Guest Opinion
How can Iowa afford not to update the state's work supports?
By Peter Fisher, Research Director

As published in the June 11, 2012, Iowa City Press-Citizen
PDF (2 pages)



Thank you to the Press-Citizen for reporting on the more accurate picture offered by the Iowa Policy Project of what constitutes poverty in our state and local community, and for drawing extra attention to this important analysis in last Monday’s “Our View.”

One point worth pursuing is the question the editorial raises: Can we soon afford the improvements in work supports IPP recommended?

Of course we can.

IPP’s “Cost of Living in Iowa” report recommends the following to address the gap between earnings and a basic-needs budget for nearly a quarter of Iowa families:

Child care assistance: Increase income eligibility to 200 percent of the federal poverty guideline from the current 145 percent.

State earned income tax credit: Increase to 30 percent of the federal credit from its current 7 percent.

Medicaid: Increase income eligibility to 150 percent of the federal poverty level (from about 82 percent for working parents of dependent children) and allow working single adults to qualify for assistance.

Housing assistance: Develop a state-sponsored housing assistance program to offset the significant burden of housing costs.

Raise wage and benefit standards in economic development programs.

These strategies help Iowans work their way toward self-sufficiency and make it less likely that children will be raised in poverty.

The EITC, for example, boosts earnings for families whose jobs do not provide self-sufficiency. With the education requirements rising for decent jobs, such programs can also make it feasible for adults with young children to advance their education while working part time in low-wage jobs.

Higher earnings means more spending in the local economy, boosting local business and, ultimately, tax revenues. At the same time, the EITC improves fairness in our tax system.

Iowa’s child care assistance program has long been lacking. Child care has become an enormous expense in working households. When child care is not affordable, the lack of access can hamper a parent’s ability to seek employment.

This is why child care assistance is a “work support.” When Iowans have jobs at the higher end of the low-wage scale (about $12 an hour) they can lose such assistance, dropping them below the ability to pay for basic needs. When they are working, we all benefit.

Keep in mind that while we raise these questions, very large, profitable multi-state firms are carting off over $40 million a year in state checks without paying a dime in state income tax. Iowa working families, even at or near poverty, pay more in income tax than those companies if they pay $1.

That is the real-world context of Iowa’s budgeting choices, leaving us not with a question of whether we can afford improvements in work supports, but rather: How can we afford not to make them?

peterfisherphoto

Peter S. Fisher
is research director of
the Iowa Policy Project
and co-author of
The Cost of Living in Iowa.

Contact: pfisher(at)iowapolicyproject.org.