In the United States, working families are not precluded from being poor. Although Americans annually work longer hours than people in most developed countries (figure 1), including Germany, Australia, Canada, and the UK, poverty rates are higher in the United States. In comparison to other developed countries, U.S. children are most likely to live in households where both parents work and least likely to live in households with no working adults (figure 2). Of households with children, 65% of children in the U.S reside with two working parents and only 8.8% live in a household with no working adults. Similarly, in Germany, 62.2% of children reside with two working parents and 9.2% reside with non-working parents. However, a significant discrepancy exists between the child poverty rates of these two countries; while the U.S. exhibits a child poverty rate of 20.9%, Germany’s child poverty rate is 7.4%, close to a third of that of the U.S. (figure 3).
Evidence suggests that the steep level of poverty among American children has less to do with parents not working a sufficient number of hours and more to do with the low wages associated with low-skill jobs. The incidence of low-paying jobs is higher in the U.S. than in most developed countries. For instance, of all dependent full-time workers, one-quarter of Americans earn incomes equivalent to less than two-thirds of the national median income (figure 4). The same is true for 19.94% of UK households and 18.37% of German households. The minimum wage is also lower in the United States than in most developed countries, with the exception of Japan (although Japan’s incidence of low-wage jobs is almost half of that of the U.S.) (figure 5).
Thus, in comparison to other developed countries, it is especially difficult for low-earner families to escape poverty in the United States. A one-earner family with 2 children making a wage at the bottom decile of earnings would need to work for 60 hours per week to exit poverty (figure 6). The same could be accomplished by working 35 hours per week in Canada or 17 hours per week in France. This may help explain why relative poverty in the United States is so high in comparison to other industrialized nations (figure 7).