American Psychologist

© 2019 American Psychological Association 2019, Vol. 74, No. 6, 673– 684
0003-066X/19/$12.00 http://dx.doi.org/10.1037/amp0000468

Employment and Poverty: Why Work Matters in Understanding Poverty

Mindi N. Thompson Jason J. Dahling

University of Wisconsin–Madison The College of New Jersey

This article synthesizes the work-related dynamics that contribute to economic inequality and
identifies ways for psychologists to offer their expertise to mitigate poverty through employment
and re-employment. We summarize scholarship from subspecialties under the umbrella of work
This article is intended solely for the personal use of the individual user and is not to be disseminated broadly.

psychology to explore concepts germane to understanding unemployment, underemployment, and

This document is copyrighted by the American Psychological Association or one of its allied publishers.

reemployment. The review and synthesis is organized around 4 primary themes that concern the
relationships between work, economic inequality, and poverty. First, unemployment has devas-
tating financial and psychological consequences for individuals, families, and communities.
Second, reemployment is challenging to acquire but crucial to recovering from unemployment
and escaping poverty. Third, systemic and societal factors, such as employment bias and gaps in
employment law, shape and constrain employment processes for individuals and organizations.
Fourth, the nature of employment is changing because of technological advances, growth in the
contingent labor force, and globalized business relationships that introduce new concerns for
underemployment, unemployment, and reemployment processes for individuals. We conclude by
charting important directions for future research, describing promising interventions for practi-
tioners, and summarizing opportunities for psychologists to apply their knowledge and expertise
to support policies that can alleviate poverty.

Public Significance Statement

This article integrates research on the psychology of seeking, holding, and losing work to highlight
how psychology can contribute to the alleviation of poverty. Evidence from the work psychology
literature highlights the devastating consequences of unemployment, the crucial role of re-
employment in contributing to economic security, the ways that systemic and societal factors
negatively shape and constrain re-employment, and the emergent economic forces that may introduce
new threats and opportunities for access to decent work. Drawing on this analysis, psychologists can
leverage their skills and expertise to mitigate poverty by understanding these work-related dynamics
in their research, practice, and public advocacy.

Keywords: poverty, unemployment, underemployment, reemployment, work psychology

The lingering consequences of the Great Recession of towidigdo, & Katz, 2016). Against this backdrop, many
2007 to 2009 have made the connection between work and individuals who are “successfully employed” are actually
poverty abundantly clear around the world. Unemployment underemployed in positions that do not suit their needs or
remains perilously high in many countries, such as Spain abilities, and ongoing wage stagnation threatens the ability
and Greece, while concerns about the long-term unem- of millions of workers to meet their daily living needs (e.g.,
ployed persist in the United States and Western Europe McKee-Ryan & Harvey, 2011). Moreover, looming
despite improving unemployment rates (Kroft, Lange, No- changes, such as increased automation, threaten to further

Editor’s note. This article is part of a special section, “Psychology’s Con- Portions of this article contributed to Guideline 9 of “Guidelines for
tributions to Understanding and Alleviating Poverty and Economic Inequality,” Psychological Practice for People with Low-Income and Economic Mar-
published in the September 2019 issue of American Psychologist. Heather E. ginalization” (American Psychological Association, 2019; http://apa.org/
Bullock served as guest editor, with Diane M. Quinn as advisory editor. about/policy/guidelines-supervision.pdf).
Correspondence concerning this article should be addressed to Mindi N.
Authors’ note. Mindi N. Thompson, Department of Counseling Psy- Thompson, Department of Counseling Psychology, University of
chology, University of Wisconsin–Madison; Jason J. Dahling, Department Wisconsin–Madison, 335 Education, 1000 Bascom Mall, Madison, WI
of Psychology, The College of New Jersey. 53706. E-mail: mindi.thompson@wisc.edu

673
 674 THOMPSON AND DAHLING

ensuring that people have access to decent work that pro-

vides a fair, livable income; security and safety in the
workplace; and freedom to organize and express voice
inside and outside of the organization (International Labor
Organization, 2017).
People without decent work opportunities may be under-
employed, unemployed, or nonemployed. Underemploy-
ment occurs when a person holds a job that is inadequate in
some respect relative to their needs or desires (McKee-Ryan
& Harvey, 2011). In contrast, people who are unemployed
are unable to utilize their skills and abilities until they
successfully complete a job search and become reemployed.
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Unfortunately, the difficulty of finding work opportunities

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during and after the Great Recession also has contributed to

