Low-wage workers are more diverse than you think

In his 2014 State of the Union address, President Obama called on Congress to “give American a raise” by increasing the federal minimum wage. For the second year in a row he argued “that in the wealthiest nation on earth, no one who works full time should have to live in poverty”. Even with the presidential priority of raising the Federal minimum wage, the 2014 House bill was voted down. In spite of this, many states and cities have opted to raise the basic hourly wage independent of the federal government.

Raising the minimum wage will impact employers and employees alike, and through them the larger society. While fewer than three percent of US workers* earn the minimum wage (or less), 18 percent earn less than $10.10/hour (the amount proposed by the President).  Understanding how an increased minimum wage will affect individuals first requires examining common arguments about low-wage workers.

Family Matters

About a year ago, the Demographics Research Group released a report entitled The Virginia Poverty Measure: An Alternative Poverty Measure for the Commonwealth.  In the coming weeks, we’ll be revisiting this topic with another report, this time focusing on Virginia children living in economic insecurity.

One of the most fundamental things that distinguishes the Virginia Poverty Measure (VPM) from the Official Poverty Measure is who “counts” as part of a family unit.  While applying a different definition of the family unit is only one aspect of improving the measure of economic (in)security, it is an important change because it lays the groundwork for an accurate account of income and expenses.

The official poverty rate is calculated by the Census Bureau using income limits applied to families depending on number and age of family members.  Larger families have higher income limits–“poverty thresholds”–than do smaller families.  Families headed by adults over the age of 65 years have lower income limits than families headed by younger adults.  According to the Census Bureau, a family is one or more people living together and related by birth, adoption, or marriage.

To understand why broadening the definition of family unit sets up a more accurate measure of economic (in)security, consider the following situations that arise under the Official Poverty Measure:

Tax Day Round-Up

 

As we all know, today marks one of the clearest-cut deadlines of the year: Our Federal income taxes are due. (And, if you didn’t know, you’ve got until midnight.) Yes, the IRS does grant extensions, making it more generous than many teachers I know. But, for most of us, today is it.

According to Virginia Senator Mark Warner, “Our taxpayers deserve to know how their federal funds are spent–dollar for dollar–and it is the government’s obligation to share that information in a clear, accessible way.” Acting on this conviction, Senator Warner has sponsored the Senate’s Digital Accountability and Transparency (DATA) Act along with Republican Ohio Senator Rob Portman. According to the Committee on Oversight & Government Reform, this bi-partisan bill “[allows] taxpayers to trace every dollar spent by federal agencies and help lawmakers more easily identify fraud, waste and abuse to create a more efficient government.”

A previous version of this bill passed the House with strong bipartisan support in November, and an amended version was unanimously passed by the Senate on April 10. It is projected that this updated bill will soon pass through the House, and come to the president later this spring for his approval or veto.

Under the DATA Act, taxpayers will be able to access checkbook-level data on Federal payments. Big Data–a phrase likely to conjure concerns over privacy, and often misunderstood–can help as we attempt to hold our government to higher standards of accountability.

On a day like Tax Day, though, there are plenty of other fun ways to use data, and data visualizations, to understand more about one of the two certainties in life. Here are some online resources on taxes in the US:

The Farm Bill’s odd couple: SNAP and agriculture

In January, I spent some time discussing SNAP in Virginia here and here; at the time, there was a lot of hypothesizing about what kinds of changes were in store for the program.

In early February, the Farm Bill was passed by Congress and signed into law by President Obama. This bill reauthorized Federal funding to the SNAP program, and included an estimated funding reduction of about $8 billion that is projected to influence hundreds of thousands of SNAP recipients.  Virginia remained almost entirely unaffected by changes to the program, as did many other states.  For details about the changes the Agriculture Act of 2014 made to SNAP, check out this article, or this synopsis of the Farm Bill conference agreement.

Maybe you’re not all that interested in the outcome, or maybe you’re the type to review the summaries, ponder the formal text of the final act, or even pore over helpful timelines to figure it out.  Either way, you might still be wondering: why are food stamps included in an agriculture bill, in the first place?

Official Poverty Estimates, in the US and the Commonwealth

This past weekend, The New York Times published an interactive map visualizing recently released Census data on poverty in America.  The NYT map gives information down to the census tract level; this level of precision allows the viewer to see poverty rates of not just counties and cities but, in fact, neighborhoods.

