Millions of working families are still being left out of the recovery

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Consumer spending is up. There were nearly three million jobs created in 2014, which was the best year for job growth in more than a decade. And in April of that year, the national unemployment rate—5.4 percent—was the lowest it's been since 2008. According to the numbers, this is the state of recovery six years out from the end of the Great Recession.

But a new report released Tuesday by the Annie E. Casey Foundation tells another story: with job growth concentrated in low-wage positions and a federal minimum wage effectively being held hostage at $7.25 an hour, millions of working families are still trapped in poverty no matter how many hours they work.

Here's why: At the current minimum wage, working full-time means earning just $15,080 annually. Surviving on a minimum wage salary as a single adult is hard, but managing it as a single parent supporting, say, three kids, is virtually impossible.


In 2013, the year the report focused on, the Department of Health and Human Services defined poverty for a family of four as living on $23,550 or less—nearly $9,000 more than a minimum wage salary.

But even this number grossly underestimates what families need to get by, according to the Economic Policy Institute's Family Budget Calculator. A single parent with three kids living in El Paso, Texas, for example, would need to earn $68,393 to live comfortably and cover the basic expenses like housing, food, transportation, healthcare, and childcare. In Spokane, Wash., that number is $72,050. In Chattanooga, Tenn., it's $63,592. In Rochester, New York, a single parent raising three kids needs to bring in $102,417.

Unemployment only compounds these problems. While the unemployment rate for white and Asian Americans was around 4.5 percent during the last three months of 2014, that number was 11 percent for black Americans, or 2.4 percentage points higher than before the last recession. For Latino Americans, unemployment was 6.7 percent.

The problem of poverty wages, unemployment, and underemployment has had devastating consequences for children. Looking at census data from 2008 to 2013, the report found that one in five children lived in poverty in 2013. And these burdens were disproportionately shouldered by families of color: black children were twice as likely to live in a high-poverty neighborhood (where the poverty rate is higher than 30 percent) than the national average, according to the report.


Push a little harder on the national averages and it becomes clear that millions of families, particularly working families of color, are being shut out of the recovery.

“Although we are several years past the end of the recession, millions of families still have not benefited from the economic recovery,” Patrick McCarthy, president and CEO of the Casey Foundation, said in a statement on the report. “While we’ve seen an increase in employment in recent years, many of these jobs are low-wage and cannot support even basic family expenses. Far too many families are still struggling to provide for the day-to-day needs of their children, notably for the 16 million kids who are living in poverty."


The report also ranked each of the 50 states by economic wellbeing, education, health, and, family and community to come up with an overall score of "child wellbeing." Minnesota ranked first, with New Hampshire and Massachusetts rounding out the top three. The three states that received the lowest ranking were Louisiana, New Mexico, and Mississippi.

Laura Speer, associate director for policy reform and advocacy at the Annie E. Casey Foundation, told Fusion that the state rankings told a "nuanced story" about the recovery, but that it was clear that it hadn't "lifted all boats."


"There are too many parents who are relying on the low-wage jobs that have been created since the recession," she explained. "Those jobs just aren't cutting it. Parents aren't able to make ends meet, [which is why] our recommendations in this report are mainly focused on the issues of economic wellbeing and policies that result in higher pay. That can mean minimum wage laws, living wage laws, paid sick leave, flexible scheduling."

These policies also happen to be receiving unprecedented national attention, particularly as Democratic presidential candidates like Hillary Clinton, Bernie Sanders, and  Martin O'Malley make them a focus of their campaigns.


They've even played a more central role in the Republican field, where virtually every candidate opposes raising the federal minimum wage and policies like paid leave: current focus on policies that support working families have forced candidates like Jeb Bush, Scott Walker, and Marco Rubio to explain why, exactly, they oppose raising the federal minimum wage.

And polling data reflects that, even if candidates are divided on the issue, a majority of the American public is on the same page: according to a poll released this year by the Associated Press, a majority of Americans support raising the minimum wage, implementing paid sick leave policies, and guaranteeing paid family leave for new parents—a trifecta of policies that could go a long way toward bridging gaps in the recovery.


"As far as economists are concerned, we're in recovery," Speer said. "But there are still millions of families whose boats did not get lifted. We can't just forget about them."

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