a growing segment of people who are nonemployed; their
unemployment experiences have persisted for so long that
they have effectively exited the workforce entirely (Bureau
of Labor Statistics, 2017a).
Identifying the prevalence of these employment statuses
Mindi N.
is difficult. Although unemployment rates in the United
Thompson
States have improved with greater distance from the Great
Recession, this improvement masks underlying economic
problems. For example, 5.2 million people in the United
destabilize traditional work opportunities and make the
States are underemployed in the sense that they are invol-
specter of economic insecurity real for a growing number of
untary part-time workers who hold jobs but are unable to
people.
secure full-time work with salary and benefits despite their
The purpose of this article is to synthesize an understanding
efforts (Bureau of Labor Statistics, 2017b). Data concerning
of how these work-related dynamics contribute to economic
the rate of underemployment related to overqualification or
inequality and to identify ways for psychologists to contribute
skill underutilization are far more difficult to collect. Fur-
to our understanding of employment and reemployment. We
ther, documented rates of unemployment and underemploy-
include a variety of perspectives that fall under the broad
ment are likely underestimates because of the difficulty of
umbrella of “work psychology” (e.g., industrial/organizational
identifying people who have insecure housing, who are not
[I/O] psychology, vocational psychology, rehabilitation psy-
actively searching for work, or who are not receiving gov-
chology, humanitarian work psychology [HWP], organiza-
ernment benefits. Underemployment and unemployment
tional behavior [OB], and labor relations). These disciplines
rates also vary considerably across demographic character-
focus on work, and the income associated with it, as the key
istics and geography. For example, Black and Latino work-
element that helps people avoid, and recover from, poverty
ers in the United States face higher rates of job loss than
(e.g., McKee-Ryan, Song, Wanberg, & Kinicki, 2005). Be-
their White counterparts (e.g., Strully, 2009), and women
cause work offers an immediate and tangible path away from
around the world are more likely to be underemployed in
poverty, work psychologists can leverage their knowledge of
part-time work than men (e.g., Bullock & Reppond, 2017).
job search processes to help understand and alleviate economic
Consequently, any discussion of economic inequality and
insecurity through employment and reemployment.
poverty in relation to work is incomplete without attention
to the multiple and intersecting identities held by individu-
Linking Employment and Poverty als.
Poverty is a financial circumstance that prevents an ac-
ceptable standard of living and thwarts individuals’ chances
Insights From Work Psychology to Understand
to exercise personal agency in order to pursue opportunities
and Alleviate Poverty
(e.g., Sen, 1999). Participation in the labor force in a manner
that provides adequate income and resources is a primary Although work psychologists have much to contribute to
means by which people avoid or escape poverty. Yet not all understanding and mitigating poverty, attention to these
forms of work are equally sufficient to avoid poverty and issues has been relatively recent, especially in I/O and OB
employment does not guarantee moving out of poverty (L. because of their historic alignment with organizations and
Smith, 2015). A core concern of HWP, an offshoot of I/O management (Gloss, Carr, Reichman, Abdul-Nasiru, &
psychology focused on serving marginalized workers, is Oestereich, 2017). Within vocational psychology, only re-
 WORK AND POVERTY 675

iety, and psychosomatic symptoms, and lowered levels of

subjective well-being and self-esteem, compared with their
employed counterparts (Paul & Moser, 2009). The negative
outcomes associated with job loss and underemployment
are theorized to occur via two mediating mechanisms: loss
of identity and lowered access to financial resources. First,
loss of employment undermines one’s sense of identity,
security, and self-worth because of the centrality of work in
many people’s lives (e.g., Ali et al., 2013; Blustein, 2006).
These losses, in turn, increase susceptibility to mental and
physical health concerns (e.g., Price, Choi, & Vinokur,
2002). Second, job loss and underemployment contribute to
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negative outcomes because people who are financially un-

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stable have fewer resources to cope with stressors (McKee-

Ryan & Harvey, 2011).
Consequences for families. The consequences of job
loss ripple outward to the family members of those who are
unemployed (e.g., Schliebner & Peregoy, 1994). This expe-
rience is known as vicarious unemployment (VU; Thomp-
son, Nitzarim, Her, & Dahling, 2013). Unemployment
Jason J. Dahling
within the family may lead to increases in financial stress
and strain, increased rates of abuse, and lowered ability to
cent scholarship on the Psychology of Working Framework fiscally support all family members (e.g., Kalil, 2013).
(Blustein, 2006) explicitly focuses on the linkages between Following job loss, partner relational stress, strain, and
poverty and work by exploring how work fulfills humans’ conflict may increase; unstable employment is considered to
needs for survival, relational connections, and self- be a risk factor for divorce (Jensen & Smith, 1990). Accu-
determination. In the sections that follow, we integrate these mulated stress and strain within the partner unit trickles
piecemeal strands to identify four primary themes that en- down to parent– child relationships such that parental job
capsulate the ways in which work, and lack thereof, is loss has adverse effects on children and adolescents (e.g.,
intertwined with economic inequity. The extensive litera- Christoffersen, 1994; Sleskova et al., 2006). Children with
tures on each theme are summarized to illustrate the com- an unemployed caregiver may experience feelings of hope-
plex relationship between work and poverty and in an effort lessness, confusion, anger, insecurity, embarrassment, and
to highlight directions for future research, practice, and loneliness (Morris-Vann, 1990). The downstream negative
policy. outcomes for children and adolescents include increased
depression, anxiety, and stress, lower levels of social sup-
port, and increased suicidal ideation (e.g., Nitzarim &
Theme 1: Unemployment Creates Devastating
Thompson, 2017; Sleskova et al., 2006). For adolescents,
Financial and Psychological Consequences
VU may have long-term consequences in the form of
The clearest theme within the literature on work and caregiver– child relationship conflict, strain, and stigmatiza-
poverty concerns the devastating effects of unemployment tion (e.g., Thompson et al., 2013).
and underemployment on individuals, families, and com- VU also has long-term consequences for educational and
munities. The negative consequences of job loss and under- career development. Parental unemployment relates to low-
employment for individual people have been extensively ered school performance, increased rates of expulsion and
documented (e.g., Paul & Moser, 2009). Within communi- school dropout, and lowered likelihood of attending college
ties, these consequences aggregate and precipitate the onset (e.g., Rege, Telle, & Votruba, 2011). Longer term implica-
of poverty, which amplifies income discrepancies between tions include adolescent and young adults’ lowered confi-
those with and without stable employment (Nichols & Cal- dence in the economic system and disillusionment regarding
lan, 2011). the possibilities of future employment (Isralowitz & Singer,
Consequences for individuals. Unemployment and 1986), increased worry about future career prospects and the
underemployment carry a wide range of human costs, which job market (Thompson et al., 2013), and lower earnings as
include financial loss, increased social isolation and stress, adults (e.g., Oreopoulos, Page, & Stevens, 2008).
decreased social status, and loss of daily routine (Ali, Fall, Consequences for communities. Higher regional un-
& Hoffman, 2013). For example, people who were unem- employment rates relate to higher neighborhood poverty
ployed exhibited higher levels of distress, depression, anx- rates, which, in turn, have negative implications for com-
 676 THOMPSON AND DAHLING

