The number of working Iowa families who face difficulty in paying bills without public assistance has ticked upward since last year, the Iowa Policy Project found.
In its 2019 Cost of Living in Iowa report, released Tuesday, the not-for-profit determined that nearly 120,000, or one-fifth, of state households, encompassing 300,000 people, struggle to meet basic needs with just their current earnings.
Those findings mark a jump from 2018, when the organization reported that nearly 100,000, or one-sixth, of Iowa working households — 227,000 people — could not meet basic needs.
The increases reflect more recent data used in analysis, including from a new federal transportation survey that refreshed the previous seven-year-old figures, said Peter Fisher, Iowa Policy Project research director.
Also factored in were an approximate 3 percent increase in rents from 2018 and rising health care costs, he said.
People are also reading…
“Our report is especially timely because the federal government will be releasing new state-level poverty data this week,” Fisher said in a release Tuesday. “Our research has repeatedly shown how severely the federal poverty guidelines understate a real-life poverty level for Iowa households.”
Those guidelines, developed in the 1960s, don’t account for regional differences in basic living expenses and assume that food still is the largest expense for families, consuming one-third of the household income, the report said.
On the whole, families earn an average $8,000 to $17,000 less per year than what a basic-needs income would provide, the report says.
The report also determined that 62.8 percent of the state’s 105,000 single-parent families fall short of a sustainable wage, up slightly from 62.1 percent last year — which could be chalked up to the families’ single incomes and the cost or unavailability of child care, research associate Natalie Veldhouse said.
The not-for-profit also found significant racial disparities, including that 49.8 percent of black households and 43 percent of Hispanic households had incomes below the self-sustainability threshold, compared to 17.7 percent of white households.
The white households still composed 88 percent of all households under the self-sufficiency line.
Among the solutions Iowa lawmakers could pursue in helping families struggling to make ends meet include raising the state’s minimum wage and ensuring it increases along with inflation, strengthening collective bargaining, pushing for fair housing and investing in education, Veldhouse said.
The Iowa Policy Project put together its household budget estimates based on a “very frugal living standard,” including expenses such as utilities, food prepared at home, child care and transportation, but not unessential items such as savings, loan payments, entertainment or travel.
