One step forward, two steps back. (the working poor) William O'Hare; Joseph Schwartz.

            Abstract: There are 21% of working men earning poverty level wages because they do not have the skills to
            get well-paid jobs. A full-time, year-round worker must earn over $7.25 per hour to keep a family of four from
            the poverty level. There were 5.8 million children in working poor families in the US in 1996. These children
            begin their lives with disadvantages.

            Full Text: COPYRIGHT 1997 American Demographics Inc. As the U.S. economy barrels into a new century,
            new technologies are creating jobs and opportunities unheard of just a few years ago. Between 1989 and 1995,
            the nation saw steady gains in worker productivity (1 percent a year) and real GNP (up 9 percent), and the
            stock market continued its bullish growth.

            In spite of such positive indicators, though, this rapidly evolving economy is leaving behind a growing pool of
            people who don't have the skills to get good jobs in today's labor force. These people are working, but they
            remain below the poverty line. In turn, they are raising a growing share of American children who are starting
            out with lots of disadvantages, not the least of which is the notion that doing an honest day's work isn't enough.

            Among all U.S. children in poverty, 40 percent had at least one parent who worked all year. As a share of all
            American children, children living in working-poor families (that is, families with incomes below the poverty line
            despite substantial work effort by one or more parents) increased from 5 percent in 1974 to 8 percent in 1995,
            according to the Census Bureau.

            The causes of working-poor poverty are enormously complex and serve as catalysts for vigorous public-policy
            debate. However, there is widespread agreement that the lack of employable skills and continued economic
            globalization are both closely linked to the rise in working-poor families.

            "The whole way we do work has changed," observes John Challenger, executive vice president of Challenger,
            Gray & Christmas, a Chicago-based international outplacement firm. "Work requires more knowledge. The
            infusion of technology into the workplace is making for a much more educated work force that is much more
            comfortable with technology and one that is able to adapt to new technology."

            Moreover, the advent of free trade and deregulation is causing American companies to increasingly view the
            world as their playing field. "What distinguishes our work force is the skills that we bring to doing the job," says
            Challenger. "We see the jobs that require no skills as jobs that can go overseas."

            Working But Poor

            During the late 1960s, a person working full-time and year-round at minimum wage earned an income above
            the poverty line for a three-person family. By 1995, someone working full-time all year at minimum wage
            brought in an income 30 percent below the three-person poverty line.

            In order to lift a family of four out of poverty, a full-time, year-round worker now has to earn more than $7.25
            per hour, well above the minimum wage. The share of American men earning poverty-level wages rose from 13
            percent in 1973 to 21 percent in 1993.

            In 1996, the U.S. had 5.8 million children living in working-poor families. Families defined as "working poor"
            are those in which at least one parent worked 50 or more weeks during the year (or the family received
            child-support payments from a noncustodial parent), yet the family income was below the poverty line. About
            half of these parents work full-time--35 or more hours a week. In 1995, the poverty threshold for a family of
            four was $15,569.

            More than half (60 percent) of the increase in child poverty since the mid-1970s is accounted for by children
            living in families where one parent worked at least 50 weeks during the year. Only 10 percent of the increase is
            accounted for by families completely dependent on public assistance. In other words, the large increase in child
            poverty is more closely linked to the increased difficulty in finding a job that lifts a family out of poverty than to
            dependence on public assistance.

            Children in working-poor families defy stereotype. They live in every state. Half live with two parents. They are
            just as likely to be found in rural areas and suburbs as in inner cities. Most are white.

            Children in working-poor families face some special difficulties as a result of their parents' commitment to work.
            They are less likely to have health insurance than poor children whose parents don't work because they often
            don't receive Medicaid, yet many of their parents have jobs that don't offer health insurance. In 1996, 26
            percent of children in working-poor families lacked health insurance, compared with 18 percent of poor
            children in families with nonworking parents.