munity members (Wilson, 1996). Data from six countries forth, 2002). Much research focuses on the extent to which
showed the positive relationship between neighborhood un- successful reemployment in full-time and stable work can
employment rates and mortality (van Lenthe et al., 2005), partially or fully offset the detrimental consequences that
and research with a variety of U.S. samples has demon- people experience following the original job loss (Park et
strated that heightened neighborhood economic stress re- al., 2016). Reemployment allows individuals to accrue eco-
lates to decreases in overall life satisfaction and health nomic resources to meet basic needs for survival, which
among residents (e.g., Fenwick & Tausig, 1994). These subsequently mitigates some of the immediate detrimental
negative consequences are attributed to increased feelings consequences of job loss on health (e.g., Gowan, 2012; Paul
of helplessness and hopelessness, lowered levels of com- & Moser, 2009). However, some negative economic effects
munity collective efficacy and cohesion, and fewer organi- associated with unemployment or underemployment may
zational resources available to community members (Wil- persist despite securing reemployment, a phenomenon
son, 1996). known as scarring. Psychologists posit that long-term scar-
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Community-level effects of unemployment are most ev- ring following job loss and underemployment extends be-
This document is copyrighted by the American Psychological Association or one of its allied publishers.

ident when macroeconomic forces in the labor market, such yond wages to a number of life domains, including lowered
as organizational failures or economic recession, result in levels of job and life satisfaction (Verbruggen, van Em-
widespread job loss in a localized area and short period of merik, Van Gils, Meng, & de Grip, 2015) and higher mor-
time (Dahling, Melloy, & Thompson, 2013). Just as changes tality rates (Sullivan & von Wachter, 2009). Scarring may
at the family level affect a family’s ability to access re- be more prevalent among some groups than others. For
sources, broad economic changes at the community level example, in their U.S.-based longitudinal study, Park et al.
affect the community’s levels of income, wealth, debt, (2016) showed that the benefits of reemployment on health
crime, and educational resources. These implications can be
were stronger for men than women, for African Americans
seen via case examples at regional (e.g., urban growth boom
versus members of other racial/ethnic groups, and for those
in the emirate of Dubai in 1990s), national (e.g., Germany
without a college degree versus those with a bachelor’s
after World War I), and international (e.g., the Great Re-
degree or higher.
cession of 2008) levels.
Factors that affect reemployment. Reemployment dy-
Macroeconomic changes operate on communities through
namics are complex and subject to a variety of intraper-
a variety of mechanisms. For example, massive job loss
sonal, interpersonal, and environmental factors. At the in-
within a community results in fewer employed role models
and increased stress in teacher-to-student and student-to- trapersonal level, much research focuses on the concept of
student interactions (Weiland & Yoshikawa, 2012). It also employability, which encompasses characteristics of the job
detracts from residential stability (the proportion of individ- seeker, including relevant skills, knowledge, and experi-
uals who have lived in their homes for at least 5 years), ence, that make them attractive to prospective employers
which undermines community cohesion and efficacy (e.g., (Fugate, Kinicki, & Ashforth, 2004). Individuals with high
Molnar, Cerda, Roberts, & Buka, 2008). employability tend to be buffered against some of the neg-
ative effects of job loss and more easily become reemployed
(Gowan, 2012). In addition, other intrapersonal traits influ-
Theme 2: Re-Employment Is Challenging but ence reemployment by facilitating job search processes and
Crucial to Recover From Unemployment improving one’s ability to cope with job loss. These traits
Reemployment in decent work alleviates some of the include optimism and positive affect (e.g., Côté, Saks, &
negative consequences of unemployment. It is one mecha- Zikic, 2006), high levels of autonomous motivation (Koen,
nism that allows individuals to avoid or escape poverty and van Vianen, Van Hooft, & Klehe, 2016), self-regulatory
longer term income insecurity, and successful reemploy- capacity (e.g., Wang, Liao, Zhan, & Shi, 2011), and strong
ment facilitates improvements in well-being (e.g., Gowan, mediating cognitions such as self-efficacy and outcome
2012; Park, Chan, & Williams, 2016). Reemployment is, expectations (e.g., Vansteenkiste, Lens, De Witte, De Witte,
however, a complex process that is dependent on many & Deci, 2004).
individual and environmental factors. At the interpersonal level, high social capital and broad
Reemployment processes. Reemployment and job re- networks have benefits for job recovery (e.g., Van Hoye,
covery refer to the process by which individuals who are Van Hooft, & Lievens, 2009). Greater access to opportuni-
underemployed or unemployed regain work that is satisfac- ties, including learning experiences, skills development, and
tory in terms of rewards, fit, and job characteristics that job search resources, has positive implications for reem-
align with job seekers’ needs, values, and goals (e.g., full- ployment prospects (van Dam & Menting, 2012). Further,
time vs. part-time; Kalleberg, 2008). Successful reemploy- individuals who have an abundance of casual, professional
ment, therefore, is a subjective experience that varies across relationships are more likely to learn about job openings,
individuals depending on their life situations (Saks & Ash- gain in-depth information about the potential fit of posi-
 WORK AND POVERTY 677

