The Changing Face Of The Working Poor

The latest employment figures are out and they show gains in hiring. The Wall Street Journal's Sudeep Reddy joins host Michel Martin to talk about the report, and the millions of working Americans who still fall below the poverty line.

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MICHEL MARTIN, HOST:

This is TELL ME MORE from NPR News. I'm Michel Martin. Coming up, the National Day of Prayer was observed this week but that got us thinking about the growing number of Americans who say they don't pray to anybody or about anything. So we called a leader in the so-called humanist movement. That's our Faith Matters conversation and it's coming up in a few minutes.

But before we head into the spiritual realm, we want to get down - stay down to Earth and talk about jobs. The latest employment report is out and the news is good - 165,000 jobs were created last month and unemployment fell to 7.5 percent. But it turns out that that good news is not good enough news for the millions of people, because millions of people who do have jobs, it's not enough to keep them out of poverty.

In fact, about 10 million Americans are considered part of the so-called working poor. Economics reporter Sudeep Reddy has been writing about this for the Wall Street Journal and he's with us now. Welcome back. Thanks so much for joining us.

SUDEEP REDDY: Thanks, Michel.

MARTIN: We are going to get to that subject in a minute but I did want to talk a little bit about the latest jobs numbers. Does the new report suggest that the economy is finally back on the right track?

REDDY: It at least tells us that we're seeing a remarkably steady recovery. Overall, we've been adding jobs month after month after month. It's been somewhat choppy. You see some months when it looks like we might be heading in a bad direction. But overall, if you look past all that volatility, you see that we're adding jobs.

The problem is it's been in a very slow fashion. We're tiptoeing through the recovery when we really need to be taking large leaps. There are almost 12 million people out of work. More than four million of them have been out of work for six months or more. And it's going to take a lot more - a lot faster growth, a lot stronger job creation, to pull them into the labor market.

MARTIN: Is this a regional problem? I'm wondering why is - what is the tiptoeing about? Is this a regional issue? Is it geographic? Is it certain sectors?

REDDY: It certainly...

MARTIN: Why is it - I just happen to note that some cities still have unemployment well above 10 percent. Is this kind of an urban problem?

REDDY: Exactly. It's certainly different across the country. This kind of underscores the diversity of our economy. You have people in some states who are dealing with unemployment that's even above 20 percent. If you live in some of the southwestern border towns in California and Arizona, it's almost 25 percent in some of those places. That's very high unemployment to deal with. That's Depression-like levels.

If you're in Midland, Texas, if you're in North Dakota, unemployment is around three or four percent. They've seen a huge boom in oil production in recent years, and you can't really find a job if you're going to these places. It's very difficult to handle all of that work that's coming in those places. So it's a very mixed picture across the country. Overall, though, it shows that we're still moving slowly as a nation through the recovery.

MARTIN: So let's turn to the subject that brought you here today, the main subject that brought you here today. Your reporting suggests that a lot of what we think about poverty is wrong, and particularly the picture of the working poor is a lot more complicated than many people think. Talk to us a little bit about that.

REDDY: We often forget how much there - how many people are out there working, doing jobs, staying in the labor market, and still can't get by. Our definition of poverty for the nation - there are about 46 million people who are in poverty. It's an unconscionable for a nation this large and this rich. But there are 46 million people. About a quarter of them are working poor.

A little over 10 million people. And that means for an individual they're making less then $12,000 a year. For a family of four it's a little over $23,000 a year. That's not much to get by on. And what we're finding is that a lot of the recovery is helping people who have the highest levels of education, people who are the highest skilled.

It's not really helping people who are in the lowest paying jobs. And that's the difficulty here. And one of the things we're seeing is a lot of people who had better skills who lost their jobs in the recession, they're basically coming into some of these lower paying jobs because they're the first jobs available in many cases. And that's displacing people who might otherwise be taking some of those positions.

MARTIN: I take your point that a lot of the people who are really experiencing the harshest effects of this economy are people who don't have the most education and who are vulnerable. But one of your reports suggests that there are a substantial number of people in the working poor who do have education. In fact, a lot of education.

Could you talk about that? You had a story about a gentleman in Wisconsin. Could you talk about him?

REDDY: Exactly. I talked to a man in Wisconsin, in Milwaukee, who he had been a manufacturing worker and lost his job during a round of job cuts and started looking for work. He has two Master's degrees, actually, and had been a manager in a plant and just had so much difficulty finding work. After a couple of years, after severance was long gone, he decided he just had to do something and on a lark went and applied for a job cleaning schools as a janitor.

And so he got that job and he has stayed in that job while also looking for a manufacturing job. But once you basically downgrade into a position that for him is paying him about half as much as it was before, you end up on a new track and you become part of a different trajectory. And it's very difficult to break out of that. That's one of the lasting legacies of not only this recession but any recession here or around the world, is that people get placed into different categories that are very difficult to break out of. And it takes decades to actually recover the lost income.

