Report: 25% of families are struggling

The study looked at those earning less than $36,784 for a family of four.
CHICAGO TRIBUNE
CHICAGO -- One out of every four working American families earns wages so low they struggle to survive financially, according to a report due out today.
These 9.2 million families include 20 million children. Their breadwinners work an average of 1.2 jobs. Most are in their prime working years. And 72 percent were born in the United States.
The study, funded by the Annie E. Casey, Ford and Rockefeller foundations, paints a portrait of janitors, cooks, cashiers and health-care aides who barely make ends meet in a nation where good-paying jobs are out of reach for many.
"One emergency -- a broken down car, rent increase or serious illness -- can disrupt the families' precarious equilibrium and plunge them into financial chaos," the report states.
The nonpartisan report spotlights a growing disparity between low-wage earners and the educated skilled workers that U.S. businesses increasingly demand.
Its release comes in the final weeks of a heated presidential campaign in which issues concerning low-income families largely have taken a back seat to those of the middle-class and to worries about terrorism and the war in Iraq.
National concern
"What we haven't come to grips with is how large this number is" of working low-income families, said Brandon Roberts, co-author of "Working Hard, Falling Short."
"This is an issue of our national competitiveness. If these families are not poised to succeed, it should be a concern to all of us."
President Bush's campaign stresses tax incentives to encourage businesses to hire new workers, and Sen. John Kerry has called for an increase in the $5.15 hourly minimum wage to $7 by 2007.
The report looked at families earning less than twice the federal poverty level, or less than $36,784 for a family of four. The U.S. median income for a family of four is $62,732.
They include families like that of Chicago's Miriam Perez, 39, a day laborer who worked double shifts chopping vegetables or packing tomatoes to support her five children until that work dried up.
"Sometimes I don't sleep very much," said Perez, who earns the state mandated $5.50 hourly minimum wage. "When I can get [a double shift] I take it to get the overtime."
Proposed solutions
The national report calls for increasing the number of low-income working adults who complete education and training programs. More than one-third of working low-income families have a parent who didn't finish high school.
The report also calls for improving wages, benefits and supports for low-income working families and increasing the number of good jobs.
Yolanda Starling, 25, a single mother of three, earns $7.14 per hour working for food service company Sodexho as a cashier at Chicago's Museum of Science and Industry.
Her hours recently were cut to 27 per week, providing her with less than $1,000 per month.
Her monthly rent is $500, placing her squarely in the majority of working low-income families who spend more than one-third of their income on housing.
"I need better wages," Starling said. "Other than that it'd be a good job."
Her goal is to attend night classes at Kennedy-King College to become a licensed practical nurse. "I'm trying to start back before Christmas," she said.
Helping son through college
Perez, the day laborer, sets aside money from the combined $2,000 per month she and her 18-year-old son bring home to pay his tuition at Wilbur Wright College.
Ricardo Sanchez studied Monday morning in a computer lab at the nonprofit Goodwill Industries International Inc. after getting off his shift stocking shelves at a Jewel Food store, where he makes $7.70 per hour.
The 21-year-old Chicago native is studying to complete his high school equivalency, but he's also looking for a second job to support his pregnant wife and her two children. His wife works at a Lane Bryant store.
They recently ate rice and baloney sandwiches for dinner when they ran short of cash.
"I'm looking for anything; I just keep looking," Sanchez said.
The national report cites a challenging environment.
One in five jobs in the United States was in an occupation that paid a median hourly wage less than $8.84 in 2002 -- roughly the federal poverty threshold.
Declining value
Minimum-wage jobs have lost their ability to keep a family out of poverty since a high point in 1968. Then, annual earnings of a full-time minimum wage earner totaled 1.2 times the poverty threshold for a family of three, according to the report.
Last year, annual minimum wage earnings represented 74 percent of the poverty threshold.
Those at the bottom of the educational ladder are losing ground: Real wages for workers without high school degrees declined 19 percent over the last 30 years, while real wages increased 16 percent for those with college degrees.
"Two related warning signals are sounding loudly and urgently," the report states. "First, millions of American families are living on incomes that inadequately meet their basic needs.
"Second, our economic structure faces a major challenge: finding skilled and well-educated workers, without whom U.S. businesses will be hard-pressed to compete."