tions, and receive feedback to facilitate job recovery (Mc- a common target of discrimination in North America, Aus-
Donald, 2010). tralia, and Europe (e.g., Myors et al., 2008). For example,
Given these factors, reemployment dynamics are chal- Turkish immigrants are particularly likely to experience
lenging for women, particularly women of color and women employment discrimination in Germany, which subse-
who are the heads of households with children (e.g., Bullock quently impacts their mental and physical health (Schunck,
& Reppond, 2017). Globally, women are overrepresented Reiss, & Razum, 2015).
among those who are poor, are more likely to exit the paid In the United States, research has documented extensive
workforce to engage in caregiving labor, are more likely to discrimination toward African American and Latino job
be underemployed, are less educated, and are underrepre- seekers relative to comparable White candidates (Holzer,
sented among the highest earners, compared with their male Offner, & Sorensen, 2005). One of the most common ways
counterparts (Bullock & Reppond, 2017; Villalobos, 2014). that discrimination in selection and hiring has been exam-
As such, satisfactory reemployment is more challenging for ined is via field experiments, such as résumé audit studies
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women with limited social and economic capital. For ex- that measure differences in callback rates for fictitious job
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ample, evidence suggests that public initiatives, such as applicants. Studies have repeatedly shown evidence of ra-
welfare-to-work programs, can help single mothers find cial discrimination by hiring managers who are more likely
work, but these programs commonly yield low-wage jobs to respond favorably to White applicants than African
with inadequate benefits (Povich, Roberts, & Mather, American applicants; these findings persist even after con-
2014). trolling for factors such as job qualifications (e.g., Bertrand
There are a variety of other macrolevel, environmental & Mullainathan, 2004). The disparities are heightened when
variables, such as regional shifts in economic outlook (e.g., the individual is also portrayed as having a criminal record,
factory relocations) and political instability (e.g., social
even when applying to low-wage jobs (Pager, Bonikowski,
unrest and war) that are important to consider in the context
& Western, 2009). Results from a recent meta-analysis
of job recovery processes (Van Hooft, Wanberg, & Van
(Quillian, Pager, Hexel, & Midtbøen, 2017) of 24 published
Hoye, 2013). Such events may affect workers within vary-
field experiments examining hiring bias since 1989 revealed
ing job classifications disproportionately (e.g., factory clos-
that Whites received more callbacks than their African
ings are more likely to affect blue collar workers). In
American and Latino counterparts. Specifically, there was
addition, individuals searching for work in communities
no change in hiring discrimination against African Ameri-
with high levels of unemployment may be less likely to feel
optimistic about job prospects. For example, in a U.S. cans, and hiring discrimination against Latinos declined
sample of adults who were unemployed, the relationship only modestly. These results held when controlling for
between individual financial strain and job search self- factors including the fictitious applicant’s gender and edu-
efficacy depended on objective job market characteristics cation level.
such that strain was negatively related to job search self- Individuals from racial and ethnic minority groups face
efficacy in regions with higher rates of unemployment but added challenges when seeking reemployment related to a
unrelated in regions with lower unemployment rates (Dahl- variety of factors that are compounded by poverty. These
ing et al., 2013). include insufficient local job opportunities, documented dis-
parities in postsecondary educational attainment compared
with their White counterparts, and prior work history such
Theme 3: Systemic and Societal Factors Shape as gaps in employment or less prestigious occupations
Employment Processes (Schaffer & Taylor, 2012). Similarly, older job seekers and
A third theme in the literature focuses on systemic and job seekers with disabilities find reemployment more diffi-
societal biases that affect the relationships among unem- cult following job loss than younger job seekers or people
ployment experiences, reemployment processes, and pov- without disabilities, respectively (e.g., Wanberg, Watt, &
erty for members of disadvantaged groups. Put simply, Rumsey, 1996). Meta-analytic findings demonstrated that
finding and maintaining decent work is harder for some older individuals who lost their job were slower to find new
groups than others. Work psychology has long documented employment, received fewer job offers, and were more
overt and subtle biases that make unemployment and pov- likely to remain unemployed than their younger counter-
erty more likely and reemployment more challenging. parts (Wanberg, Kanfer, Hamann, & Zhang, 2016). These
Employment biases against particular disadvantaged discrepancies are posited to exist, in part, because of nega-
groups. Employment bias is a common form of discrim- tive stereotypes among potential employers regarding older
ination expressed toward women and socially disadvan- job seekers’ presumed salary requirements, abilities, and
taged racial, ethnic, and religious groups around the world. flexibility (Lippmann, 2008). Job seekers with disabilities
Although different groups are stigmatized in different na- face similar reemployment challenges because they are as-
tions, much recent research documents that immigrants are sumed to have limited skills or to need accommodations that
 678 THOMPSON AND DAHLING

