18.3.4 Poverty in the United States

When people lose their jobs during a recession or in a changing job market, it takes longer to find a new one, if they can find one at all. If they do, it is often at a much lower wage or not full time. This can force people into poverty. In the United States, we tend to have what is called relative poverty, defined as being unable to live the lifestyle of the average person in your country. This must be contrasted with the absolute poverty that is frequently found in underdeveloped countries and defined as the inability, or near-inability, to afford basic necessities such as food (Byrns 2011).

We cannot even rely on unemployment statistics to provide a clear picture of total unemployment in the United States. First, unemployment statistics do not take into account underemployment, a state in which a person accepts a lower paying, lower status job than their education and experience qualifies them to perform. Second, unemployment statistics only count those:

1. who are actively looking for work
2. who have not earned income from a job in the past four weeks
3. who are ready, willing, and able to work

The unemployment statistics provided by the U.S. government are rarely accurate, because many of the unemployed become discouraged and stop looking for work. Not only that, but these statistics undercount the youngest and oldest workers, the chronically unemployed (e.g., homeless), and seasonal and migrant workers.

A certain amount of unemployment is a direct result of the relative inflexibility of the labor market, considered structural unemployment, which describes when there is a societal level of disjuncture between people seeking jobs and the available jobs. This mismatch can be geographic (they are hiring in one area, but most unemployed live somewhere else), technological (workers are replaced by machines, as in the auto industry), educational (a lack of specific knowledge or skills among the workforce) or can result from any sudden change in the types of jobs people are seeking versus the types of companies that are hiring.

Because of the high standard of living in the United States, many people are working at full-time jobs but are still poor by the standards of relative poverty. They are the working poor. The United States has a higher percentage of working poor than many other developed countries (Brady, Fullerton and Cross 2010). In terms of employment, the Bureau of Labor Statistics defines the working poor as those who have spent at least 27 weeks working or looking for work, and yet remain below the poverty line. Many of the facts about the working poor are as expected: Those who work only part time are more likely to be classified as working poor than those with full-time employment; higher levels of education lead to less likelihood of being among the working poor; and those with children under 18 are four times more likely than those without children to fall into this category. In 2009, the working poor included 10.4 million Americans, up almost 17 percent from 2008 (U.S. Bureau of Labor Statistics 2011).

Most developed countries protect their citizens from absolute poverty by providing different levels of social services such as unemployment insurance, welfare, food assistance, and so on. They may also provide job training and retraining so that people can reenter the job market. In the past, the elderly were particularly vulnerable to falling into poverty after they stopped working; however, pensions, retirement plans, and Social Security were designed to help prevent this. A major concern in the United States is the rising number of young people growing up in poverty. Growing up poor can cut off access to the education and services people need to move out of poverty and into stable employment. As we saw, more education was often a key to stability, and those raised in poverty are the ones least able to find well-paying work, perpetuating a cycle.

Another notion important to sociologists and citizens is the expense of being poor. In a practical sense, people with more money on hand, better credit, a more stable income, and reliable insurance can purchase items or services in different ways than people who lack those things. For example, someone with a higher income can pay bills more reliably, as well as have more credit extended to them through credit cards or loans. When it comes time for those people to purchase a car, for example, they can likely negotiate a lower monthly payment or less money down. In an even more simplistic situation, people with more spending money can buy groceries in bulk, spending far less per unit than those who must purchase smaller portions. The single greatest expense for most adults is housing; beyond its significant portion of a family's expenses, housing drives many other costs, such as transportation (how close does someone live to the places they need to go), childcare, and other areas. And people in poverty pay significantly more for their housing than others – sometimes 70-80 percent of their total income. Those with fewer resources are also more likely to rent rather than own, so they do not build credit in the same way, nor do they have the opportunity to sell the property later and utilize their equity (Nobles 2019).

The ways that governments, organizations, individuals, and society as a whole help the poor are matters of significant debate, informed by extensive study. Sociologists and other professionals contribute to these conversations and provide evidence of the impacts of these circumstances and interventions to change them. The decisions made on these issues have a profound effect on working in the United States.