Working Families Get Squeezed in Iowa
Iowa Fiscal Partnership
Report: One in Four Families in Iowa is Low-Income
IOWA
CITY – One in four Iowa families is low-income, earning less than
$36,784 for a family of four, according to a new national report.
“Work
should pay better than that,” said Elaine Ditsler, research associate
for the Iowa Policy Project (IPP), who noted other findings of the
report.
“When
one-third of Iowa children in working families are in low-income homes,
we should be concerned about addressing their needs. When almost half
of minority working families are low-income, how can anyone be
satisfied with that?”
The
report also found that working families face uneven income conditions
state-to-state, with Iowa ranking about in the middle on several
measures.
“Average is not good enough for Iowa,” Ditsler said.
The
report was conducted as part of the Working Poor Families Project,
supported by the Annie E. Casey, Ford, and Rockefeller foundations. The
report spotlights issues confronting low-income working families and
makes several recommendations to improve their economic standing.
Ditsler
reviewed the report for the Iowa Fiscal Partnership, a joint effort of
the IPP and the Child & Family Policy Center in Des Moines.
Ranking states from first (best) to 50th (worst), the report, “Working Hard, Falling Short,” found Iowa:
–Ranks
25th nationally in the percentage of working families that are low
income (1 in 4) and 19th on the percentage of children that live in
low-income working families. One out of 3 children in working families
lives in a low-income family.
–Ranks
37th in the percentage of minority working families that are
low-income. About 46.5 percent of all minority working families are
low-income.
–Ranks 26th in the percentage of state and local taxes paid by the lowest-earning 20 percent of families.
–Ranks
29th in the percentage of jobs paying below poverty threshold of
approximately $9.00 an hour. About 1 out of 4 jobs pays poverty-level
wages or less.
–Spends
36 cents of state dollars on need-based postsecondary aid for every $1
dollar of federal Pell Grant aid. This ranks 15th best in the country
but is less than one-half of what Illinois spends.
According
to the report, more than one-fourth, or 26.9 percent, of Iowa working
families had incomes categorized as low income in 2002 (less than 200
percent of poverty, or $36,784). This ranked Iowa sixth out of seven
states in its area (Iowa and the border states of Illinois, Minnesota,
Missouri, Nebraska, South Dakota and Wisconsin). Iowa ranked right in
the middle of all states on this measure, at 25th. Almost 1 out of 3
children in working families live in low-income families, ranking Iowa
19th among the 50 states.
In
addition, almost one-half, or 46.5 percent, of minority working
families in Iowa were low-income (ranking Iowa sixth out of seven
states in our area and 37th out of 50 states).
Ditsler
also noted the tax situation for working families. Iowa families
earning less than $14,000 annually pay 10.6 percent of their income in
state and local taxes.
“This
number is exceedingly high when you consider that families earning over
$250,000 annually pay only 7.9 percent of their income in those taxes,”
Ditsler said, noting Iowa ranks 26th on this measure.
Iowa’s
job quality also did not stand well vs. its upper Midwest neighbors.
Almost one-fourth, or 24.4 percent, of jobs in Iowa paid less than the
poverty threshold of $18,392 (about $9.00 per hour) in 2002. This was
worse than the national average and again placed Iowa sixth in the
seven-state group of Iowa and its bordering states.
“Iowa
fares well in a few categories compared to other states,” Ditsler said.
“Among those are the education level of our low-income working parents,
the percent of workers who are fully employed, and the health insurance
rates of parents in low-income families.”
“However,
education and full employment must translate into real dividends
through high paying jobs. As we’ve seen, Iowa has too many poverty-wage
jobs. And with more than a quarter of working families with an
uninsured parent, there is still much that Iowa can do to improve
there.”
“If
state revenue does not pick up substantially, then Iowa may soon go the
way of Texas, Nebraska, Mississippi, Missouri, Minnesota, and many
other states that have been forced to roll back eligibility for public
health insurance programs for the needy.”
The Iowa
Fiscal Partnership is a joint initiative of the Iowa Policy Project and
the Child & Family Policy Center, two nonprofit, nonpartisan
Iowa-based organizations that cooperate in analysis of tax policy and
budget issues facing Iowans. IFP reports are available on the web at http://www.iowafiscal.org.
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