may be costly or inconvenient (e.g., Blustein, Kozan, & to abuse; for example, women from Southeast Asian coun-
Connors-Kellgren, 2013). tries who migrate to Asia and the Middle East for domestic
Because of the moral and cultural importance of paid work opportunities face considerable challenges because of
work in many societies, people who experience extended restrictive immigration policies, socially acceptable dis-
unemployment may encounter social disapproval or rejec- crimination, and human rights violations (Varia, 2011).
tion, which can exacerbate the negative outcomes of job loss They are unable to escape these conditions and seek alter-
(Schliebner & Peregoy, 1994). Although it is difficult to native jobs because many immigration policies and laws in
establish clear links between length of unemployment and host countries bind workers to a specific employer, which
reemployment, growing evidence suggests that individuals creates severe power imbalances that enable abusive treat-
who have had periods of unemployment are stigmatized in ment (Varia, 2011).
ways that harm job recovery efforts. Prospective employers
may stereotype individuals who are unemployed as flawed
Theme 4: Employment Is Changing in Ways
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or lacking in motivation (Melloy & Liu, 2014). For exam-

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ple, Kroft, Lange, and Notowidigdo (2013) found that call- That Introduce New Concerns
back rates were 45% lower for individuals who had 8 Advancements such as automation, contingent employ-
months of unemployment compared with individuals who ment relationships, and ongoing globalization are poised to
had 1 month of unemployment. Similarly, an experimental greatly disrupt the nature of employment and reemploy-
study with fictitious resumes by Ghayad (2013) demon- ment. Such changes may increase the likelihood of unem-
strated a sharp decline in interview invitations following 6 ployment and underemployment for many workers whose
months of nonemployment. Individuals who have an ex- jobs may be automated, restructured, or offshored. As a
tended period of unemployment also are likely to face salary consequence, workers are increasingly faced with pressure
losses even if they secure reemployment; as Kroft et al. to “job hop” or innovate to advance in their careers, and
noted, individuals without work negotiate from a position of they may be pressed into alternative work arrangements that
weakness and oftentimes must accept lower compensation satisfy fewer psychological needs.
packages. Technology. Although automation and other techno-
Gaps in employment law. Systemic barriers to em- logical advances have the potential to make work safer and
ployment and reemployment are even more daunting among healthier in some industries, they introduce threats to stable
disadvantaged groups that lack legal protections (Myors et employment. Historically, these threats have been limited to
al., 2008). For example, in the United States, there is no unskilled laborers in blue collar industries, such as manu-
comprehensive federal protection against discrimination on facturing, in which robotic technology can easily replace
the basis of sexual orientation and gender identity. Because physical labor. Analyses in these industrial settings indicate
overt discrimination against Lesbian, Gay, Bisexual, Trans- that the introduction of robotic labor lowers local employ-
gender, and Queer (LGBTQ⫹) individuals is legally per- ment rates and wages for those who remain employed; a
missible in some U.S. states (Pomeranz, 2018), research study of U.S. labor markets from 1990 to 2007 found that
indicates that LGBTQ⫹ individuals report challenges when the acquisition of one new industrial robot coincided with
seeking employment, wage gaps exist between salaries of an average elimination of 5.6 jobs (Acemoglu & Restrepo,
heterosexual employees and their gay and lesbian col- 2017).
leagues, and prospective applicants portrayed as gay men Advances in computer technology, telecommunication,
are less likely to be offered an invitation to interview than and artificial intelligence (AI) also endanger work in pro-
applicants portrayed as heterosexual men (e.g., Tilcsik, fessional industries that were once thought safe from auto-
2011). Critically, however, experimental research shows mation. For example, sophisticated tasks can now be per-
that hiring discrimination toward gay and lesbian applicants formed by computers rather than trained professionals, and
is reduced in localities with antidiscrimination ordinances advances in AI are posed to disrupt industries such as health
(Barron & Hebl, 2013). care, education, transportation, and marketing (Susskind &
Globally, some of the most significant gaps in employ- Susskind, 2016). Although there is disagreement among
ment protections concern vulnerable migrant workers, who experts on the degree of threat that these advancements pose
are individuals who have relocated to another country to to human employment (e.g., Agrawal, Gans, & Goldfarb,
pursue work, usually in response to perceived opportunities 2016), a widening number of professions are vulnerable to
for income that are not available in their countries of origin disruption in ways that threaten people’s fiscal security. For
(Strauss & McGrath, 2017). Migrant workers typically be- example, Berriman and Hawksworth (2017) recently esti-
come employed in precarious, low-wage, and low-skilled mated that automation will claim a significant proportion of
jobs such as agricultural, domestic care, or construction existing jobs in the United Kingdom (30%), United States
work (Strauss & McGrath, 2017). These workers lack legal (38%), Germany (35%), and Japan (21%) by the early
protections in their host countries that leave them vulnerable 2030s. Although technological advancement may create
 WORK AND POVERTY 679

