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Dang, Trong L. English 101 Ramirez, Nancy N. Research Paper

The Working Poor is a Reality

"It's time to honor and reward people who work hard and play by the rules....No one who works full time and has children should be poor anymore." (Clinton and Gore 1992) Indeed, those who work hard should be rewarded instead of being poor. Former President Bill Clinton, in support for an increase in federal minimum wage, firmly stated and believed that raising the minimum salary requirement would achieve the goal of reducing poverty. He also acknowledged the existence of the working poor in our society. In other words , he confirmed that having a job and getting paid do not necessarily equate not being poor. Barbara Ehrenreich's book, "Nickel and Dimed On (Not) Getting By in America", also reveals this undeniable reality of low-wage America in all its tenacity, anxiety and a thousand desperate stratagems for survival. Many characters in "Nickel and Dimed", having at least one job and working hard, are obviously poor. Even the author herself struggled to make ends meet while living in deplorable conditions. Minimum wages, set by the government, are clearly insufficient compared to living wages. Welfare and other assistance programs are not effective enough to help the borderline poor. Furthermore, workers often face the injustice of being exploited by their profit-driven employers. All of these factors seem to indicate that the existence of the working poor in the American society is inevitable.

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To many people, the undeniable existence of the working poor is debatable as they argue that the government has welfare state and assistance programs to insure against poverty, especially for the working class. It is true that there are many ways the government can help the poor. In "More Than Just Nickels and Dimes: A Cross-National Analysis of Working Poverty in Affluent Democracies ", Brady collaborated with Fullerton and Cross to study the dynamics of the working poverty across 18 nations. Before analyzing the collected data, they discussed how welfare state can benefit the poor : Welfare states reduce poverty because of two key mechanisms: risk management and organizing the distribution of economic resources... First, welfare states are collective insurance programs that protect against risks like single parenthood. Second... welfare states are involved in all aspects of the distribution of economic resources. Poverty is less common where people are protected against risks, and economic resources are distributed more evenly. (Brady, 563) Welfare programs help their beneficiaries by protecting them against risks and ensuring the even distribution of "economic resources"- money. There programs act as safety nets for those who fall short such as single parents and unemployed individuals. The damages of these risks are somewhat offset by welfare states. Additionally, welfare programs also help by directly giving money to those in need in order to help them. As the authors pointed out, the existence of these programs ensure that the poverty rate is a lot "less common" - lower than normal. However, welfare states only help in theory rather than in a practical way. After examining the data, the authors conclude that welfare generosity is actually an incentive for the poor to remain poor. It is counter-productive because the welfare recipients would simply reply on assistance from welfare

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programs rather than seeking employment. In other words, the benefits of welfare states are overestimated. In fact, the working poor do not benefit at all from such welfare programs. The reason that the working poor do not benefit from assistance programs is because they do not qualify at all. This group of people can be classified as the "borderline poor" while only the "poor" can receive help from welfare states. In " The Missing Class: Portraits of the Near Poor in America", Katherine Newman and Victor Tan Chen compiled and organized their research as a narrative to share personal stories of nine families. Chapter three is a heart-breaking story about Julia- a single parent - who struggles to pay off credit card debts. As told by Newman and Chen, Julia separates from her husband and "falls into considerable debt, barely making ends meet" but still, "the Earned Income Tax Credit (EITC) would then augment Julia's income, she may still remain ineligible for child care and/or housing supports that could facilitate her mobility efforts" (164). The authors give us a typical example of the working poor not being able to qualify for aids. Julia is undoubtedly poor but she is deemed "ineligible" because of her income. She is supposed to get benefits from the welfare program, in this case, EITC. We can see many flaws in the welfare system. It is solely based on the income of participant , thus, leaving out other important factors. One of which is debt. Julia's debt does not show in her Income Tax, making her seem well-earned on papers. Hence, her application for aids from the government is denied. Newman and Chen are trying to criticize the welfare systems with so many loopholes that the "near poor" falls through. Just like many other Americans, Julia works hard and has an income but she still struggles to make ends meet, receiving no help at all from assistance programs. This poses another question : why is her income insufficient ? Most of the working poor receive minimum wages which are significantly smaller than living wages. "Living wage" is a term used to describe the minimum hourly wage necessary for

