Though most analysts agree that the crash on Wall Street has yet to be felt fully in the wider economy, a new report by the Working Poor Families Project finds that even before the financial crisis, millions of working families in New York and across the nation fell further behind in recent years.

The report, titled Still Working Hard, Still Falling Short, updates the Working Poor Families Project’s 2004 study, Working Hard, Falling Short. It notes that in 2006, the last year for which data are available, more than one in four working families in the Empire State (27 percent) were “low-income,” earning less than 200 percent of the federal poverty standard.

That rate matches the national average. Nationwide, the new report finds an increase of 350,000 low-income working families between 2002 and 2006, to more than 9.57 million. The actual number of 550,870 such families in New York, however, represented a slight decline from 2002, when data identified 551,553 low-income working families. But while there might be slightly fewer low-income working families than was the case a few years earlier, they face an even harder struggle to meet costs: the share of New York’s low-income working families paying more than one-third of their income on housing increased from 59 percent in 2002 to 69 percent in 2006.

Income inequality among working families is more pronounced in New York than anywhere else in the U.S. In 2006, the top fifth of the state’s working families earned 11.5 times as much as families in the bottom fifth; the national average is 9.2 times. The gap has widened significantly since 2002, when the top 20 percent of New York families made 9.9 times as much as families in the bottom 20 percent.

The aspirations of low-income working families for upward mobility depend in large part upon parents’ educational attainment and whether or not they have health insurance, a key safeguard against otherwise-calamitous medical costs in the event of a serious injury or illness. Unfortunately, in 58 percent of New York’s low-income working families, no parent has any post-secondary education—a virtual prerequisite for most jobs that pay family-supporting wages. The figure is the 12th-highest among the 50 states. The news is better on the question of health insurance; 25 percent of families making under twice the poverty standard have at least one parent without health insurance, the seventh-lowest percentage in the country. The actual number of such families in New York has dropped from 197,153 in 2002—34 percent of all low-income working families—to 153,991 in 2006, thanks in large part to generous state policies around providing coverage. (“Work,” by the way, is defined as a combined family work effort of 39 or more weeks in the last 12 months, or a combined work effort of 26 weeks and at least one currently unemployed parent looking for work in the previous four weeks.)

The new report also shows a persistent relationship between race/ethnicity and economic privation. In New York, nearly two in five low-income working families are minorities. Also, non-white working families are twice as likely to be low-income than white families.

“Still Working Hard, Still Falling Short” urges state governments to support low-income working families by embracing two policy priorities. The first is to support the efforts of adult workers to acquire new skills that bolster their earning power, through measures such as increased financial aid for part-time college students. The second is to help meet the basic household needs of working families, through actions such as mandating a minimum wage above the federal standard or enacting paid family and medical leave. With the worsening economy sure to depress state tax revenues, however, a larger federal role will be necessary in the near term. The authors call for a federal commitment to “honor and support the efforts of all working families,” focusing on the goals of increasing the number of working adults who enroll in and complete education and skill-development programs; improving wages, benefits and supports for low-income working families and increasing the number of good jobs; regular assessments of the challenges facing working families and how effectively government policies are addressing those challenges; and concentrating public attention on how to increase economic opportunities for working families.

The Working Poor Families Project is active in 24 states and the District of Columbia. In New York, the WPFP partners with the Center for an Urban Future, sister organization of City Limits, and the Albany-based Schuyler Center for Analysis and Advocacy. The two organizations have twice reported on low-income working families in New York, in 2004 with a study titled Between Hope and Hard Times, and two years later with an update brief, More Hard Times for New York’s Working Families.

– David Jason Fischer

David Jason Fischer is the project director for workforce development and social policy at the Center for an Urban Future.