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 Cost of Living in Iowa," released today by the nonpartisan Iowa Policy Project, found that 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.
The study builds family budgets reflecting "frugal" living standards, allowing for housing, utilities, food, child care, health care, transportation, clothing and other necessities but does not include money used for education, skill training, gifts, entertainment, restaurant meals or savings, including retirement.
In Jasper County, the report found that a married couple with two children and both parents working would need to earn $4,363 a month, or approximately $52,000 a year, to support basic family expenses. A single parent in Jasper County would need to earn $3,629 a month, or about $43,500 a year, the report states.
The report makes a number of specific policy recommendations, including:
- For child care assistance, raise income eligibility to 200 percent of the federal poverty guideline.
- Increase the Earned Income Tax Credit from 7 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 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, an IPP research associate and co-author of the report. "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 existing supports threatened."
County-by-county cost of living amounts can be found here.