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Katherine Newman on The Missing Class
Katherine Newman, photo  by Robin Holland
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November 2, 2007

Katherine Newman has spent her career studying the ups and downs of the economic landscape faced by American workers. In her latest book she has turned her attention on a increasing, and increasingly vulnerable segment of the population — the near poor. According to Newman the near poor are under the radar — a missing class:
"The missing class are families that are above the poverty line, but well below the middle class. So they earn about $20,000 to $40,000 a year for a family of four. The federal poverty line is $20,000. They have multiple jobs. Both as individuals and in their households. They often have to press their children into the labor market and pool that money so that their households can maintain themselves above the poverty line...They work every hour that exists. And sometimes that means they're not around very much for their children. Because they can't stay above the poverty line unless they put in many, many hours."

There are over 50 million Americans who fall into the missing class — including 20 percent of the nation's children. That's many millions more than the 37 million Americans who are living below the poverty level — a level which is the official cut-off for many federal services. (The 2006 poverty line stood at $20,614; for a family of four. More on poverty measurements from the Department of the Census.)

The near poor rarely make it into the news — or into academic or government measures. However, the ongoing battle over the reauthorization of the S-CHIP (The State Children's Health Insurance Program) has brought their problems into sharper focus. In 2006, the number of uninsured children increased from 8 million (10.9 percent) in 2005 to 8.7 million (11.7 percent). The battle between the White House and Congress ranges around how many children above the poverty line (and MEDICAID ineligible) should be covered by S-CHIP.

>More on the S-CHIP Debate

Poverty and Near Poverty in America

The high cost of health insurance is not the only factor making the lives of the near poor difficult to navigate. In a nation with a national personal savings rate hovering below 1% (and in the negative in 2005), those on the lower rungs of the American income ladder are especially vulnerable. And for a group which for the most part has earned "out" of the tax break for low-wage workers — the Earned Income Tax Credit — saving may be doubly difficult.

The recent meltdown in sub-prime mortgages has hit this group particularly hard. As Newman notes, the near poor are especially vulnerable to credit schemes — due in part to a lack of banks in neighborhoods with low income concentrations. Many of these neighborhoods also lack the budget benefits of big-box stores where consumers can purchase in bulk at cheaper prices. Add to that out-of-pocket expenses for day care, health insurance and low-wage pay.

home and cash Economists are noting that while the overall poverty rate has declined in recent years there has been a significant increase in economic instability, making those in the middle class, and the near poor, more likely to slip into and out of poverty than before. According to a study done at Washington University in St. Louis, "more Americans overall are experiencing poverty at some time during their lives than at any time during the past 30 years." As Katherine Newman notes, her book is about "those who have moved up into the near poor and are desperately hanging on...and there are others entering the missing class from the other direction. "There's a lot of vulnerability out there, even with unemployment being relatively low."

Education and Aspiration

Katherine Newman notes that the nine families she followed in the missing class have the same aspirations as the rest of the population reaching for "the American dream." "No one wants to slip below the poverty line. And no one wants their children to have a rough life. They want them to have a better life. In this, I think, we are really quite united as a people. And I sometimes get frustrated with my colleagues in the social sciences who write about people like this as if they were a different species."

school High among the factors that aids class movement is education — but in this area too, the near poor are sometimes left out of the equation. A recent NEW YORK TIMES story noted that as fast as financial aide rises, tuitions rise faster. Newman points out that the vast majority of financial aid goes to so called "traditional students" who are 18 - 27 and full-time. Yet one-third to one-half of students are now older, part-time and learning in community colleges.

S-CHIP is the main legislation currently poised to affect the near poor — but minimum wage, education, tax and bankruptcy reforms all can produce help or hurdles for the missing class. Newman states: "It's not clear that you can win an election focusing on the dispossessed in our country....So I think we need to put these people back on the radar screen. And understand that if we invest in them, we invest in the prosperity of the nation. This is not about welfare. This is not about handouts."

>Find out more about the families Newman profiled

Katherine S. Newman
Katherine S. Newman is the Malcolm Forbes Class of 1941 Professor of Sociology and Public Affairs and the Director of the Institute for International and Regional Studies at Princeton University. Formerly the Dean of Social Science at the Radcliffe Institute for Advanced Study at Harvard University and the Malcolm Wiener Professor of Urban Studies in the John F. Kennedy School of Government, Newman has also taught at Columbia University.

Newman is the author of eight books on topics ranging from urban poverty to middle class economic insecurity to school violence. Her most recent book (in collaboration with Victor Chen) is THE MISSING CLASS, an analysis of the condition of the near poor in American society. In previous books, such as NO SHAME IN MY GAME, FALLING FROM GRACE - DOWNWARD MOBILITY IN THE AGE OF AFFLUENCE, A DIFFERENT SHADE OF GRAY: MID-LIFE AND BEYOND IN THE INNER CITY and CHUTES AND LADDERS, she has chronicled the experiences of low-wage workers struggling against formidable odds to lift themselves out of poverty.

Newman has won a number of awards, including the Robert F. Kennedy Memorial Book Prize and the Hillman Book Award, and appears frequently on public radio and television. She's now working on a number of international studies including labor market discrimination in India and educational pathways in the post-apartheid South Africa.

Guest photo by Robin Holland

Published on November 2, 2007

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Bill Moyers talks with Barbara Ehrenreich, author of NICKEL AND DIMED: ON (NOT) GETTING BY IN AMERICA about inequality in America.


Payday for CEOs
Overpaid Airline Execs? While high-flying executives from the nation's top airlines get big compensation, workers and retirees are seeing cuts.

References and Reading:
Katherine S. Newman

"The Missing Class,: THE NATION, July 26, 2007
In an interview with Eyal Press, Newman discusses the plight of the near poor: "The near poor are people with household incomes between $20,000 and $40,000 a year for a family of four, or 100 to 200 percent of the poverty line. And there are actually almost twice as many of them as there are people under the poverty line — 57 million in the US. They represent, on the one hand, an improvement, forward motion, the promise of upward mobility. But their lives are not stable. They truly are one paycheck, one lost job, one divorce or one sick child away from falling below the poverty line."

"The Wages of Fear," Katherine Newman, THE NATION, posted February 26, 2004 (March 15, 2004 issue)

"Exposing the Truth about Minimum Wage," OPRAH
Katherine Newman and Barbara Ehrenreich talk about the real life of low-wage workers on OPRAH.

Additional Information

"America's 'Near Poor' Are Increasingly at Economic Risk, Experts Say,"
Erik Eckholm, THE NEW YORK TIMES, May 8, 2006

"The American Dream Foreclosed,"
Ford Fessenden, THE NEW YORK TIMES, October 14, 2007

"Haves and Have-Nots: Income Inequality in America"
A NPR series on income in America.

"Toward a New Understanding of American Poverty" by Mark R. Rank
Article adapted and modified from part of Rank's ONE NATION, UNDERPRIVILEGED: WHY AMERICAN POVERTY AFFECTS US ALL.

"In US, fewer are poor, more are working,"
Alexandra Marks, THE CHRISTIAN SCIENCE MONITOR, August 29, 2007

"U.S. Poverty Rate Drops; Ranks of Uninsured Grow,"
N.C. Aizenman and Christopher Lee, THE WASHINGTON POST, August 29, 2007

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KATHERINE NEWMAN ON THE MISSING CLASS
Moyers interviews Katherine S. Newman, author of THE MISSING CLASS: PORTRAITS OF THE NEAR POOR IN AMERICA, about the millions of near-poor in America, who are just one disaster away from poverty.
>More on the S-CHIP debate

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