The Joseph Rowntree Foundation said the number of children in working families in poverty rose by 22,000 between 2003 and 2013.
Chief executive Julia Unwin said action to help pensioners was balanced by a "worrying rise" in working people struggling to "make ends meet".
The UK government said its plan for a national living wage would help people.
"Work is the best route out of poverty and employment in Wales is at record levels," a spokesman said.
A Welsh government spokesman added: "Despite recent improvements to the Welsh economy, we do, however, recognise in-work poverty is a growing issue and are working hard to support low-income households and deliver more well-paid jobs for the Welsh economy.
"We are helping more adults access full-time employment, supporting second-earners into work and are also improving people's skills to enable them to progress in the workplace."
People are classed as being in poverty if their household earns or receives less than 60% of the national average income of around Â£450 a week, adjusted for family size.

The tiny crustaceans are a naturally-occurring parasite that can cause disease and are responsible for many losses to wild and farmed fish stocks.
With resistance to chemical treatments rising, the Glasgow team has been looking at breeding resistance.
It has now come up with a new protocol to breed resistant fish and developed a mathematical model to predict outcomes.
Sea lice can cause skin lesions and increased susceptibility to infections by suppressing the host's immune system.
The parasite is estimated to cost the worldwide fish farming industry hundreds of millions of pounds a year.
Professor Michael Stear said: "Sea lice infection is a major threat to the health of farmed salmon and to the fish-farming economy.
"Our research has produced a practical tool for quantifying resistance to sea lice and shown that selection could substantially reduce the need for drug treatments.
"Selective breeding for sea lice resistance should reduce the impact of sea lice on fish health and thus greatly improve the sustainability of Atlantic salmon production."
The study outlining the Glasgow University model is published in the Royal Society journal Interface.
WWF Scotland director Lang Banks said: "There is no doubt that sea lice are a major problem for Scotland's salmon farming industry and that large amounts of chemicals are currently used to combat the problem.
"If we are to protect the wider environment, then finding ways to reduce the industry's reliance on chemicals is to be welcomed.
"However, as chemical use is only one of a number of environmental impacts from salmon farming, we need to see more farms sign up to the Aquaculture Stewardship Council's "responsible farming" labelling scheme, and pledge to operate more sustainably in all aspects of their operations."

29 June 2015 Last updated at 11:41 BST
Mr Richards, 19, from Wednesbury, was among 38 killed when a Tunisian student linked to Islamic State extremists opened fire on a beach in Sousse on Friday.
He was a Walsall FC fan, football referee and student at the University of Worcester.
Chief executive of the Birmingham County Football Association, Chad Ehlertsen, said "it just makes you smile every time you think about Joel."
"He was just a leader of young people; a good organiser, a good communicator and an extremely talented young referee," Mr Ehlertsen said.
Low pay and scarce hours are pushing working families and young people into poverty in Wales, a new report claims.
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Researchers at Glasgow University have developed a new way to protect farmed salmon from sea lice.
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One of the victims of the Tunisia beach attacks, Joel Richards, has been described as a leader of young people.