some new work opportunities, these are likely to be fewer in ing only modest numbers of traditional jobs for workers
number and to require highly advanced skills and knowl- (Mellow, 2017).
edge, consequently posing a greater threat to those who are As noted previously, one of the more complex global
unskilled and vulnerable to job loss. trends concerning work and poverty is the flow of immi-
Nontraditional employment arrangements. The re- grant and refugee workers across nations. Government pol-
duced need for traditional employees in modern organiza- icies on immigration and labor have considerable impact on
tions has fueled growth in alternative work arrangements, employment opportunities for both domestic and immigrant
particularly contingent labor and contracting within the gig workers. For example, the “Brexit” vote in the United
economy (Kalleberg & Dunn, 2016). Large organizations Kingdom has raised many questions about employment
that have historically offered more stable employment are opportunities for British workers in the European Union
increasingly relying on contingent or temporary labor, (EU), and for workers from other EU countries in the United
which saves personnel costs associated with full time hires Kingdom. Similarly, in the United States, there is consid-
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and allows organizations to carefully vet workers before erable debate concerning the expansion or retraction of the
This document is copyrighted by the American Psychological Association or one of its allied publishers.

offering a job with reliable salary and benefits (Dahling, H-1B visa program, which is the key mechanism by which
Winik, Schoepfer, & Chau, 2013). Taken to a more extreme skilled workers from other nations are able to be hired and
form, gig contracting through crowdsourcing (e.g., Amazon retained by U.S. organizations (Torres, 2017). Policy deci-
Mechanical Turk) or on-demand applications (e.g., Lyft) sions such as these can rapidly change the global employ-
relies on independent workers whose income is entirely ment landscape for workers and make decent work oppor-
contingent on the completion of piecemeal tasks (De Ste- tunities harder to find. The insecurities associated with such
fano, 2016). changes are challenging for all workers, and are likely to be
Although contingent and contract labor may offer some felt most acutely among migrant, refugee, and immigrant
opportunities to workers in the form of increased flexibility workers with limited resources.
and freedom to pursue novel career opportunities, contin-
gent workers are faced with lower and precarious compen- Suggested Avenues for Future Research, Practice,
sation, which limits their ability to reliably secure an ac- and Policy
ceptable standard of living (Kalleberg & Dunn, 2016;
Scholz, 2016). Not surprisingly, scholars have begun to
Research
examine the impacts of contingent work on workers’ well-
being. For example, contingent and temporary workers re- Because poverty has traditionally been understudied in
port heightened rates of mental health symptomatology and work psychology, many topics need dedicated attention.
prescriptions for psychotropic medications compared with Longitudinal processes are especially neglected despite the
workers with permanent contracts (Moscone, Tosetti, & inherently longitudinal process of losing and reacquiring
Vittadini, 2016). The shift toward contingent work is also work. Key longitudinal processes in need of further atten-
associated with a reduction in formal training opportunities; tion include the experience of economic scarring, implica-
recent corporate surveys indicate that only 21% of employ- tions of VU, and consequences of internalizing unemploy-
ees had been taught new skills through formal training in the ment as a part of the self-concept.
prior five years (D. Smith, 2012). Instead, organizations Research is also needed to better understand underem-
increasingly expect workers to fund their own development. ployment given the variety of conflicting ways that re-
Globalization. A final change that disrupts traditional searchers conceptualize this experience (e.g., Kalleberg,
employment opportunities is continued participation in the 2008). For example, some research views underemployment
global economy. Globalized business has created enormous in terms of mismatch between desired and actual work
wealth and opportunity in the United States and Europe, but status, whereas other studies construe underemployment as
it comes with costs to established patterns of work (Leon- being overqualified for one’s job. Future scholarship would
ardi & Bailey, 2017). Organizations continue to flexibly benefit from convergence on a definition and from research
move jobs and processes offshore in pursuit of cost savings. that explores its contributing factors, particularly among
Although outsourcing is perhaps most associated with the individuals who are members of disadvantaged groups (e.g.,
loss of manufacturing jobs to Asia and Latin America, low-wage workers, women, immigrants, and refugees).
technical and professional jobs also are outsourced (Leon- In addition, more research that examines the needs and
ardi & Bailey, 2017). However, economic development experiences of nontraditional working populations who are
across the world, and particularly in China, has contributed more likely to experience challenges with poverty and em-
to gradual but growing rates of reshoring, which involves ployment is needed (Gloss et al., 2017). To do so, research-
bringing jobs back that had previously been offshored. ers must move away from traditional convenience samples,
Although reshoring captures popular media attention, much which consist of individuals who are WEIRD (Western,
reshored industry relies heavily on automated labor, creat- Educated, Industrialized, Rich, and Democratic) and POSH
 680 THOMPSON AND DAHLING

(Professional, Official Job-Holders, Safe From Discrimina- participated in a control condition or a performance goal
tion, High-Income; Gloss et al., 2017). WEIRD and POSH orientation workshop focused on demonstrating compe-
samples are more likely to have the human and social tence.
capital to resist poverty and recover from job loss in ways Future directions for interventions. Psychologists are
that do not generalize to individuals with fewer resources encouraged to draw from career development theories in
and opportunities. For example, undocumented immigrants developing new interventions. For example, Thompson,
face challenges to secure and maintain employment, which Dahling, Chin, and Melloy (2017) highlighted some ways
have implications for the vocational development of their that program development could more closely target prox-
children in ways that are poorly understood (Yoshikawa, imal influences outlined in the career self-management
2011). model of social cognitive career theory (Lent & Brown,
2013) to assist with reemployment. They highlighted the
importance of strengthening individual’s ability to develop
Practice
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and maintain access to social support (e.g., social skills

This document is copyrighted by the American Psychological Association or one of its allied publishers.

