The Economic Consequences of Homelessness in The US

III. The Working Poor
The working poor are working people whose incomes fall below a given poverty line
due to lack of work hours and/or low wages. Largely because they are earning such low
wages, the working poor face numerous obstacles that make it difficult for many of them
to find and keep a job, save up money, and maintain a sense of self-worth.
The official working poverty rate in the US has remained relatively static over the past
four decades, but many social scientists argue that the official rate is set too low, and
that the proportion of workers facing significant financial hardship has instead increased
over the years. Changes in the economy, especially the shift from a manufacturingbased
to a service-based economy, have resulted in the polarization of the labor
market. This means that there are more jobs at the top and the bottom of the income
spectrum, but fewer jobs in the middle.
There are a wide range of anti-poverty policies that have been shown to improve the
situation of the working poor. Research suggests that increasing welfare state
generosity is the most effective way to reduce poverty and working poverty. Other tools
available to governments are increasing minimum wages across a nation, and
absorbing educational and health care costs for children of the working poor.
Page 49 of 289