Overlooked and Undercounted - Insight Center for Community ...

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2 — OVERLOOKED AND UNDERCOUNTED SELF-SUFFICIENCY STANDARDS ARE BASIC NEEDS, NO-FRILLS BUDGETS CREATED FOR ALL FAMILY TYPES IN EACH COUNTY IN A GIVEN STATE. The major differences between the Self-Sufficiency Standard and the Federal Poverty Level include: The Standard is based on all major budget items faced by working adults: housing, child care, food, health care, transportation, and taxes. In contrast, the FPL is based on only one item — a 1960s food budget. Additionally, while the Federal Poverty Level is updated for inflation there is no adjustment made for the fact that food, as a percent cost of the household budget, has decreased over the years. The Standard allows different costs to increase at different rates and does not assume that any one cost will always be a fixed percentage of the budget. The Standard reflects the changes in workforce participation by assuming that all adults work to support their families, and thus includes work-related expenses, such as transportation, taxes, and child care, for each adult. The FPL is based implicitly on a demographic model of a two-parent family with a stay-at-home wife. The Standard varies geographically and is calculated on an area-specific basis (usually by county), while the FPL is calculated the same regardless of where one lives in the continental United States. The Standard varies costs by the age of children. This factor is particularly important for child care costs, but also for food and health care costs, which vary by age. While the FPL takes into account the number of adults and children, there is no variation in cost based on the age of children. The Standard includes the net effect of taxes and tax credits, which not only provides a more accurate measurement of income adequacy, but also illuminates where tax policies may be effective. The resulting Self-Sufficiency Standards 7 are basic needs, no-frills budgets created for all family types in each county in a given state. For example, the food budget contains no restaurant or take-out food, even though Americans spend an average of over 40% of their food budget on take-out and restaurant food. 8 The Standard also does not allow for retirement savings, education expenses, credit card debt, or emergencies. Figure 1 shows the distribution of the 2009 Self- Sufficiency Standard for one adult and one preschooler throughout Mississippi. In Mississippi, the Self- Sufficiency Standard for a single adult with one Figure 1. Map of Counties by Level of Annual Self- Sufficiency Wage One Adult and One Preschooler, MS 2009 Adams Wilkinson Amite $22,365 - $24,676 $25,264 - $29,358 $30,797 - $35,382 Benton Alcorn Tishomingo Marshall Tippah Prentiss Yalobusha Chickasaw Bolivar Tallahatchie Calhoun Monroe Grenada Leflore Webster Clay Montgomery Sunflower Oktibbeha Carroll Choctaw Lowndes Washington Issaquena Claiborne Jefferson Franklin Coahoma Quitman Sharkey Warren Tunica Hinds Copiah De Soto Humphreys Holmes Yazoo Tate Panola Madison Rankin Simpson Lafayette Attala Leake Scott Smith Covington Lawrence Jones Lincoln Jefferson Davis Forrest Pike Marion Lamar Walthall Pearl River Hancock Union Pontotoc Winston Neshoba Newton Jasper Stone Perry Harrison Itawamba Lee Noxubee Kemper Lauderdale Clarke Wayne Greene George Jackson
STRUGGLING TO MAKE ENDS MEET IN MISSISSIPPI — 3 preschooler ranges from $22,365 to $35,382 annually depending on the county. Mississippi’s metropolitan areas tend to have higher Self-Sufficiency Standards than non-metropolitan areas. The Pine Belt, Gulf Coast, and Central Mississippi metropolitan areas have the highest Self-Sufficiency Standards for this family type, ranging from $30,797 to $35,382 a year depending on the county. Counties with annual Self-Sufficiency Standards between $25,264 and $29,358 are in the second most expensive group in this comparison. This group includes counties located in metropolitan areas in southeast Mississippi, counties in or near the Jackson metropolitan area, as well as several counties in the northwest corner of Mississippi near or in the Memphis metropolitan area. Most of the non-metropolitan counties in the state have Standards that range from $22,365 to $24,676 for one adult and one preschooler, encompassing most of the state geographically. (The 2009 Annual Self-Sufficiency Standards for eight different family types for all counties in Mississippi are shown in Appendix Table B-1.) III. Sample and Methodology This study uses data from the 2007 American Community Survey (ACS), an annual U.S. Census Bureau survey of social, housing, and economic characteristics of the population. In the Census data, households are divided into family and non-family households. Family households have two or more persons residing together who are related by birth, marriage, or adoption; non-family households consist of a person living alone or with one or more nonrelatives. The sample unit for the study is the household, not the individual or the family. The householder is the person in whose name the housing unit is owned or rented; when the housing unit is jointly owned or rented, the householder is whoever designates him or herself. Given the increasing variety of living arrangements, this study includes all persons residing in households, including not only the family, but also non-relatives such as unmarried partners, foster children, boarders and their income. In Mississippi, 76% of households are “family” households (that is, at least two persons are related) and 24% are non-family households. Most nonfamily households consist of a single individual (84%); the remaining 16% have two or more unrelated persons. Regardless of household composition, it is assumed that all members of the household share income and expenses. To determine the income required to cover each family’s basic needs, the Self-Sufficiency Standard is used. The Self-Sufficiency Standard assumes that all adult household members work and includes all their work-related costs (e.g., transportation, taxes, child care) in the calculation of expenses. Therefore, to be consistent, the population sample in this report excludes those household members not expected to work—that is, those who report having a disability that prevents them from working and/or are elderly are excluded, as is their income, when determining household size, household composition, and total income. For example, a grandmother who is over 65 and living with her adult children is not counted towards the household size or composition; nor is her income (e.g., from Social Security benefits) counted as part of household income. Households that consist of only elderly and/or disabled adults are excluded altogether. Homeless individuals and families, as well as those who live in shelters or institutions, are also not included, as these groups are not included in the ACS household-based survey. This results in a total number of 743,859 households in Mississippi. To cover all possible household combinations (of number of adults, number and ages of children) for each region in Mississippi, Self-Sufficiency Standards were calculated for additional family types beyond the basic 70 family types. To determine whether a household’s income is above or below the Standard (the self-sufficiency income) the household’s income is compared to the calculated Standard for the appropriate family composition and geographic location. Household income is also compared to the appropriate family size Federal Poverty Level in order to determine whether households are above or below the FPL. (See Appendix A: Methodology and Assumptions for more detailed information.)
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