            Working-poor parents also face the challenge of finding affordable, adequate child care, just as all working
            parents do. However, paying for child care is a much greater economic challenge for the working poor: poor
            families who paid for preschool care for children in 1993 spent an average of 18 percent of household income
            on that care. Families above the poverty line averaged just 7 percent of their incomes on child care, according
            to the Census Bureau. "Among the factors that encourage low-income mothers to seek and keep jobs--factors
            such as more education, training, and transportation--affordable child care is a decisive one," according to the
            General Accounting Office. As federal welfare reform requires more welfare recipients to work, the demand for
            quality, low-cost child care will become more intense.

            Schooling Equals Dollars

            Educational attainment is becoming an increasingly important factor for economic success. Today, one in five
            jobs requires a four-year college education, according to the Bureau of Labor Statistics. That share is expected
            to creep up to 22 percent by 2005 due to continued growth of the economy's "college-intensive" sectors, such
            as health care, education, and computer-based industries.

            Of course, this means that about four in five jobs still don't require a college education. And increasingly, these
            jobs are not good ones. "There probably is a modest increase in the skill levels needed in most industries,"
            explains Dan Hecker, a labor economist in the Office of Employment Projections at the Bureau of Labor
            Statistics. "It is not a case of there not being jobs for people who have minimal job skills and education; there
            are lots of those kinds of jobs. But very, very few of those jobs come with pay that is much above the minimum
            wage."

            The result is that more and more Americans are working for less. Among all American men and women aged
            25 and older, 10 percent are living below the poverty level, according to the Census Bureau. The share living in
            poverty climbs to one in four people for those without a high school diploma. Just 3 percent of adults with a
            bachelor's degree or higher education have incomes below the poverty line.

            Work effort has little to do with income. "The main reason for the rise in the working poor is a decline in real
            earnings," says Rebecca Blank, professor of economics and director of the Joint Center for Poverty Research
            at Northwestern University. This loss of earnings is more striking among men than women and is highest among
            high-school dropouts, says Blank. Blank's findings echo federal statistics regarding the link between education
            and success in today's economy: "Men who are high school dropouts and full-time, year-round workers saw a
            20 percent decline in real weekly earnings from 1979 to 1995," Blank says. "For those with a high school
            degree, there was a 10 percent drop in real earnings during this period."

            Nearly four in ten parents in working-poor families (38 percent) do not have high school diplomas; another 35
            percent have a high school degree, but no college experience. Between 1973 and 1993, entry-level wages for
            males with a high school education dropped 30 percent; for women, they dropped 18 percent.

            "Since 1973, the economy has shifted from one that was relatively independent of international trends to a
            global economy where our fate is increasingly linked to that of other countries," says Douglas Massey, professor
            of sociology at the University of Pennsylvania. Massey divides the labor market into three classes of people
            who will benefit differentially from economic globalization. The first group includes the owners of capital, who
            always have done very well because capital is in scarce supply. The second group includes workers with the
            training and abilities that make this economy run.

            "The third group of people have only the power of their labor, and they will not do very well because there are
            billions of them," Massey says. "Workers find themselves competing on a global stage; they find it hard to
            maintain earning levels that are competitive." Consequently, uneducated workers increasingly compete for
            menial jobs that hold little value to employers. This is what the booming service economy has come to mean.
            Lots of jobs, little opportunity or money.

            Just as the lack of training and education hampers an adult's labor force prospects, poverty can hamper a child's
            success as well. Poverty is one of the most powerful predictors of the difficulties a child will face growing up
            and of the child's prospects for becoming a productively employed adult. Researchers at the Rand Corporation
            tried to assess to what extent achievement-test scores could be attributed to family background. "We found that
            seven characteristics are implicated in (test) scores," says senior researcher David Grissmer. Those
            characteristics are parental education levels, parental income, family size, age of mother at child's birth, mother's
            working status, racial/ethnic group, and whether the family consists of one or two parents.

