1. Who are America's low-income working families?

That's not an easy question to answer. A lot of working families are not technically working poor because their incomes hover above the poverty line. Yet, they still struggle to pay bills.

The poverty line is misleadingly low. Many families earning above poverty still need support, despite working hard and playing by the rules. So rather than talk about the working poor, we talk about low-income working families. And for low-income, we use the threshold of twice the poverty line—that's around $38,000 a year for a family of four. Poor is at the poverty line or below.
families. They just don't earn as much.

2. How do they balance work and children?

When talking about low-income working families, the question of child care comes up very quickly. To take a job, a single mother has to find reliable and affordable child care. And then there's the conflict of whether to stay at work when the child is sick.

But it's useful to keep in mind that, among all low-income working families, nearly half (46 percent) are married. Another third have multiple adults present. Only one in five of these families is headed by a single parent. Even fewer have children under age five. So, less than a quarter is actually using child care.

The need for child care is very important for families that have no other options. But what you most often see is the dad going out to work and the mom staying at home.

The general work/family balance issues for low-income families are similar to what middle income families face. Poorer families just don't have the same resources to help balance out work-family issues. Lack of enough income always makes things harder.

3. How are they making ends meet?

We don't know for sure what these families are spending their money on and whether their income lasts until the end of the month. But we do that their income, on average, is about $25,000 a year. That takes into account any subsidies they may be getting, including tax credits and food stamps.

Housing is the major expense for most of these families. They spend about $8,000 on housing, or a third of their income. For those who must purchase it, child care is another significant expense. Now, again, only about a quarter of these families are paying for child care, but they're spending over $3,000 a year, or around 12 and a half percent. For families that pay for child care, that's a lot.

Health care expenditures are, on average, a little over a $1,000 per year. But health care is a very skewed expense. Lots of families have no more than a few co-pays for doctors' visits—not a ton of money. But those with significant health care expenses spend thousands and thousands of dollars.

All families pay for food. Conveniently, the poverty line is based on how much the government thinks should be spent on food—about one-third of income. For a family of four, where the poverty line is about $19,000, that would be about $6,300 a year estimated for food.

In any given month, it appears that these low-income working families can stretch their income far enough to meet their basic expenses. They're getting by. But it's tight.

When we look at poor working families, those falling below the poverty line, they're not making ends meet. Their expenses are much higher than their incomes. We only can assume that they're deciding whether to pay the electric bill or the heating bill this month.

4. What happens when an illness or job loss strike?

If something goes wrong, that can be a huge problem for these families because there is no cushion. Every nickel and every dime is accounted for. But to come up with $500 for a car repair, or to lose $2,000 in wages when you can't work for a month, may not be available in savings.

The real problem for the low-income working family is not the day-to-day when everything is under control. It's when things spin out of control.

And it's the precariousness of their position—over a third of these families don't have health insurance, despite having a full-time worker.

What researchers don't know yet is the consequences of these setbacks for low-income working families. Is it a temporary setback and they rebound quickly? Or, does it set off a series of negative events that makes it very hard for a low-income working family to get back on course? These are questions that we need to answer.

5. What should policymakers do?

It's not necessarily the day-to-day needs of these families that need attention. The big challenge is providing help in managing the risks of a health crisis or a job loss. What can be done to tide low-income families over? Individual Development Accounts or special savings accounts for those who can't afford an IRA are some ideas.

Expanding health insurance options and coverage for these families is also important. There are many different ways to get the job done, whether through subsidizing or expanding public programs.

Even if policymakers can't increase these families' incomes, they could improve quality of life. That could mean making sure neighborhoods are safe, with adequate police protection, good parks, good after-school programs, good community centers and libraries—things that make the community better. These are amenities that higher-income families can purchase privately, but are just harder for low-income families in low-income communities to get.

Let me say how significant some public programs are for low-income working families. They get a substantial benefit, on average, from the Earned

Income Tax Credit—a program worth maintaining and improving. There is also some discussion about increasing the minimum wage, though these families are already well above the minimum wage.

In our desire to do something for low-income working families, we shouldn't forget the poor and low-income families without full-time workers. These families often face more dire economic situations than working low-income families. Working more hours may be particularly challenging for them since many have low-skill levels, poor physical and mental health, and very young children.

Policymakers need to make tough choices about which resources go to low-income working families and which go to those one rung below them on the economic ladder.