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an individual to meet basic needs. This concept is different from "minimum wage" in the sense that the latter is set by law , which employers have to follow. More often than not, minimum wages fail to meet requirements of living wages. This is due to many different reasons, which were discussed in "A Measure of Fairness: The Economics of Living Wages and Minimum Wages in the United States" by Lars Osberg. In the conclusion of his work , Osberg summarized the reasons for disparities between living wages and minimum wages: "Although it is individual workers who get wages, most people live in families" and "The health, job availability, and household composition insecurities which dominate the lives of poor people are unmentioned" (315). The author brought up a valid argument that most low-wage workers have families which would make their living wages a lot of higher. Minimum wages fail to account for this factor. Besides, there are many other factors such as health conditions of the worker, whether or not he can get jobs and what type of members there are in his family. All of these factors increase the costs of living for a household, which are already far greater than what the minimum wages have to offer. However, the solution to this problem is not as simple as increasing the minimum wages. A minimum wage hike does not necessarily benefit the working poor. Instead, it might lead to adverse effects on poor workers. There are three parties involved in this matter : the Government which sets the minimum wage, the employers who pay the wages and the workers who receive them. An increase in minimum wages affect both the owners of businesses and their employees. Joseph Sabia and Richard Burkhauser published a journal, titled "Minimum Wages and Poverty: Will a $9.50 Federal Minimum Wage Really Help the Working Poor?" discussing the effects of a $2.25 increase in minimum wage. In the conclusion of their work, Sabia and Burkhauser found out that "many poor workers (48.9%) already earn hourly wages greater than

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$9.50 per hour, and the minimum wage increase is likely to cause adverse employment effects for the working poor" (610). From the statistics, we can see that almost half of the working poor already earn more than the proposed $9.50 an hour. This shows that the current minimum wage of $7.25 is too low and a $2.25 would still be insufficient. Not only is this increase not good enough, it can even cause negative effects on the poor workers. As stated in the journals , this increase would put more burden on the business owners to pay more out of their pockets. More unemployment or lesser working hours for the employees could occur as a result of that. The negative effects would outweigh the benefits of a higher minimum wage. In a nut shell, the working poor still exists even with a higher minimum wage. Furthermore, the employees are getting exploited by their bosses. Many poor people have jobs but their employers are paying too little - in other words, exploiting them. The American society is a capitalist machine that is fueled purely by profit. Business owners are willing to cut corners to earn more bucks, even to the extent of undermining the benefits of their workers. Barbara Ehrenreich put herself in the shoes of low-wage workers and experienced the injustices they had to put up with. In chapter two of her book " Nickel and Dimed On (Not) Getting By in America", Ehrenreich tells us about the unfair wages of a cleaning service called The Maids in Maine: "the pay compares so poorly to what an independent cleaner is likely to earn-up to $15 an hour... The company gets $25 and we get $6.65 for each hour we work" (72). It is clear that employees of The Maids are being exploited. They are being paid less than half of the income of an independent cleaner. Additionally, the company gets over two-thirds of what the customers pay. The wages are outrageously low for such a physically demanding job. Such low wages would only benefit the business owners as they pay out a lot less than their earnings. This is how profit-driven the American society is. Hypothetically, the

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employees would not have to struggle so much financially if the owners increased the wages and gained less for themselves. However, that is not possible because greed is a fundamental part of human beings. It is safe to assume that exploitation of employers is one reason why the working poor will always exist. It is sad that there are those who work hard and still remain poor. Those people are not lazy. They are working just as hard as any of us. They are just unfortunate to be stuck in the middle of nowhere. Their wages are not enough to cover the high costs of living for their families. They are constantly being exploited by their employers. The government's efforts to aid those poor workers are not effective. An increase in minimum wages are not viable and welfare programs do not benefit the "near poor" at all. In a nut shell, the existence of the working poor in the American society is inevitable. It is up to us to sympathize with their hardships and treat them with respect. The working poor are human beings, just like each and every one of us.

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Works Cited
Barbara Ehrenreich. Nickel and Dimed On (Not) Getting By in America. New York: Holt Paperbacks, 2002. Print. Katherine S. Newman and Victor Tan Chen. The Missing Class: Portraits of the Near Poor in America. Boston, MA: Beacon Press, 2007. Print. Brady, D., A. Fullerton, and J. Moren Cross. "More Than Just Nickels and Dimes: A CrossNational Analysis of Working Poverty in Affluent Democracies. " Social Problems

57.4 (2010): 559-585. ABI/INFORM Global, ProQuest. Web. 16 Dec. 2010. Osberg, L. "A Measure of Fairness: The Economics of Living Wages and Minimum Wages in the United States. " Labour 63 (2009): 315-317. ABI/INFORM Global, ProQuest. Web. 16 Dec. 2010. Robert Pollin. "ECONOMIC PROSPECTS: Making the Federal Minimum Wage a Living Wage. " New Labor Forum 16.2 (2007): 103-108. Alt-Press Watch (APW), ProQuest. Web. 16 Dec. 2010. Sabia, J., and R. Burkhauser. "Minimum Wages and Poverty: Will a $9.50 Federal Minimum Wage Really Help the Working Poor? " Southern Economic Journal 76.3 (2010): 592Global, ProQuest. Web. 16 Dec. 2010.

623. ABI/INFORM

Amy Goldstein. "Despite rough times, welfare rolls haven't grown much. " The Washington Post 3 Oct. 2010, ProQuest National Newspapers Core, ProQuest. Web. 16 Dec. 2010.