The Working Poor

Thesis Statement: Advising Canada on the people out there that are working poor and on the poverty that is happening around our country.

Introduction

In our society many people do not understand how people are in poverty. They do not understand what is meant by working poor, people believe as long as their working so how can they be poor. Statistics show that in 2001, there were 653, 300 working poor individuals in Canada, and 1.5 million that are living in a working poor family. The people who are working poor have many jobs but their wages aren't high enough to provide enough income to support their families adequately. Also people who worked in the labour force not only didn't earn enough, but they could only find seasonal jobs.

Distinguishing between low income and working poor

Low paid workers are individuals whose annual earnings are low while the working poor are individuals whose economic family income falls under a poverty threshold. To determine if an individual is low paid it depends not only on their income alone but also determines that the working poor is looks at all of everyone's income in that family. However if an individuals earnings are combined with that of another worker then the probability of being poor is greatly reduced. In 2001, 76% of low paid workers were not poor, and that many individuals who did not have low wages still ended up in poverty because their family income was not sufficient to provide for their domestic needs.

Who are the working poor?

As stated above in the introduction the 653, 300 working poor individuals in Canada which would consists of defining the working poor as individuals aged 18 to 64, who were not full-time students, who worked the equivalent of full-time for at least half of the year and who had a low family income in 2001.

In 2001 the working poor earned on average $12 per hour in paid employment, or 65% of the wages of other salaried workers. It is interesting that although the wages of the working poor were low, they were still well above the highest minimum wage available in Canada in 2001 ($8 per hour in British Columbia). This indicates that an increase in the minimum wage would have to be quite substantial, e.g. in the 75% to 100% range, to significantly reduce poverty among workers. An increase in the minimum wage would mostly benefit individuals that do not have low family incomes as the majority of low-paid workers are not poor.

In addition to having lower wages, the working poor work in jobs that typically do not offer the same level of benefits as for the non working poor. For instance, less than 25% of individuals living in a working poor family had access to a dental care plan or a health insurance plan, while this proportion was close to 75% among individuals living in non-poor families including at least one worker. Besides, the working poor were a lot more likely than other workers to be self-employed or to have an out of the ordinary work schedule. This indicates that for many of the working poor Ð''9 to 5' day care services were not the ideal solution.

Some workers are particularly likely to live in low income by good quality of the characteristics of their family. Workers who are the only wage earner in their family are more likely to have a low family income than other workers (this includes unattached individuals, lone parents and sole earners living in a couple). Despite the consequences of the number of earners in a married couple, the chance of being poor increases with the number of children they have. For instance, the likelihood for a Canadian worker to be poor was only 2% if that individual was part of a two-earner couple without children. This probability increased to 10% if this individual was the sole earner in his family and peaked at 26% if they had three children or more.

The high risk groups of the working poor

People in a region with a high poverty rate or being young proved to be good predictors of poverty. The high risk groups of the working poor are

Ð'§ Being 45 year old or more and unattached,

Ð'§ Being a recent immigrant,

Ð'§ Aboriginals living off-reserve,

Ð'§ A lone parent, or having work limitations

All of these groups were closely related to working poverty. In 2001, individuals in at least one of these five high risk groups made up for 41% of the working poor population. This indicates that even when they worked a substantial number of hours, high risk group members were more likely to experience low-income than individuals that were not part of these groups. But 60% of the working poor are not part of a high risk group.

40% of the working poor experienced persistent low income between 1996 and 2001, they managed to escape low income more often than low-income individuals who did not work. Nearly half of the working poor who left poverty did so because of a change in their family work or because of an increase in the earnings of another family member, not because of their progression in the labour market.

Are people working poor for life?

In Canada half of the percentages of working poor individuals get out of working poor within one year and the rest are out by about five years. This is due to an increase in there income or a change in the family. But of these people who are no longer working poor they still have a persistent low income compared to everyone else. From 1996 to 2001, $57,000 was the average annual family income of all individuals who did not have a low income. However, the income of workers who had previously lived in poverty was 40% lower ($34,600). getting married, and having a child enter the labour market or leave home are changes in an individual or family's situation that can elevate them out of poverty. Adjusting the minimum wage, expanding the eligibility of Employment Insurance, and reducing the proportion of temporary employment are changes in the labour market that can affect the proportion of individuals becoming part of the working poor population and increase the probability of those moving out of poverty.

The working poor are more likely to work in small private businesses, and in the service or sales industries. They are also more likely to hold non-standard jobs such as self-employment. Working poor women