As for Virginia, poverty rates in Southwest, Southside and Hampton Roads far exceed the poverty rates of localities closer to DC.  According to these small area estimates, Falls Church County has the lowest poverty rate of around 3 percent, while Radford City and Harrisonburg City have the highest rates (34.2 and 37.5 percent, respectively).

Breadwinner Moms in Virginia: A closer look at unmarried mothers

As mentioned in a previous post, much of the research and conversation about “breadwinning” mothers simplistically distinguishes between only two groups: married and unmarried mothers.  But there is a third group that is often not considered—women who are unmarried, but living with a partner.

Non-marital cohabitation is on the rise in the United States:  In 2009, the number of 30-44 year olds living in an unmarried (heterosexual) partnership was almost double what it was in the mid-1990s.  To more fully understand the economic status of Virginia’s mothers—to make the “breadwinning moms” story more precise—it is important to take a look at this third group.

In this post, “cohabiting mother” means any unmarried woman living with at least one of her minor children as well as a partner of either sex, while the term “solo” mother indicates unmarried mothers living without a partner.  I was able to identify this population of cohabiting Virginia mothers using data from the 2011 American Community Survey.*

 

Cohabiting mothers in Virginia

Cohabiting mothers represent about 4 percent of all Virginia mothers, and about 16 percent of unmarried mothers.   While this population is relatively small, it is worthy of notice for several reasons.

“Breadwinner” Moms in Virginia

“A record 40% of all households with children under the age of 18 include mothers who are either the sole or primary source of income for the family.” – Executive Summary, “Breadwinner Moms”

“Breadwinner Moms,” a recently released report from Pew Social & Demographic Trends, suggests, on its face, that gender equality in the labor force is perhaps closer than advocates for women’s rights would have us believe. The authors note that, as of 2011, “a record 40%” of households with children had mom as the primary breadwinner, up from 11% in 1960. There are a number of large-scale social and economic issues reflected in these seemingly straightforward numbers—changing household structures and trends in family formation; increasing female participation in higher education and the labor force; rising costs of living and stagnant wage growth that necessitate multiple earners within a family; and the lingering effects of the recession on labor market participation.

Moving beyond the initial “40%” number shows that there are really two populations being discussed: (1) single mother families and (2) married couple families in which the wife earns more than her husband. Using the term “breadwinner” with respect to women in single-mother families belies the economic realities of their situation. Single moms are the only potential earners in the family; many earn low (or no) wages and rely on public assistance to get by. This topic will be explored in greater depth in Virginia by Annie in our next blog post.

Discussions of the second population, married couples with “breadwinning” wives, gloss over problematic economic issues underpinning this shift, such as the disproportionate impact of the recession in male-dominated industries like construction and manufacturing. While two earner families may create new challenges at home, such as negotiating child care and housework, and yield divergent opinions on what’s best for children, they also reflect a basic economic reality for many American families: one income is not enough. I was also troubled by the use of the term “breadwinner”—traditionally used to describe a household in which a single earner is able to support the entire family unit—to describe two earner households in which one partner is earning more than the other. Moreover, the wage gap between husbands and wives was never made clear; how much more are these “breadwinning” moms actually earning compared to their husbands? Let’s take a quick look at the 2011 American Community Survey data for Virginia.

Regional Cost of Living Adjustments for Poverty Rates in Virginia

Common sense tells us that the cost of goods and services are different in different parts of the country.  For instance, the economic reality and expenditures of families living in Northern Virginia are not the same as those living in Lynchburg or those living in Wise County.  The cost of housing and rent is particularly variable, but other basics such as food or transportation are surprisingly different across Virginia’s regions as well.

Despite common sense, official poverty rates do not account for this variability.  The income threshold for poverty for a family living in New York City is the same for a similar family living in Fargo, North Dakota.  More disturbingly, billions of dollars of government benefits and services are distributed to localities and families based on the official poverty measure.  Other public and private organizations also use the official statistics to target their operations.

With so much at stake, a new poverty measure that addresses regional differences in the cost of living is needed.  The Census Bureau has recently developed the Supplemental Poverty Measure (or SPM) to do this at the national level, but states and localities are at a disadvantage.  Only 3-year SPM averages are available for states and none are available at the sub-state level.

Virginia, however, now has a new alternative poverty measure that accounts for regional differences in the cost of living and provides sub-state estimates of poverty rates.  As elaborated in my previous post, the new “Virginia Poverty Measure” (VPM) provides some interesting insights about economic distress in the commonwealth, but perhaps the most striking results are the result of its regional adjustments.