Working Poverty in the Rural South

1. Working Poverty in the Rural South Bradford Mills, Brian Whitacre, and Christiana Hilmer Virginia Tech

2. Work Rates of Families in Poverty • Rural South • Around 36% in 1982 and 2002 Motivating Facts • Nationally • 1982: 28% of poor persons were in families that had adult members who worked on average 1,000 hours per year • 2002: 36%

3. What we do in the paper • Document changes in the characteristics of working poor families between 1982 and 2002 • For nation as a whole and the rural south • Identify factors associated with working family economic well-being

4. Definitions Average annual hours worked per year across all adult family members (age 18 to 65) exceeds 1,000 hours.

5. Characteristics of the Working Poor- Education of Family Heads Rural South Nation

6. Family Structure Rural South Nation

7. Race - Ethnicity Rural South Nation

8. Summary of Shifts in Characteristics • Education levels have generally increased but not as fast as in the nation as a whole • The share of two parent families has declined and the share of working poor of Hispanic origin has increased • In the rural south these same characteristics of working poor families have changed even more rapidly • Convergence of characteristics of working poor families in the rural south and the nation as a whole may reduce the need for region specific policies? • Increased Hispanic and immigrant populations pose new challenges for the delivery of food assistance and other social assistance programs

9. Distribution of working family well-being in 1982 and 2002 Bandwidth = 0.02

10. Distribution of working family well-being in the rural south (1982 and 2002) Bandwidth = 0.03

11. Education level specific distributions of economic well-being – no high school degree and high school degree Bandwidth = 0.013 Less than High School High School Diploma

12. Education level specific distributions of economic well-being – some college and college degree Bandwidth = 0.013 Some College College Plus

13. Education level specific distributions in the rural south – no high school degree and high school degree Bandwidth = 0.05 Less than High School High School Diploma

14. Impact of education level share changes on the distributions of economic well-being Bandwidth = 0.02

15. Impact of education level share changes on the distributions of economic well-being in the rural south Bandwidth = 0.03

16. Impact of rural south education levels on distribution of 2002 national economic well-being Bandwidth = 0.02

17. Conclusions and Policy Implications • Nationally and in the rural south the incidence of poor in working families remained unchanged 1982 to 2002. • But composition of the working poor changed • Share of families where the head has some education beyond high school increased • Share in single parent families increased and the share in two-parent families with children declined • Share in families headed by a Hispanic increased dramatically, as did the share headed by a person born outside of the U.S. • The characteristics of working poor families in the rural south and the nation had converged to become more similar • But lower education levels among working families in the rural south still appear to account for about one third of the gap in well-being.

18. Conclusions and Policy Implications • Erosion in economic well-being in families where the head has a high school degree or less appears to be the driving force in mitigating the impact of significant increase in general education levels. • This erosion appears to be less severe in the rural south, because the levels of economic well-being associated with a high school degree or less are initially lower in the rural south than the nation as a whole in 1982. • Thus, there also appears to be convergence in the relationships between economic well-being and educational assets in the rural south and the nation.

19. Conclusions and Policy Implications • Erosion of economic well-being in working families at high school and below calls into question the policy prescription of fostering human capital investments in a high school degree. • Families, particularly in the rural south, increasingly need a member with some college to substantially increase family income and reduce the risk of working poverty. • Community colleges are becoming an increasingly important component of efforts to improve the workforce skills of poor and near-poor working families.

20. Conclusions and Policy Implications • The increasing diversity of working poor families creates challenges for workforce enhancement programs • Hispanics, in particular, often have language and citizenship barriers that limit their entrance into skilled workforce positions. • Families headed by a Black also continue to show lower levels of economic well-being, ceteris paribus • Policies to increase earnings • Living wages • EITCs