Interventions directed toward assisting individuals who training, engagement in proactive behaviors), which can
are unemployed have most commonly targeted the intrap- buffer against job loss and provide access to job opportu-
ersonal, interpersonal, and environmental factors described nities. Community-based interventions designed to bolster
in Theme 2 as crucial to the job search and reemployment access to social capital and strengthen ties within social
process. Several programs demonstrate promising evidence networks may be useful for individuals who are from dis-
from which to build future intervention efforts. In addition, advantaged groups given that homogeneous social networks
a number of areas in need of focused attention for individual comprised predominately of people who are similarly strug-
career counseling and group programs exist. gling with job loss or recovery are not beneficial (Patacchini
Existing intervention programs. Meta-analyses reveal & Zenou, 2012).
that reemployment programs that emphasize mastery expe- Second, given the high rates of unemployment and un-
riences (i.e., “learning by doing”) and behavioral modeling deremployment around the world, it seems likely that ado-
are particularly effective at boosting job search self- lescents and young adults will be the generation of individ-
efficacy, proactivity, and career goal-setting (Liu, Huang, & uals most impacted by changes in the global economy.
Wang, 2014). Several established intervention programs Developing new primary prevention interventions directed
leverage these experiences to improve job seeking out- toward children with VU experiences is therefore important.
comes. One of the most successful and long-standing reem- Such interventions could target growth enhancement by
ployment interventions is the JOBS program developed by bolstering resilience, coping appraisal, and strengths-
Caplan, Vinokur, Price, and van Ryn (1989). JOBS focuses building (e.g., Afifi, Hutchinson, & Krouse, 2006; Nitzarim
on skill-building, augmenting coping strategies, enhancing & Thompson, 2017). Psychologists can draw from this work
social networks, and positive feedback from program facil- to develop and test the efficacy of individual and group
itators. Evaluation research indicates that JOBS participants interventions for youth.
were significantly more likely than those not in the program Another intervention need concerns survivors of down-
to obtain employment within 3 months (e.g., Brenninkmei- sizing in organizations who are likely to experience com-
jer & Blonk, 2012). plex strains despite their continued employment (Kivimäki,
Other successful interventions focus on constructive Vahtera, Elovainio, Pentti, & Virtanen, 2003). Survivors of
thoughts and goals to improve personal agency. For exam- downsizing usually must manage greater workloads and
ple, vocationally oriented cognitive– behavioral training complex emotional and attitudinal reactions (Kalimo, Taris,
(VO-CBT), is designed to bolster motivation and challenge & Schaufeli, 2003). These may include lowered profes-
negative thinking among participants who are unemployed sional efficacy and pessimistic outcome expectations, such
(Rose, Perz, & Harris, 2012). Components of the VO-CBT as anticipating the eventuality of job loss. Increasing aware-
program include increased learning opportunities (i.e., ness of such experiences within individual psychotherapy
hands-on activities, peer learning) and strategies to self- and creating group support for survivors is important given
regulate cognitions and behaviors. A related intervention the increased likelihood of job elimination related to auto-
developed in the Netherlands provides psychoeducation mation and reliance upon contingent contracts.
about how to develop proper learning goals in order to Lastly, individuals who are undergoing significant life
increase competence and mastery of new skills (Van Hooft transitions often experience a loss of economic and psycho-
& Noordzij, 2009). This workshop-based program demon- logical assets. For example, individuals who acquire dis-
strated beneficial outcomes among a group of unemployed abilities in adolescence and adulthood report lower self-
adults; participants reported higher job search intentions, efficacies across occupational domains, which may
more engagement in search behaviors, and higher likelihood compromise their reemployment efforts (Tenenbaum, By-
of reemployment compared with their counterparts who rne, & Dahling, 2014). Similar challenges are evident
 WORK AND POVERTY 681

among individuals transitioning out of the criminal justice poverty may similarly create unintended negative conse-
system and those transitioning from military to civilian life. quences. For example, some states have adopted “ban the
Many veterans experience unique challenges, including box” initiatives, which delay questions about an applicant’s
high rates of disability and trauma from their military ser- criminal history until after applicants have had an opportu-
vice (Stein-McCormick, Osborn, Hayden, & Van Hoose, nity to demonstrate their qualifications and job fit. Although
2013). More work is needed to design primary prevention these initiatives improve employment outcomes for individ-
interventions to augment individuals’ ability to adapt to life uals with criminal records who otherwise may be screened
transitions, and secondary group prevention programming out of consideration early, data suggests they also may
that builds resilience, social support, and competency. inadvertently worsen discrimination toward African Amer-
ican and Latino men without criminal records. This out-
Policy come is theorized to occur because some employers who
cannot directly inquire about criminal history instead apply
This article is intended solely for the personal use of the individual user and is not to be disseminated broadly.

