The Cost of Living in Iowa — 2014 Edition
1 in 6 Iowa Families Struggle to Meet Basic Needs
Tougher Challenges Seen for Single Parents — Cost of Living in Iowa

FOR IMMEDIATE RELEASE WEDNESDAY, April 9, 2014

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This news release



IOWA CITY, Iowa (April 9, 2014) — Thousands of Iowa families do not earn enough to provide for a basic standard of living without public supports, despite one or more wage earners in the family.

A new report from the nonpartisan Iowa Policy Project (IPP) finds that 16.7 percent of Iowa households do not have earnings that meet a no-frills, basic-needs budget without supports such as child care assistance, food assistance and health care subsidies.

“About 1 in 6 households in the state — and 3 of 5 single-parent families — need to earn more just to pay the most basic bills,” said Peter Fisher, IPP research director and co-author of the report with Lily French.

“No one discussing issues such as the minimum wage, and eligibility for child-care assistance, can reasonably ignore the economic realities facing these families.”

French agreed. “Expenses grow, and earnings don't keep up,” she said.

The report is the second in three installments of IPP’s “Cost of Living in Iowa” analysis for 2014. The first part, released last month and available at www.iowapolicyproject.org, shows typical family budgets for various family sizes and composition in Iowa. Those budgets are used with Census data in this latest analysis to determine impacts on Iowa families.

The report looks at four kinds of households: single persons living alone, married couples without children living at home, married couples with children under 19 living at home, and single parents with one or more children at home.

French noted the disparity for single parents. The report found that 59.1 percent of single-parent households are below the "break-even" level for basic needs.

“Almost half of those single-parent families -- 28.7 percent overall -- earn less than half of the break-even level. In other words, those families would need to double their current earnings to break even,” French said.

The proportion of below-break-even households does not vary greatly by region of the state.

However, the eight counties of central Iowa have a somewhat lower share, and the non-metropolitan counties in the southern third of the state have a significantly higher share of families below break-even: nearly 20 percent.

In sheer numbers, at least 100,000 households in the state do not earn enough to cover a basic family budget, with an average shortfall of $14,274 (margin of error of plus or minus $621).

“Clearly work alone does not produce sufficient income to meet the basic needs of a large number of Iowa families,” Fisher said.

The third installment in the series will examine a range of programs and the role they play in filling the income gaps identified in the latest report.

The Iowa Policy Project is a nonpartisan, nonprofit public policy research organization based in Iowa City. Reports are at www.iowapolicyproject.org.

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The final installment of this 2014 report will focus more closely on work supports and how they affect basic family budgets in various regions of Iowa. A preliminary version of this part of the analysis, illustrating "cliff effects" in the Child Care Assistance program, was released in December and is available on the IPP website here: http://www.iowafiscal.org/like-falling-off-a-cliff/.