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date: 24 September 2018

Abstract and Keywords

This article examines the links between poverty and the U.S. labor market. The first part argues that the labor market continues to exert a strong influence on the poverty rate. There is a strong relation between prevailing wages and the poverty rate. The poverty rate closely tracks median earnings of adult men and is even more closely related to wages at lower percentiles in the wage distribution. The unemployment rate also has a modest effect on the poverty rate. The second part of the article examines some labor market policies to reduce poverty. It focuses on the earned-income tax credit, minimum-wage laws, and job-training programs. It reviews evaluations of the Workforce Investment Act, the Job Training Partnership Act, and Job Corps. Finally, it considers the debate over whether putting welfare recipients into work first or into training first is more effective.

Keywords: poverty rates, poverty measure, labor market policies, wages, unemployment, earned-income tax credit, minimum wage laws, job-training programs

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