In researching her 2006 book, “Jobs Aren’t Enough: Toward a New Economic Mobility for Low-Income Families,” Roberta Iversen spent five years tracking 25 American families living week-to-week, month-to-month, paycheck-to-paycheck.

Most of the time, Iversen says, they weren’t getting by.

The project brought home to Iversen the sad reality faced by America’s “working poor”—the 25 percent of American families who, even with two working parents, simply don’t make enough to survive. As Iversen saw during her five-year project, their situations forced those families to make impossible choices—choices between food and health care, education and childcare. And that was the case back in the boom times of the early 2000s. Which raises the question: What will happen to these working poor now that the economy is tanking?

The Current recently caught up with Iversen, an associate professor in Penn’s School of Social Policy and Practice, to ask her that very question, as well as discuss the many other issues surrounding America’s working poor.

Q: What kind of challenges do the ‘working poor’ face in America?
A: They face a lot of really hard decisions. We had one family with a three-year-old in Wisconsin, and the child was at first in a really good, quality day care center. The father was employed in manufacturing but then he lost his job in the 2001 downturn. It took a while to get another job, and when he did, it didn’t pay as much as the previous job. … His wife had been on welfare, and she was a former alcoholic or drug user or both, and she also had fairly severe health conditions. At some point she had to stop working, and they just didn’t have the money to pay for the day care anymore. They ended up putting their daughter in a [lesser] day care facility, and eventually they found out they weren’t changing her diapers there. The daughter wasn’t getting the kind of stimulation that might have helped her later on. And this was a fairly typical kind of situation.

Q: I imagine health care was an ongoing concern for these people?
A: Yes, that’s a really big issue for them. Increasingly, it seems if employers contribute to health insurance at all, they contribute less and less. And we saw that once the co-pay or employee contribution got over $15 a month, they couldn’t afford it. So they would choose not to be covered.

Q: Are they generally burdened by debt?
A: Some of them, yes. We saw debt as much as $20,000. Some of them also got into trouble with credit cards, although [access] to credit has been cut back a lot and I’m not sure how much they’ll be offered credit going forward. The bigger debt they’re dealing with is stuff like hospital bills, or trying to pay off really esoteric cell phone bills where they don’t understand the [fine print]. They tend to get caught with stuff like that.

Q: Generally speaking, what did you learn from your book project?
A: There were two things we learned. The first was, we didn’t know previously, or at least didn’t understand the magnitude of the fact that many jobs just don’t pay enough. Wages are just too low in this country. Other countries manage this much better. Wages are too low and so, of course, people have to rely on subsidies. But we don’t have to have it organized that way. We also learned how critical it is that these institutions [intended to help people] be able to network together in order to figure out the best policies. But all of these departments are organized in silos.

Q: Knowing what you know about the working poor and their situation, how will the economic crises affect them?
A: Here’s what I’d say about that—the situation right now, both the economic situation and this huge banking crisis, is not going to affect them directly immediately. That’s partly because only a few of them own a house and most don’t have any assets or savings. They can’t afford a house, they have no mortgage, their employers don’t offer retirement packages, and even if they did they wouldn’t be able to afford to pay in anyway. So from that standpoint, they may not appear to be in very bad shape. However, the crisis is going to mean less money for the housing market, which means a slowdown in the building of low-income housing in cities like Philadelphia. And there’s a huge backlog of demand for that kind of housing. Meanwhile, employers are going to be cutting back on healthcare even more. We’re likely going to see an increase in the use of check-cashing agencies and even less bank usage. We can only hope social services don’t get cut back.

Q: When does the other shoe drop and we start seeing big job cuts?
A: Well, for nine months now we’ve already had steady job cuts. But there’s no question [more] are going to happen ... because of this financial mess. Businesses aren’t going to be able to borrow money to expand ... and possibly won’t be able to borrow enough money to simply afford their own expenses. There’s going to be more job cuts, no doubt. And that will be a problem.

Originally published Oct. 16, 2008