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Employment and Homelessness
This fact sheet examines the relationship between work and homelessness,
including the contribution of unemployment, underemployment, and low wages
to homelessness. It also assesses the employment barriers faced by homeless
people, and strategies for overcoming those barriers. A list of resources
for further study is also provided.
THE
CONTRIBUTION OF UNEMPLOYMENT AND LOW WAGES TO HOMELESSNESS
Media reports of a growing economy and low unemployment mask a number
of important reasons why homelessness persists, and, in some areas of
the country, is worsening. These include stagnant or falling incomes,
and less secure jobs that offer fewer benefits.
Wages
and Income
While the last few years have seen growth in real wages at all levels,
these increases have not been enough to counteract a long pattern of stagnant
and declining wages.
Low-wage
workers have been particularly hard hit by wage trends. As recently as
1967, a year-round worker earning the minimum wage was paid enough to
raise a family of three above the poverty line (Sklar, 1995). From 1981-1990,
however, the minimum wage was frozen at $3.35 an hour, while the cost
of living increased 48% over the same period. Congress raised the minimum
wage to $5.15 per hour in 1996. This increase made up only slightly more
than half of the ground lost to inflation in the 1980s; thus, the real
value of the minimum wage in 1997 was 18.1% less than in 1979 (Mishel,
Bernstein, and Schmitt, 1999). Full-time year-round minimum-wage earnings
currently equal 84% of the estimated poverty line for a family of three.
Contrary to popular belief, the majority of minimum-wage workers are not
teenagers: 71.4% are age 20 or older (Mishel, Bernstein, and Schmitt,
1999).
In
addition to the erosion in the value of the minimum wage, factors contributing
to wage declines include a steep drop in the number and bargaining power
of unionized workers; a decline in manufacturing jobs and the corresponding
expansion of lower-paying service-sector employment; globalization; and
increased nonstandard work, such as temporary and part-time employment
(Mishel, Bernstein, and Schmitt, 1999).
Declining
wages, in turn, have put housing out of reach for many workers: in every
state, more than the minimum wage is required to afford a one- or two-bedroom
apartment at Fair Market Rent (National Low Income Housing Coalition,
1998).1 In fact, in the median state a minimum-wage worker would have
to work 87 hours each week to afford a two-bedroom apartment at 30% of
his or her income, which is the federal definition of affordable housing.
In addition, 40% of households with "worst case housing needs"
-- households paying over half their incomes for rent, living in severely
substandard housing, or both -- have at least one working person. This
represents a 32% increase in working households with worst case housing
needs from 1993 to 1995 (U.S. Housing and Urban Development, 1998).
The
connection between impoverished workers and homelessness can be seen in
homeless shelters, many of which house significant numbers of full-time
wage earners. A survey of 30 U.S. cities found that almost one in five
homeless persons is employed (U.S. Conference of Mayors, 1998). In a number
of cities not surveyed by the U.S. Conference of Mayors - as well as in
many states - the percentage is even higher (National Coalition for the
Homeless, 1997).
The
future of job growth does not appear promising for many workers: a 1998
study estimated that 46% of the jobs with the most growth between 1994
and 2005 pay less than $16,000 a year; these jobs will not lift families
out of poverty (National Priorities Project, 1998).2 Moreover, 74% of
these jobs pay below a livable wage ($32,185 for a family of four).
Job
Security and Underemployment
Not only have wages stagnated or declined over the last two decades, but
job stability and job security have deteriorated. The share of workers
in "long term jobs" (those lasting at least 10 years) fell sharply
between 1979 and 1996, with the worst deterioration taking place since
the end of the 1980s (Mishel, Bernstein, and Schmitt, 1999). Another measure
of job stability, involuntary job loss, has increased in recent years.
Displaced workers face difficulty finding new employment; when they do
find work, their new jobs pay, on average, about 13% less than the jobs
they lost. And more than one-fourth of those who had health insurance
on their old jobs don't have it at their new ones (Mishel, Bernstein,
and Schmitt, 1999).
Another
trend impacting job security is non-standard work. Almost 30% of workers
in 1997 were employed in non-standard work arrangements -- for example,
independent contracting, working for a temporary help agency, day labor,
and regular part-time employment (Mishel, Bernstein, and Schmitt, 1999).
These kinds of work arrangements typically offer lower wages, fewer benefts,
and less job security.
A
useful measure of the decline in job security is underemployment. Unlike
the unemployment rate, measures of underemployment reflect not only individuals
who are unemployed, but also involuntary part-timers and those who want
to work but have been discouraged by their lack of success. In 1997, the
underemployment rate stood at 8.9%, substantially higher than the 4.9%
unemployment rate. One reason for the higher level of underemployment
is the increasing number of involuntary part-time workers -- workers who
want to work full time but have only been able to obtain part time work.
Thus,
for many Americans, work provides no escape from poverty. The benefits
of economic growth have not been equally distributed; instead, they have
been concentrated at the top of income and wealth distributions. A rising
tide does not lift all boats, and in the United States today, many boats
are struggling to stay afloat.
BARRIERS
TO EMPLOYMENT FACED BY HOMELESS PEOPLE
As bad as it is for the 20% of homeless people who have jobs and can't
escape homelessness, climbing out of homelessness is virtually impossible
for those without a job. For those with limited skills or experience,
opportunities for jobs that pay a living wage are very limited. In such
a competitive environment, the difficulties of job-seeking as a homeless
person can be almost insurmountable barriers to employment.
