In 1996, the United States reformed its welfare system, linking benefits more directly to paid work. Combined with the expansion of the Earned Income Tax Credit, which subsidizes low wage workers through the tax code, work has become a cornerstone of American anti-poverty policy. At the same time, rising income inequality and stagnant real wages among less-skilled workers mean that working one’s way out of poverty is more challenging than ever before.
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In 1996, the United States reformed its welfare system, linking benefits more directly to labor force participation. When combined with the expansion of the Earned Income Tax Credit, which subsidizes low wage workers through the tax code, work has become a cornerstone of American anti-poverty policy. At the same time, rising income inequality and stagnant real wages among less-skilled workers mean that working one’s way out of poverty is more challenging than ever before.
With these trends as a backdrop, a number of new questions are emerging. For example, how can government programs best address poverty if full-time work itself does not provide sufficient income to move many families out of poverty? Given the evolving consensus that poor mothers should be expected to work, how will women’s employment, family structure and poverty evolve in the 21st Century?
Our Research Affiliates are tackling these questions, as well analyzing trends in immigration and related demographic changes that have important implications for labor market opportunities available to the poor.
The connection between poverty and labor markets is complex. High, stable wages and stable full-time employment can keep many out of poverty. However, the stagnation of wages at the bottom of the US wage distribution over the past several decades and continuing low rates of full-time work, especially in single-parent households, work will often leave families below the official poverty threshold.
Millions of workers experienced increased variability in the regularity and predictability of their working hours in the Great Recession. This volatility brings negative consequences for their economic security and family lives, which can be as profound as job loss. The growth of work variability was facilitated by the decline of labor market institutions protecting workers from such volatility, particularly the profound decline of labor unions.
Much attention has been given to the large increase in safety net spending, particularly in Unemployment Insurance and Food Stamp spending, during the Great Recession. In this paper we examine the relationship between poverty, the social safety net, and business cycles historically and test whether there has been a significant change in this relationship during the Great Recession. We do so using an alternative measure of poverty that incorporates taxes and in-kind transfers.
These briefs are short and informative analyses of our research relating to poverty policies. Policy Briefs deliver our cutting-edge research directly to policy makers, researchers, and stakeholders in an accessible format.
During a job interview, workers cannot tell whether an employer is prejudiced. However, they can observe the race of a potential supervisor. In a new study of racial inequality in the labor market, we tested a model of Black and White workers’ wages and job stability using a unique dataset that includes the race of the worker’s supervisor and state-level measures of prejudice. Our findings suggest that higher levels of prejudice in the state may cause Black job applicants to accept lower wages in exchange for the security of working for a Black supervisor. This could lead to lower average wages for Black workers.
In recent years, for-profit colleges have seen sharp increases in enrollment despite public community colleges being much cheaper. In a recent study, we sent almost 9,000 fictitious resumes of young job applicants who recently completed their schooling to online job postings in seven major U.S. cities across six occupational categories to track employer callback rates. We find no evidence that employers prefer applicants with resumes listing a for-profit college relative to those whose resumes list either a public community college or no college at all.
Jobs that offer hours that vary from week to week present significant challenges for low-wage workers. In a new study we find that the number of workers with inconsistent work hours increased significantly throughout the Great Recession and recovery. These workers had lower incomes and higher poverty rates than those with steady hours. However, the increase in inconsistent hours was smaller among union members and in states with higher-than-average unionization. This suggests unionization could improve the chances a worker will have the steady income needed to plan for even short-term basic needs.
Center podcasts are a great way to keep up with today’s poverty research and public policy. We record most of our conference presentations and talks by our seminar speakers. We also produce exclusive content, such as our Poverty in Focus series, as well as expert discussions on research.
In this presentation, Jeffrey Clemens discusses his work on how the Great Recession affected employment and income for low-skilled workers. Clemens is an assistant professor in the Department of Economics at UC San Diego.
In this presentation, David Pedulla discusses his work on the stigma of low-wage work based experimental field and survey evidence. Pedulla is an Assistant Professor in the Department of Sociology and a Faculty Research Associate of the Population Research Center at the University of Texas at Austin.