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One-third of a Nation
It's startling, but one-third of families in America (32.3 percent) are getting by on less than $35,000 a year. Census Bureau
State by state, the proportion of families with incomes this low ranges from a low of 21 percent to a high of 45 percent. (See CHN table with all 50 states plus DC.)
- In Florida, more than 1.5 million families have incomes below $35,000 a year - 35 percent of all families in that state.
- Pennsylvania's families with incomes below $35,000 number nearly 980,000, or 31 percent.
- In West Virginia, nearly 45 percent of families (almost 220,000) have incomes less than $35,000. It is one of seven states in which more than 4 in 10 families have incomes this low.
How Easy is it to Make Ends Meet on less than $35,000?
Not very. Family size averages a little more than 3 people - for that average size, $35,000 is close to 200 percent of the federal poverty line. (The poverty line varies by family size. For 4 people in 2003, for example, the Census Bureau estimates an average poverty threshold of $18,810 (twice that is $37,620). For 3 people, the threshold is $14,680 (twice that is $29,360.) Some of the families in this group have incomes above the official poverty line, but trying to raise children on less than $35,000 can be a struggle.
- One-fifth of households with incomes below $50,000 lacked health insurance; even more in households with lower incomes (nearly one-quarter of those with incomes less than $25,000), did without health coverage.
- According to the National Survey of America's Families, more than half (51 percent) of families with children below 200 percent of the poverty line found it difficult to afford food at some point during 2001.
- Twenty-eight percent reported hardships paying for housing. Urban Institute
- Good quality child care costs typically range from $4,000 to $10,000 a year. Children's Defense Fund
- Only 23 percent of low-income workers (with earnings in the bottom quarter) have any paid sick leave, and only one in ten of them has paid leave to care for sick children. IWPR
The demands of work and family are at war when parents lose wages or risk losing their jobs to care for their sick children, or when parents juggle insecure child care arrangements because they cannot afford better.
The Vast Majority of Low-Income Parents Work
Seventy percent of children below the federal poverty line lived in working families in 2003. Work is even more widespread in families below twice the poverty line; in 2002 86 percent of these children in working families. They join the rest of American workers whose wages have been shrinking or stagnating since the end of 2001. EPI
With So Many Struggling Families, Our Leaders Should Be Paying Attention - and Addressing Their Problems
Too often, their needs are being ignored. They are, in the words of the Community Service Society of New York, the "Unheard Third." CSSNY
- Low-income families need jobs with higher pay.
- They need benefits like health insurance and paid leave time.
- They need affordable child care and housing.
- They need protections when work is not available.
The Bush Administration has promoted tax cuts as the answer to most problems, from boosting economic growth to increasing families' incomes. But the tax cuts enacted since 2001 do not help families in the Unheard Third - they divert resources from them to wealthy Americans who do not need more help.
The Bush Tax Cuts Hurt Low and Moderate Income Families More Than They Help
The money that families with incomes in the bottom 40 percent receive from the tax cuts enacted from 2001-2003 is far too small to cover necessities such as health insurance premiums, the rising cost of housing and energy, or the cost of child care. An analysis by the Center on Budget and Policy Priorities , using new Congressional Budget Office (CBO) figures, estimates that in 2004, excluding the value of corporate and estate tax cuts:
- The lowest 20 percent (with incomes averaging $16,600) get an average tax cut of $230.
- The next 20 percent (with incomes averaging $38,100) get an average tax cut of $720.
- The richest 1 percent (with incomes averaging $1.17 million) get an average tax cut of $40,990.
While moderate income families might naturally just be glad to get any tax cut at all, they will lose more than they gain once the bill for the mammoth tax cut comes due. In 2004 alone, the tax cuts cost $290 billion; since 2001, they have totaled $620 billion. These tax cuts have greatly increased the deficit ($422 billion in 2004). But just as any family's borrowing eventually has to be paid back, the government's borrowing to pay for tax cuts will also have to be paid back. If the tax cuts stay in place and are paid for solely by federal spending cuts, everyone but the richest 20 percent will lose more than they gain. For example:
- The lowest 20 percent would experience an annual net loss of $1,502 (in 2004 dollars).
- The next 20 percent would lose $1,190.
- The richest 1 percent would still be ahead - a net gain of $38,784.
Even a hypothetical combination of tax increases and spending cuts would leave the bottom 80 percent behind, although not as much:
- The lowest 20 percent would lose $177 a year.
- The next 20 percent would lose $165 a year.
- The top 1 percent still gains $14,793.
These tax cuts cost billions - funds borrowed from our children and grandchildren, and not available to invest in job creation, health coverage, education, child care or other work supports.
Giving away vast sums in tax cuts has been justified as a means of job creation, but there are still 1 million fewer jobs now than before the recent recession began.
This is the first time since the Great Depression that an economic downturn's job losses have not been fully restored so long after the onset of recovery. It is now 41 months since the recession began. In all the other recoveries since the end of World War II, there were big net gains of jobs after 41 months. EPI
Proposals to make the 2001-2003 tax cuts permanent and solve other problems like the rising number of people without health insurance through the tax code will overwhelmingly benefit people with high incomes - they will not help the "Unheard Third."
We need to bring solutions to the people and families who are struggling.
What belongs on such an agenda? Here is a partial list:
1. Affordable, comprehensive health insurance for adults and children;
2. Increasing and indexing the minimum wage;
3. Expanded unemployment insurance - reviving the now lapsed additional weeks of benefits for the long-term unemployed and allowing part-time and recent workers to qualify for benefits;
4. Paid sick leave;
5. Federal funding to states to invest in additional job development and training, child care, housing, and other supports.
What Will It Take To Create A True Prosperity Agenda
When there is a natural disaster like Hurricane Frances, people in communities come together to dig out, and government steps up to the plate to play a prominent role in putting their lives back on track. Government helps to prevent destitution, repair the infrastructure, rebuild the economy, and protect people from unsafe conditions and shady operators.
When economic forces damage people's livelihoods and deprive them of necessities, government's role is just as important - to prevent forces beyond the control of individual workers from closing off opportunities for prosperity that benefits all, not just a few.
When living standards are eroding for so many, the consequences genuinely threaten our future.
We need a national agenda to guide the nation to the investments that will secure truly shared prosperity.
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For more information, contact Deborah Weinstein, Coalition on Human Needs,
dweinstein@chn.org ; (202) 223-2532 x31 |
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