Why children in working poor families matter
One of the major goals of the 1996 welfare reform law, the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA), was to move more poor families with children into the labor force. Work can be an important step out of poverty, another important goal of welfare reform. Many low-income working parents and their children, however, remain poor even after meeting the work thresholds used in PRWORA (at least 20 hours per week for a single-parent family, and at least 35 hours per week for a two-parent family).
There is no generally accepted definition of “working poor,” even though the term is widely used in discussions of policy.
For purposes of this indicator, working poor families are defined as families whose income is below the federal poverty level (in 2014, $24,008 for a family of four with two children), and living in families with at least one full- or part-time worker. We also examine the full-time, year-round working poor, who had at least one family member who worked 50 weeks in the last year, for 35 or more hours on a regular week, as well as those who did so and were “low-income”–that is, they made less than two times the federal poverty level.
According to the U.S. Bureau of Labor Statistics, women, younger workers, and families with children are more likely to be among the working poor, while men, older workers, and families without children are less likely. Aside from low earnings, the other major factors that keep workers living below the poverty threshold are periods of unemployment and involuntary part-time employment.
Children in working poor families are substantially less likely to receive TANF (welfare) or Supplemental Nutrition Assistance (SNAP, formerly known as the Food Stamp Program) than poor children whose parents do not meet this work threshold. They are about equally likely to be covered by health insurance, a positive change from the mid-1990s, when they were less likely to be covered. Working poor families with children are also somewhat more likely to own their homes than are other poor families with children, though they lag far behind their non-poor counterparts on this measure.
A study using a somewhat different definition of “working poor” found that increased work effort was associated with better child outcomes. Between 1997 and 2004, the well-being of children in working poor families improved on 10 of 15 measures, whereas the well-being of children in non-working poor families improved on just five measures. In 2004, children in working poor families were faring better than children in non-working poor families across 12 of 17 well-being measures, even after accounting for other factors that may have distinguished these two groups.