Working hard, falling short

Nearly one-quarter of the estimated 46.5 million people living in poverty in the United States are members of the 'working poor” - breadwinners who, because of underemployment or sporadic employment, fail to earn enough money to raise their households out of poverty.

Our state's workers, widely known for their strong work ethic and spirit of self sufficiency, are not immune from this national problem.

That should concern all Iowans, regardless of income, as neighbors struggle to make ends meet and public assistance programs and private partners find themselves overwhelmed by need.

As Labor Day approaches, we must ask ourselves and our leaders: What can and should be done to help improve conditions and opportunities for Iowans who are working hard - or willing to work - but still are falling short?

Who are the working poor?

About 7 percent of all U.S. workers can be classified as working poor, defined as having spent at least 27 weeks in the labor force in the previous year, but earning less than federal poverty thresholds.

Those thresholds vary by household size. In 2013, the most recent figures available, the weighted average poverty threshold was $11,892 for a single person, $23,836 for a family of four. A person working 40 hours per week at minimum wage earns $15,080 per year - just under the poverty threshold for a two-person household.

Service industry workers are more likely to be among the working poor than people employed in any other major occupational group. In one study, researchers found 52 percent of the country's fast-food workers receive some level of government assistance.

The face of this population is disproportionately female and non-white. Families with children under the age of 18 are four times more likely than those without children to live in poverty. Young workers are generally more likely to be poor than are workers in older age groups, in part because earnings are lower, and the unemployment rate for young workers is higher.

Educational attainment matters: More than one-fifth of the country's working poor have earned less than a high school diploma.

Stagnant Wages

Iowa's economy has seen steady growth since the end of World War II. Initially, this trend benefited workers, according to the Iowa Policy Project's annual 'State of Working Iowa” report, the most recent and comprehensive study of Iowans' wages that we are aware of.

This data shows that wages have not only stalled for workers in the state, but they have done so over a period of time in which productivity and educational attainment of the workers has dramatically improved.

Beginning in roughly 1970, wage growth began to slow even as the economy grew. The time since has been marked by a disconnect between productivity growth, which has risen about 60 percent since 1979, and slow growth in the median wage, which increased less than 12 percent during that same time, based on IPP data.

It is largely due to this disconnect that some federal and state leaders have argued for increasing the minimum wage in hopes of giving the lowest-wage earners a boost.

While we are as reluctant as anyone to advocate changes that might curb job growth and economic activity, there is significant evidence that such fears, as regards the minimum wage, are overstated.

Regardless of the exact proposal, we urge state and federal lawmakers to bring the issue of minimum wage for thorough examination and debate.

Workforce training and support

Federal and state programs already exist to help bridge the skills gap between workers and higher-paying jobs. Close examination of these initiatives can help ensure they are working as intended in our rapidly changing employment landscape.

The federal Workforce Innovation and Opportunity Act, which takes effect next summer, should streamline outdated programs and target local needs for workforce training and development.

The Skilled Iowa Initiative, a state program that allows unemployed Iowans to maintain benefits while being mentored as an intern in a new field, could be expanded or refitted to allow low-wage earners eager to increase their skills in order to qualify for higher-paying work.

It's important for lawmakers to review the data to ensure that mature programs, such as Skilled Iowa Initiative, and new ones - including those authorized under the Iowa Apprenticeship and Job Training Act and Home Base Iowa Act - are assisting workers, as intended.

Single Parents

Since single parents make up such significant numbers of the working poor, it makes sense for state leaders, community organizations and local advocates to frankly discuss and find ways to help address their specific needs.

The state could, for instance, offer sliding-scale child care and other supports that would incentivize work by allowing breadwinners to earn more without suffering a net loss in income because of programmatic 'fiscal cliffs”.

Community groups could expand after-school mentoring programs for young latchkey kids. Businesses that employ single parents could support those workers by offering more steady, daytime shifts, flexible work schedules and job sharing initiatives, regardless of what state and federal government requires.

Creating better incentives for providing child support and improving employment prospects for non-resident parents can contribute significantly to the household income of single-parent, low-income families.

The possibilities are many; a single solution is unlikely. There is no magic bullet that will slay this persistent problem. But many, too, are the tangible benefits for our communities when more low-wage workers are able to support themselves and their families.

' Comments: (319) 398-8292 or editorial@thegazette.com.