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Pay Falls Short for Almost One in Four Iowa Families — 

May 21, 2012

CONTACT: Lily French at lfrench@iowapolicyproject.org


Pay Falls Short for Almost One in Four Iowa Families

IOWA CITY, Iowa  — A new report recommends that Iowa expand existing work supports to close a demonstrated gap between low Iowa wages and what is necessary to support a basic, frugal family budget.

“The need for improvement is particularly acute for the three-fourths of single-parent families who work but are not paid enough to get by,” said Lily French, research associate for the nonpartisan Iowa Policy Project (IPP) and co-author of the organization's latest look at “The Cost of Living in Iowa.”

“It is clear that work supports, such as the Earned Income Tax Credit, state child care assistance and public health insurance, are critical to many Iowa working families and could help more if they were expanded. Instead, improvements have been rejected or even the existing supports threatened,” French said.

Also important, the report said, would be state-sponsored housing assistance and improved wage and benefit standards in economic development programs.

The report found that, overall, 23 percent of non-elderly working families in Iowa have incomes below a basic-needs budget that the authors calculated. By type of family, the proportion with earnings falling below basic needs ranged from 74 percent of single parents, to 23 percent of married couples with children under 18, to 12 percent of married couples without children.

Researchers also demonstrated, by region, selected metropolitan areas and by county, what earnings various family types need to live in a given area without assistance.

The study builds family budgets reflecting a "frugal" living standard, allowing for housing, utilities, food, child care, health care, transportation, clothing and other necessities — but nothing for education, skill training, gifts, entertainment, restaurant meals or savings, including retirement.

In Linn County, for example, a married couple with two kids and both parents working must make $4,331 per month to support basic family expenses, while it takes $3,897 to do the same in Calhoun County and $4,119 in Taylor County. The online version of the report includes a clickable map so that viewers may see the table calculated for the selected county.

“This information should be useful to policy makers and advocates because federal poverty guidelines are outdated. This analysis provides a much better and localized picture of what it takes in various parts of Iowa to make ends meet, for different family types,” IPP Research Director Peter Fisher said.

Specific policy recommendations in the report:

  • For Child Care Assistance, raise income eligibility to 200 percent of the federal poverty guideline.
  • Increase the state Earned Income Tax Credit from seven percent to 30 percent of the federal credit.
  • Increase Medicaid eligibility to 150 percent of poverty-level income and allow working single adults to qualify.
  • Develop a state-sponsored housing assistance program.
  • Raise wage and benefit standards for economic development programs.

The Iowa Policy Project is a nonpartisan, nonprofit public policy research organization based in Iowa City. Reports are at www.iowapolicyproject.org.

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To read the full report click here.

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