Let Them Eat Cake
What IS poverty, anyway? Well that’s a stupid question, isn’t it? Everybody knows what poverty is—if you’re at or below poverty, you have a tough time making ends meet. It’s a government-defined threshold of income; if you’re below the poverty level, you can’t really meet all your basic needs.
If you’re a single person, that level in 2009 is $10,830. For a family of four it’s $22,050. Doesn’t seem like much, does it? According to the Cost of Living in Minnesota budget calculator, a no-frills basic needs budget for a single person in Minnesota is more like $25,000. For a family of four, $55,788. More than double the poverty level.
So who can live on $10,080 a year? Where did that magic figure come from? Well, the federal government sets the poverty level based on the costs of a no-frills food plan developed by the Dept. of Agriculture. One can quibble over whether the food plan is adequate. (Most, even the developer of the threshold, would quibble that it’s not. For those of you interested in the detail, here is a fascinating report.)
To calculate the poverty threshold, they take the cost of this basic food plan (updated every year to take inflation into account), and multiply it times three, and there’s your poverty threshold. It’s multiplied by three because food accounted for about one-third of the average budget of a household of three or more people when this formula was developed (1963-1964).
Fast forward to 2009. Consumption patterns have changed. Housing and healthcare costs have grown substantially and take up a much larger portion of the average household budget than they did 40 years ago. Transportation costs have grown with commutes, and two-wage-earner households require childcare.
As a result of these kinds of changes, today food is more like 15% of the basic household budget. So what does that mean?
Let’s take the single person. One-third of $10,830 is $3,610. If we take that as our food need (based on the economic USDA plan) and apply the updated pattern (food as 15% of budget), the “poverty threshold” goes up to $24,066 a year. For a family of four, it goes up to $49,000.
There are a lot of debates about the poverty threshold and how it’s measured, but pretty much everyone agrees that it vastly underestimates how much is required for a minimally adequate standard of living.
I was at a restaurant recently and overheard a conversation from an individual talking about”those people” spending money on cell phone and cable television before buying their own health insurance. I began to think that some of these “electronic luxuries” are no longer frills. We need these tools to link to jobs, our bank accounts, our families, our world.
Indeed, healthcare costs have risen, child care is a necessity in today’s two-parent working families. I would challenge us to begin to think about how being wired into the internet via our phones and computers is a necessity as well in today’s world.
If the average cost of childcare is $11,000 per year, and half the jobs in Minnesota pay less than $22,500 per year, what is the incentive for some parents to work? The math is impossible. Imagine a single mother with two children who went back to school (through loans and scholarships) to get her nursing degree. I’m not sure what an entry level RN job pays these days, but I would imagine it just doesn’t add up. Not everyone has grandparents or neighbors willing to care for their children for free.
Actually, that $22,500 figure is for current job openings in the state. The median wage (half pay more, half pay less) for all jobs currently vacant in Minnesota is $11.00/hour, which at 40 hours a week gets you to about $22,500 annually. The median wage for Minnesotans in the workforce is $17.09/hour, which comes to about $35,500 annually.
About one-quarter of working Minnesotans earn $11.68/hour or less, putting their income well below $25,000. And 10% earn only $8.70/hour, which gives a full-time income of around $18,000. And just in case you think that doesn’t amount to much, 10% of Minnesota’s employed labor force is approximately 270,500 people.
But you won’t find many RNs in that group–their starting wages are around $24/hour and the median wage is $34/hour.