We encourage psychologists to understand and advocate aversive stereotypes and use race as a proxy for criminal
This document is copyrighted by the American Psychological Association or one of its allied publishers.

for the expansion of public policies that support individuals history (Stacy & Cohen, 2017).
who are struggling to find decent work and financial secu- In combination, psychologists can apply their knowledge
rity. For example, globally, some countries have adopted and expertise in program development to help design and
universal basic income to promote financial security (Carr, evaluate social policies intended to assist individuals who
Parker, Arrowsmith, & Watters, 2016). In the United States, are struggling with income insecurity as a result of unem-
social welfare programs (e.g., Temporary Assistance to ployment and underemployment to secure decent work.
Needy Families; Medicaid), progressive taxation plans (e.g., Interested psychologists are encouraged to learn more by
Earned Income Tax Credit), income stabilization programs increasing their participation in workgroups and organiza-
(e.g., Social Security, unemployment benefits), pay-related tions that are devoting resources to alleviating poverty
legislation (e.g., Lilly Ledbetter Fair Pay Act of 2009, Raise through collaborative scholarship, volunteerism, and polit-
the Wage Act), and skill-building programs are designed to ical advocacy. On a broad level, the American Psycholog-
help create opportunities to escape poverty and reduce in-
ical Association (APA) has organized initiatives within the
equities. Psychologists should be aware of the resources
Office on Socioeconomic Status (http://www.apa.org/pi/ses/),
provided by these policies and programs so that they can
Federal Action Network (http://cqrcengage.com/apapolicy),
share them with clients who may benefit. Further, psychol-
and Public Interest Government Relations Office (http://apa
ogists are encouraged to publically advocate to protect these
.org/advocacy/socioeconomic-status/index.aspx). The APA
policies as well as to address their limitations (L. Smith,
also has committed resources to several employment-related
2015). In particular, several are structured in ways that
initiatives, such as funding training for psychologists to
disadvantage women (Bullock & Reppond, 2017). For ex-
better serve individuals who were unemployed, and offering
ample, social security benefits are calculated based upon the
Congressional briefings on unemployment discrimination
35 years in which an individual earns the most money,
thereby perpetuating income disparities stemming from the (http://apa.org/pi/ses/resources/indicator/2014/06/policy-
gender wage gap, and government programs frequently fail corner.aspx). Opportunities also are evident within specific
to account for engagement in caretaking or part-time labor. divisions. As an example, the Society for the Psychological
In addition, full-time employment in a minimum wage job Study of Social Issues issued a policy statement on the
does not guarantee that an individual with a child can move consequences of unemployment (Belle & Bullock, 2010),
above the poverty threshold (L. Smith, 2015). We echo and the Poverty Research Group within the Society for I/O
Bullock and Reppond’s (2017) suggestions that psycholo- Psychology sponsors Project INCUBATE (http://siop.org/
gists use their expertise to advocate for stronger and com- Prosocial/Incubate.aspx) to develop and support poverty-
prehensive policies that recognize a wider scope of work related programs and research.
contributions, strengthen unemployment benefits for part- Outside of the APA, the Global Organization for Human-
time workers, and expand welfare benefits. itarian Work Psychology (GOHWP; http://gohwp.org/) is
Psychologists also have an important role in evaluating an important point of coordination for students and profes-
the impact of supportive policies, which may have unantic- sionals who are interested in getting involved in supporting
ipated harmful consequences. For example, a well- research and interventions to promote decent work. For
intentioned program in New York City that rehoused fam- example, GOHWP initiated Project GLOW (Global Living
ilies who were homeless had the unexpected detrimental Organizational Wage) to best determine and set living
consequence of cutting families off from their established wages that allow people to maintain high-quality work and
local social and work networks and support (Toohey, Shinn, nonwork lives (Carr et al., 2016). GOHWP also maintains a
& Weitzman, 2004). Other recent research suggests that bibliography of publications for psychologists who are in-
policies intended to help ex-felons find work and escape terested in learning more about this area of study.
 682 THOMPSON AND DAHLING

Conclusion Bureau of Labor Statistics. (2017b, August). The employment situation:

July 2017. Retrieved from https://www.bls.gov/news.release/archives/
Poverty has historically been a neglected issue within the empsit_09012017.pdf
domains of work psychology, but it is clear that work Caplan, R. D., Vinokur, A. D., Price, R. H., & van Ryn, M. (1989). Job
psychologists have much to offer in the battle to alleviate seeking, reemployment, and mental health: A randomized field experi-
ment in coping with job loss. Journal of Applied Psychology, 74,
poverty. Impending disruptions to the nature of work make 759 –769. http://dx.doi.org/10.1037/0021-9010.74.5.759
the experience of unemployment and income insecurity Carr, S. C., Parker, J., Arrowsmith, J., & Watters, P. A. (2016). The living
increasingly likely for many people, and it will be critical wage: Theoretical integration and an applied research agenda. Interna-
that psychologists organize to leverage skills and knowl- tional Labour Review, 155, 1–24. http://dx.doi.org/10.1111/j.1564-913X
edge to support those in need. We hope this review moti- .2015.00029.x
Christoffersen, M. N. (1994). A follow-up study of long-term effects of
vates more work psychologists to pursue these topics in
unemployment on children: Loss of self-esteem and self-destructive
their research, practice, and policy initiatives. behavior among adolescents. Childhood: A Global Journal of Child
This article is intended solely for the personal use of the individual user and is not to be disseminated broadly.

Research, 2, 212–220. http://dx.doi.org/10.1177/090756829400200405

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Côté, S., Saks, A. M., & Zikic, J. (2006). Trait affect and job search
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