Developing Opportunities for Low Wage Workers

Evelyn GanzglassCenter for Law and Social Policyeganzglass@clasp.orgwww.clasp.org

28 million low wage workersPoverty level for family of 4 = $18, 400 yr 9/hr in 2003

Nearly 1 in 4 workers 58% women 7% teenagers 58% white 24% > high school diploma 37% high school diploma 25% some college

Average wage: $7.09 50% workers earned>$14.15/hr (2004)

Minorities & women over-represented in low-wage labor market

31% of all African American workers are low income

40% of Latino workers 20% of White workers 30% of women workers, more

among minorities

Characteristics of low wage jobs

Decline in real wages (Families working 500 more hrs/yr than in the late ’70s to make ends meet)

Few, if any benefits (20% in bottom quintile have employer-provided health benefits)

No leave, paid or otherwise Irregular hours; just in time staffing;24/7 Intermittent employment Vulnerable to out-sourcing and technology Limited opportunities for career

advancement (loss of middle income jobs)

Workers stuck in low wage jobs

Probability of prime-age minimum wage worker advancing over 3 years (1992-2003)

37% staying in low-wage jobs 39% moving to better job Female: 41% staying; 33% moving up Foreign born: 47%; 29% Less than high school: 49%; 31% College grad: 20%; 62%Boushey, CEPR using SIPP panels

Industry and Occupation Matters

Job hopping in similar jobs doesn’t help, but

Moving out of (or never working in) industry with high concentration of low wage workers does

So does working in a union job and Working in a state with higher than

federal minimum wage (21 states,4 cities, 140 living wage initiatives)

Boushey, CEPR using SIPP panels

Education important, but not enough

Economy is producing 25-30% fewer good jobs than 25 years ago (CEPR)

Since mid 1970’s real median income hasn’t kept up with productivity growth (22%:80%) (EPI)

BLS 2002-2012: Of the 15 fastest growing occupations, 6 are in the lowest quintile; 3 in the highest

TANF Recipients Working Poor

More than 50% decline in caseloads Increase in employment of TANF

recipients: 71% worked at some point in 1st year after leaving welfare, but only 37% worked full year

In Wisconsin, most families remained poor 6 years post TANF; only 16% had earnings above fed poverty line; 60% were extremely poor (25% below federal poverty line)

WIA services to TANF and other low income populations are falling short

 

 

2000Intensive

2004Intensive

2000 Training

2004Training

Low-income 74.7 66.9 82.4 65.5%

Public Assistance Recipients 15.4 10.7 16.6 11%

Single Parents 25.9 18.8 34.5 24.2%

Limited English-language Proficiency 9.6 6.6 10.5 4.1%

No High School Diploma/GED 22.8 21.5 17.8 14.0%

Share of Disadvantaged Adults Served has Declined

WIA can help low income workers access better jobs by:

Increasing investments in initial and upgrade training

Targeting employer services to high road employers (reduce turnover, improve HR functions, front-line supervision)

Targeting job search/job job placement services on better jobs/employers

Using on-the-job training subsidies Partnering with TANF

Increase focus on job retention & advancement

Retention and advancement strategies show some promise

Income supplements increase employment, earnings, retention, education/ behavior of younger children

National Work Advancement and Support Center Demonstration (Dayton, San Diego, Bridgeport +2)

Support job retention & advancement by increasing access to work supports

Among working families with children with income below 200% of poverty in 2001*: 27% received food stamps 57% had a child or children receiving

Medicaid/SCHIP 27% had a parent receiving Medicaid 10% received child care assistance 38% received none of these benefits 84% were eligible for EITC

o 37 % of single mothers receive child support

*Source: Zedlewski, et. al, Is there a System Supporting Low-Income Working Families? (Urban Institute)

WIA can help improve job quality for low income workers through:

Sectoral strategies to strengthen industry competitiveness, improve job quality and build career pathways

Attaching job quality standards to economic and workforce development contracts/incentives for private industry to take the high road

Partnering with local economic development in disadvantaged communities (EZ/EC, CDFIs)