More Children of Working Parents Now Live in Poverty

When Daryl Kloos of St. Paul, Minn., landed his latest job as a carpet cleaner earning $6.50 an hour, he and his family gained a measure of self-sufficiency.

Cash assistance from the state has ended. "Our dream is to make it on our own," says his wife, Madelyn. But even with continuing food stamps and Medicaid health-care coverage, the Klooses and their four young children remain below the federal poverty line, putting them in the burgeoning demographic group known as "working poor."

According to a study released yesterday by the Annie E. Casey Foundation, the proportion of all poor children with at least one parent who works year-round is rapidly growing. Between 1989 and 1994, that figure swelled by 30 percent. All told, 5.6 million children - more than a third of all poor children in America - live in working-poor families.

These figures, part of the Baltimore-based private foundation's seventh annual Kids Count data book, highlight a segment of America's poor that has been obscured by the politically charged debate on welfare reform. They also show that just because a family can graduate from public aid does not mean it can make it in today's high-priced society.

The Casey survey also reveals that, among working-poor children, only 14 percent were born to teen mothers; most were born to women over age 25. Half of children in working-poor families live in married, two-parent households.

"The study destroys some myths about the poor," says Bill O'Hare, survey coordinator. "One is that if you work, you're not poor. And second, if you're poor, you're not working."

Among all poor people, Mr. O'Hare adds, 45 percent have no income from public assistance.

He attributes the skyrocketing ranks of working-poor children to an accumulation of factors that have built up over 20 years. But the main culprit, he says, is "the deterioration of good jobs for low-skilled, lowly educated people." Another is the failure of the minimum wage to keep up with inflation. Though the economy was in recession for part of the 1989-'94 period, O'Hare says other economic indicators were positive then.

Raising the minimum wage 90 cents over two years to $5.25, as Congress is working to do, isn't a solution, says O'Hare. He says a family of three making one full-time minimum-wage salary today is living at 70 percent of the federal poverty level (which in 1994 was $11,821). A 90-cent minimum-wage hike would bring that family's income up to 87 percent of the poverty level.

Health insurance for children as well as more and better child care are "vital" to the well-being of children today, O'Hare contends. He and Madelyn Kloos also focus on the Earned Income Tax Credit (EITC), a tax rebate for working-poor families, as an essential tool for helping such families cope with poverty. Last year, her family got a $1,750 rebate, part of which went for a down-payment on a $60,000 house. The Klooses plan to use this year's rebate to buy woodworking tools and carpet-cleaning chemicals for home businesses they hope to start.

THE Republican-controlled Congress is seeking to pare back on the EITC - hoping to eliminate, for example, recipients without children - but the Klooses would still qualify.

Pat Fagan, a social-issues expert at the Heritage Foundation, also stresses the basics of work, marriage, and church in beating poverty - not incremental changes in a national welfare system that has failed. "It is very difficult to have good public policy that's helpful to the poor materially and that does not induce dependency," he says.

Mrs. Kloos says her family's devout Christian faith helped her husband beat chronic alcoholism: "Our pastor taught us many overcoming principles that we can apply to our financial situation."