MARTIN: We're talking with Wall Street Journal reporter Sudeep Reddy. We're talking about the latest job numbers. We're also talking about the so-called working poor - people who have jobs but still fall below the poverty line. You've also been telling us that there are a disproportionate number of women and people of color among the working poor. Why is that?

REDDY: That in part has to do with sometimes you've got women who are trying to juggle a lot more. They might be single mothers who are trying to maintain a family. You're jumping around in a lot of different jobs. What's remarkable about this figure - 10 million people in the working poor - is it's not all part-time jobs.

You would think if it's just people jumping between part-time jobs, that would be part of it, though that is certainly a huge problem across the economy. A lot of them are people who are working in full-time jobs and are just having a very difficult time rising out of that lowest wage level, the minimum wage or just above it. And that's what's so remarkable about it.

Obviously there are people of color, particularly black and Hispanic workers, who are also disproportionately part of the working poor. But as you mentioned earlier, there are a lot of people who do have high levels of education who are still stuck in some of these levels. If you look at just people making minimum wage, last year there were 300,000 people in the country who had college degrees who were working minimum wage jobs.

That's a lot of people to be stuck in a position like that.

MARTIN: Is it your sense - because I know that there are people who will hear this conversation and will say, particularly where women are concerned, that they are choosing these kinds of jobs because it offers more flexibility that allows them to manage their family responsibilities. I think some people might say, well, that's a matter of lifestyle choice. Does your reporting indicate whether that's true or not?

REDDY: Exactly. You see some of that and there are a number of people who will choose to take smaller schedules. They want to have that kind of flexibility so they can maybe supplement their family income a little bit. But there are a lot of people who are in jobs where they're sometimes working a couple of part-time jobs or both income earners in the household are working in very low wage paying jobs and that's not enough to deal with breaking out of the poverty level.

And the tragedy of this recession that's run on for so long - we're four years into the economic recovery - is that people who are in the areas where you're making the least money and you have the least opportunity to rise up, those are the people who are going to have to wait even longer to come out of this.

So even though we're sensing a recovery, we're seeing some steady job growth, the people who are getting jobs are often getting them in the service sector, in restaurants, in low wage jobs and you're not able to move up out of it. It almost takes the full robust recovery before you can get to that point and, by that point, the rest of the economic cycle might have caught up to the point where you run into trouble before long.

MARTIN: Well, Sudeep, finally, in the time that we have left, you spend a lot of time talking to policymakers, people on Capitol Hill and people in the administration. Is this on their radar? I mean, during the campaign season, you know, we hear a lot about unemployment. You know, we need more jobs and, of course, there was this in the later stages of the campaign, there was a lot of talk, you know, about whether this economy was productive enough. I mean, famously, Mitt Romney talking about the 47 sort of percent. But is this question of people who are still working, but not making enough to lift them out of poverty - is that part of what our national leaders talk about when they talk about the economy?

REDDY: It comes up a little. It certainly doesn't come up enough. We've seen over the last couple of months a discussion about the minimum wage. The Obama Administration is, of course, pushing to raise the minimum wage because of this problem, because there are people who are working full time and still can't make ends meet and there's no reason somebody working a full time job should be living in poverty in this country.

There's not enough discussion about how to bring people up out of poverty, how to actually give them skills, how to improve the education system so that you break through some of these barriers and that's the real problem. Most of the discussion is about how to increase overall economic growth and hopefully the benefits will trickle down to people who will eventually benefit from it, but it takes so long for that to happen. We haven't seen enough of a national push to deal with bringing people up so that they can advance on their own.

MARTIN: Well, what about outside of government? You know, often, you know, the ideas don't come from within government. They come from outside of government. They come from, you know, people who've thought about this, activists, people who look at a problem and say, this is the direction that we need to move in, and then kind of push that idea forward. Are there ideas being floated out there about how to address a question like this?

REDDY: There are ideas about how to improve the skills gap, how you can actually work from the educational system, whether it's at the high school level or the college level to guide people in the right direction so that they don't run into these kinds of problems.

There also is an effort. There are some companies, particularly big manufacturers, that are just trying to train their own workers and give them opportunities to come up, but those tend to be for people who are kind in - considered the middle class, people who might already be in a decent job and just need to move into something that will provide higher wages above that level.

We still don't have enough focus on bringing people who are in the working poor are figuring out how someone after high school, after college can really work their way up if they're starting at the bottom rung of the ladder.

MARTIN: Sudeep Reddy is an economics reporter for the Wall Street Journal. He joins us from time to time to talk about important issues in the economy and he was kind enough to join us once again in our Washington, D.C. studios.

Sudeep, thank you so much for speaking with us.

REDDY: Thank you, Michel.

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