            "Parental education is one of the strongest predictors of achievement, but all seven are important," Grissmer
            says. This suggests that the Horatio Alger rags-to-riches story is becoming more of a myth than ever--and that
            the children of working poor are likely to repeat their parents' economic struggles unless something intervenes to
            change the trajectory.

            Emphasis on Skills

            There may be a glimmer of light at the end of the tunnel for those without a college education. It might come in
            time for the children of the working poor, if not for their parents. Oddly enough, it picks up where the decline of
            the living wage was first felt, in the hard-core blue-collar sector.

            Some manufacturing jobs that remain are extremely well-paid, such as those in the automobile industry. But
            getting a job on an automobile assembly line is much tougher than it used to be. U.S. car companies recognize
            their global competition, and they are getting more and more selective about who they hire, whether it is an
            engineer or an assembly-line worker. This selectivity may be the key to salvaging the value of work in America.

            "We are no longer competing with other Americans, we are competing with the world," says Valerie Becker,
            national education programs administrator at Chrysler Corporation. "If we don't stay sharp, we will be in
            trouble. At Chrysler, we have greatly enhanced what we do to find good employees."

            Chrysler's selectivity is a reaction to today's global competition. "In order to have better quality and integrity
            with our products, we need better entry-level employees across the board," Becker says. "We are looking for
            different types of candidates in 1997 than we were in 1987."

            Chrysler is searching for potential assembly-line workers who have good communication and problem-solving
            skills. They don't have to have a college education, but they have to be responsible and independent. "On our
            line, if there is something happening that is going to take away from the quality of the product, the person has to
            take the initiative and say, Stop,'" says Becker.

            However, "responsible people with good basic skills are hard to find," says Becker of Chrysler. She says that
            high school has become the minimum requirement. Most Americans now graduate from high school, so that's
            not the problem. More telling, perhaps, than formal education are the aptitude tests Chrysler gives to job
            applicants, including one that measures team-building skills.

            Other employers are also raising the bar when it comes to the knowledge base they expect from even the
            youngest and least experienced workers. IBM now asks entry-level-job applicants to supply high school
            transcripts. It wants young people to understand that graduating isn't enough; they have to make the grade,
            literally.

            Even entry-level jobs at manufacturers like IBM and Chrysler pay well above the minimum wage. But their
            emphasis on skills and quality could be applied to other industries such as retail and services that also hire lots of
            noncollege-educated workers, often at minimum wage. It might seem easier to live with the poor quality and
            high turnover of an uninspired and untrained but easily replaced mass of minimum-wage workers. But it's
            probably more effective in the long run to provide training, responsibility, and more money to those who can
            handle it. Customers notice when a "mere" salesclerk or cashier takes the initiative to solve a problem instead of
            acting helpless, running for a manager, or refusing to help at all. They appreciate it, and they come back.

            A college degree may be the only way to virtually guarantee a life above the poverty line. But this doesn't mean
            that those who don't achieve such a high level of education are bound to lose out. Becker of Chrysler offers a
            challenge to tomorrow's work force, and to its employers. "We have to demand higher standards from kids."
            But before that can happen, the kids have to believe it matters.

            William O'Hare is senior associate at the Annie E. Casey Foundation in Baltimore, Maryland. Joseph Schwartz
            is a freelance writer in Danby, New York.

            Taking It Further

            The Census Bureau publishes annual tabulations of money income and poverty status of American households,
            families, and persons. For more information, call (301) 763-8576, or go to Internet site http://www.census.gov.
            The Annie E. Casey Foundation publishes a variety of papers, books, and other publications related to
            children's status in the U.S.; telephone (410) 223-2890. The Bureau of Labor Statistics publishes projections of
            the labor force by occupation, educational and training requirements, and other characteristics on a biennial
            basis; call (202) 606-5711, or see Internet site http://stats.bls.gov.
 
 
            Article A19759912