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News :: Miscellaneous |
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Census Bureau Poverty Thresholds Too Low |
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by Ms. Foundation for Women
(No verified email address) |
27 Sep 2001
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New Minimum Needs Budget Shows It Takes $8 An Hour To Make Ends Meet |
NEW YORK - September 25 - According to Census Bureau reports released today more than one out of ten Americans and one out of six children lived in poverty in 2000, at the height of the economic boom. Minimum Needs Budgets presented in RAISE THE FLOOR: WAGES AND POLICIES THAT WORK FOR ALL OF US, a new book published by the Ms. Foundation for Women, show that the Census Bureau poverty definition is out of date.
Millions of Americans above the poverty line live in households where paying the rent means going without health care and paying for child care means regularly skipping meals. American families need more than double the federal poverty threshold to make ends meet.
The federal poverty thresholds were adopted in the 1960s using a poverty formula based on US Department of Agriculture estimates of the cost of a minimum family diet (now called the Thrifty Food Plan) multiplied by three because families spent about one-third of their income on food. The USDA warned that the plan was meant only for "temporary or emergency use when funds are low" and stressed that "the cost of this plan is not a reasonable measure of basic money needs for a good diet."
Today, food costs one-seventh of total average household expenditures, and one-sixth of expenditures for households in the lowest 20% of income--not one-third. The poverty thresholds are adjusted for inflation, but they have not been updated to reflect, for example, that basic needs such as housing and medical care costs have increased more rapidly than food costs. Just updating the multiplier to reflect current expenditures would double the official poverty threshold. Moreover, the official poverty measure ignores changes in family needs such as greater child care and transportation costs due to women's increased labor force participation, for example.
The Minimum Needs Budgets presented in RAISE THE FLOOR, by Holly Sklar, Laryssa Mykyta and Susan Wefald, show what individuals and families need nationally to meet minimal housing, food, health care, child care, transportation, household and personal expenses, and pay federal, state and payroll taxes, factoring in tax credits such as the Earned Income Credit. The chart below compares the Census Bureau poverty thresholds with the Minimum Needs Budgets (updated to 2000) for working households who do not have employment-based health insurance, which is the reality for most low-income households.
Household...............Minimum Needs Budget....Census Poverty Threshold
Single adult.............$17,105.............................$8,959
Two adult..................24,313..............................11,531
1 parent, 1 child........29,764..............................11,869
1 parent, 2 children...34,108..............................13,874
2 parent, 1 child........32,306..............................13,861
2 parent, 2 children...36,835..............................17,463
Most Americans believe that a full-time job should keep you out of poverty. But at $10,712 a year, a full-time minimum wage job keeps many Americans below the government's official poverty line and well below more realistic minimum needs budgets. A mom and dad with two children would have to work a combined 3.3 full-time minimum wage jobs to make ends meet. That's 132 hours a week. Minimum wage workers earn 35 percent less than their counterparts did in 1968--adjusting for inflation.
"It's time for us to adjust both the official poverty measure and the minimum wage to reflect today's cost of living," says Susan Wefald, coauthor of Raise The Floor and director of Institutional Planning at the Ms. Foundation. "As we reassess government spending in the wake of the September 11 attacks and formulate an economic stimulus package, let's serve our national security needs while also addressing the economic insecurity hurting our poorest Americans."
RAISE THE FLOOR recommends raising the minimum wage to $8. That's what a single worker needs to meet their minimum needs working full time. That's what it takes just to match the minimum wage of 1968, adjusting for inflation. RAISE THE FLOOR spotlights businesses, large and small, that demonstrate how good wages are good business in good economic times and bad.
RAISE THE FLOOR also shows how we can supplement a higher minimum wage with improved child care, health care, housing and Earned Income Tax Credit policies, and other practical measures to reduce poverty and its harmful consequences, and get our economy moving again.
Please call or write for a press copy of RAISE THE FLOOR: WAGES AND POLICIES THAT WORK FOR ALL OF US. Additional information is available on the web at: |
See also:
http://www.raisethefloor.org
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