Want to eradicate Chicago poverty? Create more full-time jobs

Want to eradicate Chicago poverty? Create more full-time jobs

Data shows full-time, year-round employment virtually guarantees Chicagoans will live above the poverty line.

Chicago is home to one of the most pressing poverty crises in the nation – a 17.2% poverty rate far higher than the national average of 11.5% – and the nation’s third-largest impoverished population at over 450,000.

Despite these facts, the data also reveals silver linings regarding poverty within Chicago and offers hope for solutions that would alleviate the issue.

Data from the U.S. Census Bureau shows employment status is the single-most important factor impacting the poverty rate. Full-time employees in Chicago not only face lower poverty rates than Americans in other large cities, but securing full-time, year-round employment virtually eliminates the odds of being in poverty.

Among those ages 16 and older who participate in the labor force, employees in Chicago face poverty rates of 6.8%, while the unemployed face poverty rates of 39.7%. While those who are unemployed receive no income, their poverty rates are less than 100% for a variety of reasons. The primary reason is because the data factors in a 12-month period, while bouts of unemployment typically last less than nine weeks.

Much more interesting revelations occur when sorting the ages 16-plus population by work status, including those who do not participate in the labor force. That data shows Chicagoans working full-time, year-round face poverty rates of only 2.3%. Those who work only part-time or part-year face poverty rates of 20.7%. Those who do not work at all face poverty rates of 31.3%.

While poverty rates among labor force participants are also higher across the board in Chicago compared to other major U.S. cities, employees, specifically full-time employees, in Chicago are less likely to live in poverty than their peers in other cities, consistent with the greater earning potential available in Chicago. Conversely, part-time employees and those who did not work or were unemployed in Chicago face higher instances of poverty.

Analyzing the shares of the poverty population based on work status yields telling results. In Chicago, only 3% (10,462) of the impoverished age 16-plus population were unemployed and actively seeking work for the past year, while 7% (23,513) worked full-time, year-round and 29% (96,849) were part-time.

Meanwhile, 61% of the poverty population – nearly 202,000 – were entirely out of the labor force. This cannot be simply explained by retirement-age Chicagoans. There are only 65,387 age 65-plus Chicagoans living in poverty, some of whom work (though the Census Bureau does not publish estimates for the exact number). The bulk of the nearly 202,000 people out of the labor pool are in their working-age years.

While some of these statistics may seem grim, the data also offers a potential solution: securing full-time, year-round employment yields the lowest poverty rates among the many variables reported by the Census Bureau. Evidence also suggests anti-poverty programs that incentivize work have been effective in increasing employment and raising incomes to promote upward mobility.

Future poverty alleviation solutions should focus on better employment outcomes for capable individuals. Removing cumbersome regulations, improving the quality of education and fostering an environment in which employees, employers and communities can flourish all present opportunities for public policy solutions that can reduce poverty and improve the lives of Chicagoans – regardless of their income status.

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