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					Student Name
Mrs. McCarthy
Annotated Outline
May 18, 2009

                                       Working Poor
                                    Cycle of Suppression

I.     Agenda
       A. Introduction: Who are the Working Poor?
       B. Minimum Wage
       C. Equal Opportunity Commission (EEOC)
       D. Association of Community Organization for Reform Now (ACORN)
       E. Factors Restricting Advancements for the Working Poor
       F. Ineffectual Legislative Improvements
       G. Negative Externalities for Working Poor
       H. Case Studies: Domestic
       I. Case Studies: International
       J. Conclusion and Implications

II.    Introduction: Who are the “Working Poor”?
       A. People who do not earn enough to live reasonably
       B. People who work or look for work a minimum of 27 weeks in the labor force, but
           income is below official poverty level
       C. 2002: 34.6 million people (12.6%) of population at or under official poverty level;
           7.14 million (2.6%) considered working poor
       D. Working Poor-Type Jobs (list)
       E. Poverty Threshold
           i.     determined by family size not income; based on total family income and # of
                  family members
           ii.    Chart – Poverty Threshold by Regions in America
           iii.   2003: Income Poverty Threshold
                   Individuals:$9,393
                   Family of Two: $12,015
                   Family of Three: $14,680
                   Family of Four: $18,810
III.   Minimum Wage: lowest rate per hour a worker can legally be paid
       A. acts as a price floor
       B. Demand for low-wage workers is inelastic
       C. set by individual countries, many don’t have one (Bar Graph- Global Minimum
       D. $5.15 as of September 7, 1997; workers under 20 yrs old can be paid $4.25 for first
           90 days
           i.     $5.15 for 8 hours a day, 5 days a week, 27 weeks a year is only an annual
                  salary of $5,562 (under all poverty thresholds)
      E. Inflation and Minimum Wage
         i.      (Bar Graph - % of Wage increases over past 12 years)
         ii.     Minimum Wage has less buying power than earlier years
         iii.    Minimum Wage in real dollars peaked in 1960s
         iv.     Inflation-Adjusted Value of Current Minimum Wage = 24% lower than value
                 of Minimum Wage in 1979
      F. (Map –Min Wage Across America)
         i.      Clinton- state min wage can be above federal level
              a. 2004: 14 states with min wage > federal min wage
         ii.     lowest: $2.00 in Oklahoma
         iii.    highest: $7.35 in Washington
         iv.     BLS Current Population Survey, 2003: 1.6 million people receiving min wage
                 below federal min wage
      G. Positive Externalities of Minimum Wage (Benefit other than Working Poor)
         i.      Encourage attainment if human capital
         ii.     Stimulate Economic Growth
              a. increased purchasing power
              b. encourages capital investment and training
      H. Negative Externalities of Minimum Wage (Hurt Working Poor)
         i.      Limiting employment of low wage earnings
              a. raises employment barriers for those lacking experience and education
         ii.     Curbing Economic Growth by raising labor costs
         iii.    Increasing cost of goods and services by leveling off labor costs
         iv.     Discourage low-skill workers to attain human capital
      I. Labor Market Problems: Applies to Full Time Workers (35 + hrs/wk)
         i.      2000: 3.4 million (3.1%) of full time workers = working poor
         ii.      3 primary Labor Market Problems: low earnings, unemployment, and
                 involuntary part-time employment
              a. 2000: 85% of full time working poor had at least one of the problems
              b. 2000: 73% deal w/ low earnings (most common) or in conjunction w/ another
              c. 2000: 30% have unemployment or with another issue
              d. 2000: 3.6% have all 3 problems
              e. 2000: 15.3% did not have any of the issues
                 i.      Possible factors for them: short-term employment, voluntary part-time
                         work, or expensive family structure

IV.   Equal Employment Opportunity Commission (EEOC)
      A. Title VII of Civil Rights Act of 1964 (signed by LBJ)
      B. Equal Pay Act of 1963 (EPA) (signed by LBJ)
      C. Age Discrimination in Employment Act of 1967 (ADA) (signed by LBJ)
      D. Americans with Disabilities Act of 1990 (signed by G.H. Bush)
V.    Association of Community Organization for Reform Now (ACORN)
      A. Predatory Lending: lending practices that take advantage of vulnerable borrowers
         (poor, elderly, or unsophisticated) (working poor a major target)
         i.      24 states with anti-predatory lending laws
         ii.     Truth in Lending Act of 1994
      B. Living Wages: wage that enables the affordability of necessities
         i.      (Chart- Breakdown of Necessary Costs and Wages Needed to Meet)
         ii.     person works 40 hrs/wk w/o additional income
         iii.    should be able to afford housing, food, utilities, transport, health care, and
                 some recreation
         iv.     different by minimum wage: living wage not set by law, and typically higher
                 than minimum wage
         v.      Accusation Living Wage Hurts Working Poor: Increases Deadweight Loss =
                 Wage regulations make least skilled workers less employable
      C. Education
         i.      2000: high school dropout (12.9%) twice as likely as high school grad (5.4%)
                 to be in working poor; more education = less likely to be working poor
         ii.     2000: 2.5% of people w/ associate degrees = working poor
         iii.    2000: 1.4% of people w/ college graduate degrees = working poor