Much
has been learned from programs designed to help homeless people obtain
and maintain employment. In 1988, the U.S. Department of Labor began administration
of the Job Training for the Homeless Demonstration Program (JTHDP). Authorized
by the Stewart B. McKinney Act, the JTHDP program provided funds for basic
skills and literacy instruction, job training, referral, and job search
activities. A national evaluation of the JTHDP program found that barriers
to employment experienced by homeless people include lack of education
or competitive work skills, lack of transportation, lack of day care,
and disabling conditions (U.S. Department of Labor, 1994). The evaluation
found that successful employment programs must provide access to a wide
array of services, including housing, to help homeless persons overcome
obstacles to employment. The evaluation concluded that if national employment
and training initiatives (such as the Job Training Partnership Act, or
JTPA) are to serve effectively America's homeless population, they must
specifically target their outreach and enrollment efforts to homeless
individuals.
POLICY
ISSUES
Although funding for the JTHDP program was terminated in FY1995, Congress
has indicated that it expects the U.S. Department of Labor to use the
expertise gained from the JTHDP program to enhance the capacity of national
employment programs such as the JTPA to serve homeless individuals (Foscarinas,
1996). As lessons from the JTHDP make clear, if homeless persons are to
benefit from national employment and training programs, those programs
must include specific components to meet their needs.
While
employment and training programs geared to homeless people have proven
to be effective in helping homeless persons obtain work, successful completion
of an employment program by a homeless person does not necessarily end
his or her homelessness. He or she still needs a decent job and a place
to live.
Ending
homelessness will require closing the gap between income and housing costs.
In such an equation, jobs which pay a living wage are critical. Government,
labor, and the private sector must work in concert to ensure that all
Americans who can work have an opportunity to obtain a job which pays
a living wage, and the necessary supports, such as child care and transportation,
to keep it.
FOOTNOTES
1. FMRs are the monthly amounts "needed to rent privately owned,
decent, safe, and sanitary rental housing of a modest (nonluxury) nature
with suitable amenities." Federal Register. HUD determines FMRs for
localities in all 50 states. [Back].
2.The poverty line for a family of three is $12,750; for a family of four,
the poverty line is $16,813. See http://www.census.gov/hhes/ww w/poverty.html
for details.[Back].
RESOURCES
Foscarinas, Maria. "The Federal Response: The Stewart B. McKinney
Homeless Assistance Act," in Homelessness in America, 1996, Oryx
Press. Available for $43.50 from the National Coalition for the Homeless,
1012 14th Street, NW, Suite 600, Washington, DC 20005; 202/737-6444.
Mishel,
L., Bernstein, J., and Schmitt, J. The State of Working America: 1998-99,
1999. Available for $24.95 (paper) from the Economic Policy Institute,
1660 L Street, NW, Suite 1200, Washington, DC 20036; 202/331-5510.
Gilbert,
April. Employing Homeless Job Seekers: A Primer For Businesses, 1993.
Available for $20.50 from HomeBase, 870 Market St., Suite 1228, San Francisco,
CA 94102 2907; 415/788-7961.
National
Coalition for the Homeless. Homelessness in America: Unabated and Increasing,
1997. Available for $6.25 from the National Coalition for the Homeless,
1012 14th Street, NW, Suite 600, Washington, DC 20005; 202/737-6444.
National
Low Income Housing Coalition. Out of Reach: Rental Housing at What Cost?,
1998. Available from the National Low Income Housing Coalition at 1012
14th Street, Suite 610, Washington, DC 20005; 202/662-1530.
National
Priorities Project and Jobs with Justice. Working Hard, Earning Less:
The Future of Job Growth in America. Available from the National Priorities
Project, 17 New South Street, Suite 301, Northampton, MA 01060; 414/584-9556.
Sklar,
Holly. Jobs, Income, and Work: Ruinous Trends, Urgent Alternatives, 1995.
Available for $10.00 from American Friends Service Committee, 1501 Cherry
St., Philadelphia, PA 19102; 215/241-7048; outside the 215 area code:
888-588-2372.
U.S.
Conference of Mayors. A Status Report on Hunger and Homelessness in America's
Cities: 1998. Available for $15.00 from the U.S. Conference of Mayors,
1620 Eye St., NW, 4th Floor, Washington, DC, 20006-4005, 202/293-7330.
U.S.
Department of Housing and Urban Development, Office of Policy Development
and Research. Rental Housing Assistance -- The Crisis Continues: 1998
Report to Congress on Worst Case Housing Needs, 1998. Available for $5.00
from HUD User, P.O. Box 6091, Rockville, MD, 20850, 800/245-2691.
U.S.
Department of Labor. Employment and Training for America's Homeless: Report
on the Job Training for the Homeless Demonstration Program, 1994. Out
of Print. U.S. Department of Labor, Employment and Training Administration,
200 Constitution Ave. NW, Rm. N-5638, Washington, DC 20210.
Whiting,
Basil J. Employing the Formerly Homeless: Adding Employment to the Mix
of Housing and Services, 1994. Available, for $10.00, from the Corporation
for Supportive Housing, 342 Madison Ave., Suite 505, New York, NY 10173;
212/986-2966.
Last
updated - February 1999 - National Coalition for the Homeless
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