Common Good Iowa

Cost of Living in Iowa

What does it take to get by these days? This seventh edition of The Cost of Living in Iowa answers this question, and connects the answer to public policy choices that are in the hands of state and federal lawmakers. 

Basic family budgets

The first installment focuses on what Iowans must earn — a living wage, in any county, for 10 family types — to meet a family-supporting, basic-needs household budget. The hourly wage estimate is one that would provide after-tax income sufficient to meet basic needs for a full-time worker. For the first time, both the budgets and the living wage information are available for all 99 counties.

The report then turns to the analysis of how many Iowa working households earn enough to actually meet a basic-needs budget (about 1 in 5 overall). This varies by family type — fully 3 in 5 single-parent working families fall short of basic needs on their earnings. These estimates had been provided in a separate report in previous years.

A recurring theme emerges: The federal poverty guidelines fall woefully short in measuring poverty, if the goal is to show what income is presumed to be enough to help a family get by. Depending on the family type, the basic-needs, self-sufficiency household budget needs to be two to three times higher than what the poverty guidelines claim.

Work supports

The second installment identifies a major problems in how work-support programs work — or do not work — for families to make those ends meet. As a person earns more, these work supports are reduced, which makes sense. But most work support programs fall to zero well before a family earns enough to be able to meet basic needs on their own.

The report focuses on a set of “work support” policies that help low-wage working families survive and keep their children out of poverty, and that provide a stepping stone to a better education and a better job:

  • Reform Iowa’s Child Care Assistance (CCA) program to eliminate a huge disincentive called the cliff and to make CCA more effective as a help to parents trying to improve their skills and raise their wage level.

  • Expand the Earned Income Tax Credit to provide even stronger support to low-wage workers, encourage more work effort, and keep children out of poverty.

  • Expand the Child and Dependent Care Tax Credit to cushion the loss of Child Care Assistance.

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