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Study: Nearly 120,000 working families in Iowa can’t make ends meet


The Iowa Policy Project has issued a report saying nearly 120,000 working households in Iowa don’t make enough money to support even a basic standard of living without public support beyond health insurance. 

“One in five working households in our state cannot make ends meet on their earnings alone. For single parents, the numbers are even more daunting: Three in five families headed by a single working parent do not earn enough to meet a no-frills, basic-needs budget in Iowa,” said Peter Fisher, IPP research director and co-author of “The Cost of Living in Iowa.”

Fisher and IPP research associate Natalie Veldhouse found that single parents and families of color face the tightest budgets. 

“These results underscore two serious realities with implications for public policy,” Veldhouse said. “First, our minimum wage is too low and other pay standards, such as those that could be linked to public subsidies of private employers, are too low. And second, because so many cannot make it on their earnings, work supports — such as stronger access to child care assistance — are even more important.”

The report details how much working families must earn in order to meet their basic needs. IPP said the report shows that public work support programs are a big deal for many Iowa families. 

Single Iowans need to make $13 per hour in a full-time job to meet a basic budget. A single parent of one child needs to make $19.50 per hour. If that person has two kids, $22.41. 

A married couple with two or three children each need to make above $15 an hour to meet their needs without public support.

Key findings: 
– One in five working households, or about 120,000 households with 300,000 Iowans, cannot make ends meet on their earnings alone.
– Single-parent families face a far greater challenge — more than 60%, or 3 in 5 — do not make a family-sustaining wage.
– Nearly 50% of African American-headed working households and 43% of Hispanic-headed working households had incomes below a self-sufficiency level, compared with about 18% of white working households.
– In general, rural areas face a greater challenge than urban and suburban areas of the state, though the city of Des Moines has the greatest share — nearly 28% — of working families who couldn’t pay their bills. 
– The state minimum wage is not high enough to support basic budgets, and in some cases neither is the median wage. 
– The average gap between earnings and a basic-needs income ranges from about $8,000 to $17,000 per year.

“Public policies shape the disparities we have,” Veldhouse said. “The racial wage gap is only one of many. We also need to address segregation in employment, discriminatory housing policies and the weakened job market, particularly in union manufacturing jobs.”

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