Helping Poor Working Parents Get Ahead

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Abstract

Low-wage adult workers have trouble getting and keeping higher-paying jobs.  Most lack the basic skills and education needed to move up, but certain kinds of assistance might give some the edge they need to break the pattern.  In this essay, Holzer and Martinson recommend competitive federal matching block grants that reward states for developing new advancement systems which are linked to state workforce development structures.  They would also require partnerships with employers and training providers, including community colleges.

Introduction

In the United States today, roughly 11 million low-income families have working parents. Few are young. Most work full time and struggle without such on-the-job benefits as health insurance and parental leave to support their children. And few move up to markedly better jobs.

We believe that many of these low-income workers and their families could benefit greatly from state-level advancement systems that provide more education and training, greater access to higher-paying jobs, and more robust financial incentives and supports. Below, we build on proposals recently developed by Holzer (2007) to help working poor adults, hard-to-employ adults, and the at-risk youth who likely will become one or the other. Throughout, though, we concentrate especially on the plight and needs of low-income working parents.

Low-Income Working Parents in the United States: What Is the Problem?

In recent years, relatively low-wage workers have faced mounting difficulties. Those with only high school diplomas or less education saw their earnings fall throughout much of the 1980s and 1990s, compared with those with more education. The numbers of workers congregated at the bottom have also risen in recent years as new waves of unskilled people—particularly single mothers and immigrants—have entered the job market and as low-paid jobs have formed faster than those in the middle of the wage distribution (Autor, Katz, and Kearney 2006). But millions of workers in two-parent families with native-born household heads, either white or minority, also number among the ranks of low-income working parents (Holzer 2007).

In a dynamic labor market, many earning little today might fare better tomorrow—if they develop more skills and work experience or land better jobs. Yet, prospects for upward mobility for prime-age workers who have never earned more than low wages are not good. Even in the tight labor markets of the late 1990s, several recent studies show (Anderson, Holzer, and Lane 2005; Connolly, Gottschalk, and Newman 2003), only small fractions of these workers enjoyed significant and lasting wage increases. Most simply lacked the basic skills and education needed to advance.

Table 1 tells the story. Perhaps most striking are the differences in educational attainment of parents at different income levels. Not surprisingly, those in poor or low-income families are much more likely to have dropped out of high school and much less likely to hold an associate’s or bachelor’s degree. Indeed, fully one-third of parents in poor families and over one-fifth of those at 100–200 percent of the poverty level lack a high school diploma or GED, compared with just 6 percent of those in oth er families. Over 70 percent of poor parents and over 60 percent of those with low incomes have no more than a high school diploma or GED. Only 30 percent of those with higher incomes lack these credentials. And over half of those above 200 percent of the poverty level have at least an associate’s degree—a skill indicator that only 12 percent of the poor and 18 percent of those at 100–200 percent of the poverty level possess.

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The nonpartisan Urban Institute publishes studies, reports, and books on timely topics worthy of public consideration. The views expressed are those of the authors and should not be attributed to the Urban Institute, its trustees, or its funders.

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