VI.   Factors Restricting Advancements for the Working Poor
      A. Negative Effects of Unions
         i.       Unions less prevalent as before
              a. End of WW2: membership 35% of workforce
              b. 2005: 13% of workforce
         ii.      Union self-corruptive: mob, self-dealing, oppress workforce as much as
         iii.     Weak Unions = wage of those earning more than minimum wage is lessened;
                  those earning less than minimum wage compete, and lose, for work at pay
                  above their experience
         iv.      Strong Unions = demand wage increases -> reluctance to hire union workers
              a. 2/3 of economists at top universities (poll: Journal of Economic
                  Perspectives): min wage increases unemployment of young and unskilled
              b. Workers consequently vote against organizing unions
      B. Global Competition & Immigration
         i.       intensified profit pressures -> companies lower wage to cut costs (less unions
                  to stop it)
         ii.      increased immigration, increases labor supply, causes downward effect on
              a. reduced average annual earnings of American males by $1,700 over previous
                  20 years
              b. Immigration: increased labor supply lowers wages
VII.    Ineffectual Legislative Improvements
        A. Clinton: Personal Responsibility and Work Opportunity Reconciliation Act of 1996
            i.      Intent
                 Return to work after a 2 year limit
                 Increase Child Care Funding to Aid Single Mothers
                     Health Care Coverage Guaranteed
                     Stiffer penalties for Breaches of Child Support
                 Employers receive: subsidies, tax breaks, & hiring incentives
            ii.     Results: varied
                 2000: welfare cases down (5.5% -1994, 2.1% - 2000)
                     Holding Jobs, but not full time & low wages ($6-$8= $10,000-$14,000
                     Single mothers: Hard paying for shelter, clothes, health care, and food
                 Less people in poverty, more in Working Poor
        B. George W. Bush: Economic Growth and Tax Relief Reconciliation Act of 2001
            i.      Intent: $600 billion in Tax Breaks, Lower Tax Brackets, Give Surplus Back to
                    the American People
            ii.     Result:
                       Decreased Social Spending (Housing, Job Training, Higher Education)
                               Necessary Staple for Working Poor, Already Underfunded
                               Working Poor on Waiting Lists to Receive Benefits
                               Loss of Services Cost Working Poor More Than the Amount
                                Saved from Tax Cuts
                       Tax Break for Poorest 20% of Workers (average annual income: $16,600)
                        = 2% of income
                       Tax Break for Richest 1% of Workers (average annual income: $1.1 mil)
                        = 7% of income)
                               Tax Breaks Favored the Rich
                                       Rich save more from the tax breaks ($148 billion) than
                                        government spends on government assistance programs
                                        ($55.18 billion)
                       Poor: 100% of income subject to Social Security; Rich: >2% income
                        subject to Social Security

VIII.   Negative Externalities for Working Poor
        A. Unaffordable Housing for Working Poor
           i.     (Pie Graph: Sale Prices of Home on the Rise)
           ii.    (Line Graph: Increased Average Selling Price of Homes by Year)
           iii.   1997: 3 million low income families spend ½ income on housing
           iv.    2001: 4.8 million low income families spend ½ income on housing
           v.     Past 12 years: home prices rose 30% faster than salaries for low income
           vi.    1998: 28 million Americans use 30%+ of salary to pay rent
           vii.   2000: 3.5 million homeless in a given year
           viii. 1997: 841,700 homeless children; 2000: 930,200 homeless children
               a. Increased Lack of Transportation to and from School (Sometimes Dangerous
                   Neighborhoods) (Factor of Unschooled Children)
          vi. 2001: child care and housing = 80% of a poor person’s income
       B. Unavailability of Workers Benefits for Working Poor
          i.        2005: 41 million + Americans w/o health insurance
          ii.      2005: 1/3 people in poverty have no health care
          iii.     ½ poor workers cannot take paid leave, not offered
               a. Most are working welfare recipients, or just off welfare
          iv.      2001: Decreased availability due to Bush Tax Cuts
               a. Decreased Job Training
       C. (Pie Graph: Origins of Working Poor Income)
           50%: Wages Earned
           25%: Welfare
           22: Social Security
           3%: Other
       D. (Pie Graph: Areas of Where Working Poor Income is Spent)
           50%: Housing
           30% Child Care
           20%: Food, Transportation, Bills, Health Care, Taxes

IX.    Case Studies: Domestic
       A. Wal-Mart
       B. Southwest Minimum Wage Increases
       C. Oklahoma Below Federal Minimum Wage

X.     Case Studies: International
       A. 2005 Riots in Paris, France
       B. England
       C. China

XI.    Conclusion and Implications
       A. Children of Working Poor become Working Poor
       B. Working Poor Become Discourage Workers
       C. Increased Homelessness & Poverty
       D. Increasing Cost of Child Care
       E. Increased Costs For Government to Aid Working Poor
       F. Widening Gap of the Rich and the Poor
       G. Need for Health Care Reform: over-dependent on Medicaid
       H. Money, Food Drives, and Food Aid Solve Symptoms of Working Poor, not the Root
          Causes (Political, Environmental, Social)
       I. Issue More Politicians Need to Address
       J. Need More Service Jobs That Cannot Be Outsourced
       K. Not Going to Fix Itself
       L. Discouraging Ideal of Self Advancement
       E. American Dream: Inexistent in 2005?

XII.   Works Cited (Must have a minimum of 5 ) Use proper formatting ( MLA) for citations

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