32,785	33,798	34,099	33,731	34,810	35,061	35,018	35,953	35,789
In poverty	2,558	3,275	3,947	3,947	3,621	3,851	4,141	3,395	3,137	2,792
Working-poor rate	7.7	10.0	11.7	11.6	10.7	11.1	11.8	9.7	8.7	7.8
Primary families2	65,158	65,907	65,467	64,931	66,225	66,541	66,462	66,732	67,193	67,628
In poverty	4,169	4,538	5,193	5,269	5,469	5,478	5,137	5,108	4,607	4,082
Working-poor rate	6.4	6.9	7.9	8.1	8.3	8.2	7.7	7.7	6.9	6.0
1 Includes individuals in families, not shown separately. 2 Primary families with at least one member in the labor force for more than half the year. 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 2016 for workers and their families. These data were collected in the 2017 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.) 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 2016, the number of women classified as working poor (4.1 million) was higher than that of men (3.4 million). The working-poor rate also continued to be higher for women, at 5.8 percent, than for men, at 4.2 percent, (table 2). The working-poor rates for both women and men were down from a year earlier.

Blacks and Hispanics were about twice as likely as Whites and Asians to be among the working poor. In 2016, the working-poor rates of Blacks and Hispanics were 8.7 percent and 8.5 percent, respectively, compared with 4.3 percent for Whites and 3.5 percent for Asians (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 4.9 percent and 3.9 percent, respectively. The rate for Black women was 10.5 percent, compared with 6.7 percent for Black men. The working-poor rate for Hispanic women was 9.6 percent, while that of Hispanic men stood at 7.8 percent. Among Asians, the rates for women and men were little different from each other: 4.0 percent and 3.1 percent, respectively (table 2 and chart 2).

Young workers are more likely to be below the poverty level 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. The working-poor rate of employed youths 20 to 24 years old was 8.7 percent in 2016, considerably higher than the rates for workers ages 35 to 44 (5.6 percent) and 55 to 64 (2.8 percent). Workers age 65 and older had a working-poor rate of 1.5 percent (table 2).

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 2016, those with less than a high school diploma had a working-poor rate (13.7 percent) nearly twice that of high school graduates with no college (6.9 percent). Workers with some college or an associate’s degree and those with a bachelor’s degree or higher had the lowest working-poor rates (5.1 percent and 1.4 percent, respectively). In 2016, at all levels of educational attainment, women were more likely than men to be among the working poor. Blacks and Hispanics with a bachelor’s degree or higher were about twice as likely as Whites and Asians with the same educational attainment to be among the working poor (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, at 1.6 percent in 2016. By contrast, individuals employed in service occupations, which typically do not require high levels of education and are characterized by relatively low earnings, were more likely to be among the working poor, at 10.7 percent. Individuals employed in service occupations, with 2.8 million working poor, accounted for 39 percent of all those classified as workers below the poverty level (7.1 million). Among those employed in natural resources, construction, and maintenance occupations, 5.7 percent were classified as working poor (table 4).

Families

In 2016, 4.1 million families were living below the poverty level despite having at least one member in the labor force for half the year or more. This figure is down from 4.6 million in 2015. Married-couple families with only one member in the labor force in 2016 were less likely to be living below the poverty level, at 7.7 percent, than were families maintained by men, at 11.6 percent, and maintained by women, at 21.5 percent (table 5).

Among families, those with children in the household were much more likely to live below the poverty level, (9.7 percent) than those without children (2.2 percent). Families maintained by women with children had a working-poor rate of 22.8 percent, more than double that of families maintained by men with children, at 11.2 percent. Both of these rates were higher than that for married-couple families with children (5.3 percent).

Unrelated individuals

The “unrelated individuals” category includes individuals who live by themselves or with others not related to them. Of the 35.8 million unrelated individuals who were in the labor force for 27 weeks or more, 2.8 million lived below the poverty level in 2016, down from 3.1 million a year earlier. The working-poor rate for unrelated individuals was 7.8 percent, a decrease of 0.9 percentage point from last year’s figure. (See table 6.)

Within the group of unrelated individuals, teenagers (those ages 16 to 19) continued to be the most likely to be among the working poor, at 38.2 percent, followed by those ages 20 to 24, at 15.6 percent, in 2016. Overall, the working-poor rate for men living alone or with nonrelatives was 6.8 percent, and the rate for women was 9.0 percent. The working-poor rates for unrelated individuals were higher for Blacks and Hispanics (11.4 percent and 10.8 percent, respectively) than for Whites (7.1 percent) and Asians (5.6 percent). (See table 7.)

Of the 2.8 million unrelated individuals considered to be among the working poor in 2016, 3 out of 5 lived with others. These individuals had a much higher working-poor rate, at 9.6 percent, than individuals who lived alone (6.1 percent). Many unrelated individuals living below the poverty level may live with others out of necessity. Conversely, many of those who live alone may 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

Even though people who usually work full time are less likely to live in poverty, there were still 3.4 million (or 2.9 percent) full-time wage and salary workers who were classified as working poor in 2016—down from 3.8 million 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: periods of unemployment, involuntary part-time employment, and low earnings. (See the technical notes for detailed definitions.)

In 2016, 81 percent of the working poor who usually work full time experienced at least one of the major labor market problems mentioned above. Low earnings continued to be the most common problem among workers experiencing only one labor market problem, at 77 percent, followed by unemployment (21 percent). Among workers experiencing multiple labor market problems, those who experienced unemployment and low earnings had the highest rate below poverty level, at 35.7 percent (table 8).

Some 659,000, or 19 percent, of the working poor who usually worked full time did not experience any of the three primary labor market problems in 2016. 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.