Cost of Living in Iowa

Working families lost ground in pandemic economy

Executive Summary

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By Sean Finn and Samantha Tamborski

The 9th Edition of the Cost of Living in Iowa reflects the strong economic shift of 2021-2022. Despite a resilient economy and the abundant resources of our state, far too many Iowa families work full time and still fall short of affording a basic-needs budget. This report explores the challenges faced by working households, the impact of historical injustices and the repercussions of the pandemic-era economy on household budgets.

Main Findings

• One in 6 full-time Iowa workers earns an income that falls short of a basic-needs budget.
  Despite encouraging wage gains the past couple of years, a significant portion of working households in Iowa still struggle to meet basic needs that have become even more expensive. The report reveals that over half of single-parent workers do not make enough income to cover a bare-bones budget.

• One-third of working Black and Latino families have insufficient incomes.
  Iowa’s economic disparities are further exacerbated by institutional racism, as evidenced by long-lasting practices like redlining and exclusions from labor protections. The report highlights the compounding effects of discriminatory policies on Black and brown Iowans that limit their economic opportunities.

• Household budgets get tighter from inflation while corporate profits soar.
  Household costs have surged due to the pandemic-induced inflation, particularly affecting child care, transportation and food. The average gap between household income and a basic-needs budget is substantial. Single-parent families face an annual deficit exceeding $20,000. While corporations raised prices and blamed it on the pandemic’s supply chain impacts, corporate profits hit an all-time high in 2022.[1]

• Public support programs help, but as currently structured aren’t enough to lift households above the basic-needs line.
  Programs that help low-wage families meet basic needs such as SNAP, Child Care Assistance and the Low-Income Energy Assistance Program are effective, but often fall short of fully filling the gap between families' low wages and the cost of a bare-bones budget. They also face challenges of bureaucratic complexity and in some cases low utilization rates. Stronger programs, tax credits, other initiatives to help families cover essentials, and long-term economic transformation are all necessary to achieve an economy in which every Iowan can thrive. 

Iowa has an economy in which the rich are getting richer and the poor are getting poorer. Lawmakers have the tools at their disposal to reform this economy to work for all Iowans. Doing so will require systemic changes. No one policy solution can address all of our problems, but we have the opportunity to enact many that are proven effective at boosting wages and better filling the gap between wages and what it takes to meet basic needs. It’s past time for state leaders to confront the economic realities of Iowa’s low-income families and take concrete actions to help them get ahead.

Wages increased steadily, but two years of high inflation leave families playing catch-up
Rate of growth in U.S. wages and inflation, January 2021 to April 2023

Source: Federal Reserve Bank of Atlanta and U.S. Department of Labor Bureau of Labor Statistics

This is the 9th Edition of the Cost of Living in Iowa, published in March 2024 by Common Good Iowa.

About the authors

Sean Finn is a Policy Analyst for Common Good Iowa, working primarily on labor and fiscal policy. He holds a Master of Applied Statistics from Loyola University Chicago.

Samantha Tamborski is Common Good Iowa’s policy intern for Summer and Fall 2023. She is pursuing a Master of Public Affairs from the University of Iowa and expects to graduate in May 2024.

About Common Good Iowa

Common Good Iowa’s team of policy advocates and analysts leverage reliable data, solid analysis and collaborative relationships to craft policy solutions to Iowa’s most pressing problems. Our vision is a state where children and families are healthy and secure, workers thrive, and clean air and water contribute to a healthy future for all.