Strategies for Improving Economic Mobility of Workers-A Conference Preview

By Toussaint-Comeau, Maude | Chicago Fed Letter, December 2007 | Go to article overview

Strategies for Improving Economic Mobility of Workers-A Conference Preview


Toussaint-Comeau, Maude, Chicago Fed Letter


On November 15-16, 2007, the Federal Reserve Bank of Chicago's Economic Research Department and Consumer and Community Affairs Division, along with the W. E. Upjohn Institute for Employment Research, will cosponsor a conference to present research on policies, practices, and initiatives affecting low-wage workers.

By almost all measures, American workers overall have gained economic ground over time. However, it has also been well documented that inequality in economic outcomes has increased: Wages for those in the bottom (10th percentile) of the income distribution have not growth as quickly as those in the top (90th percentile). In fact, the wages for those at the bottom may even be stagnating. These trends imply that the economic mobility of some segments of the labor force is relatively limited. How can the economic opportunities for low-wage workers be improved? And how effective are existing policies at helping low-wage workers gain more skills or improve them? In this Chicago Fed Letter, I provide a brief review of key issues related to low-wage earners and policy prescriptions, as a preview to our conference, Strategies for Improving Economic Mobility of Workers.

Trends in poverty, wages, and income mobility

The adverse consequences of substandard wages and poverty on individuals, families, and communities are numerous and interconnected. Families with low to moderate income generally have little in savings to deal with unanticipated events, such as the loss of a job or a serious health problem. They are less likely to have a bank account or become homeowners, and they have much lower than average household wealth.1 Children in poor families receive lowerquality child care and health care, and they are exposed to a less stimulating learning environment in the home.2

Living in a poor family increases the chances of living in a poor neighborhood. As research by the Brookings Institution suggests, nationwide about one in ten individuals below the poverty line in 2000 lived in communities with geographically "concentrated poverty," where at least 40% of the population is poor.3 Forty-six of the nation's 50 largest cities contained at least one such neighborhood. Many of these neighborhoods lack adequate housing, jobs, business and financial services, and transportation infrastructure. As a result, residents tend to face higher local prices for goods and services. Living in distressed neighborhoods also increases one's exposure to health hazards and violence. Given these trends, how can economic opportunities be improved for workers and households in poor communities?

Researchers have focused on three important empirical questions in studying low-wage workers. They measure the size of the low-wage labor market, identify the characteristics of low-wage earners, and gauge the extent to which they experience income growth. They have used several different approaches to define the "low-wage" labor market and to evaluate the material well-being of the poor.4 One approach defines a low-wage worker as one who works at least 37 weeks per year, but whose total family annual income falls below the federal poverty level (an annual threshold based on U.S. Census data)-$15,735 in 2005 for a family of three. Using this definition, figure 1 depicts the poverty rate among individuals aged 18-64 years old for each year since 1980. The figure shows that the percentage of individuals with income below the poverty line has remained relatively stable over time, hovering around 11% and 12%. More than half of those individuals work during the whole year, and over one-quarter work full time the whole year.

Another approach is to consider the relative position of workers in different quartiles of the income distribution. This approach is illustrated by figure 2, which shows the average real hourly wages of workers by quartile from 1979 through 2006. Real hourly wages for workers at the 10th percentile and below have remained stable-at about $7. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Note: primary sources have slightly different requirements for citation. Please see these guidelines for more information.

Cited article

Strategies for Improving Economic Mobility of Workers-A Conference Preview
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
Items saved from this article
  • Highlights & Notes
  • Citations
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Search by... Author
    Show... All Results Primary Sources Peer-reviewed

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.