| 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Foundation for Women, show that the Census Bureau poverty definition is out
of date.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
www.raisethefloor.org.
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