News: September 7, 2007

 

 

 

Not Getting By in Texas

By Cheryl Smith

pie chart poverty levels
Who's not managing to scrape by, and why not? That's what the Austin-based Center for Public Policy Priorities addresses in new report "What It Really Takes to Get By in Texas," the premise of which is: "Families are not struggling because they do not work enough – they are struggling because they do not earn enough. ... Several factors beyond individual control have contributed to this phenomenon." Chief among them:
• "the decline in the real value of wages,"
• "diminishing employer-sponsored benefits,"
• "corporate downsizing and a weak job market,"
• and "regressive state tax policies that hit lower-paid workers the hardest."
According to 2006 U.S. census figures, 15.7% of Travis Co. residents lived below the federal poverty line – $19,350 for a family of four. (The federal government adjusted the line in 2007; it's now $20,650 for a family of four.) A principal tenet of CPPP's report, however, is that federal poverty-line numbers are too conservative, so the 15.7% figure only hints at the extent of poverty here. As the report notes: "The [federal] poverty measure was originally designed to reflect the minimum amount of income that American households need to subsist. "This method for determining household budget needs was established in the early 1960s based on the assumption that the cost of food accounted for one-third of household spending. Although the poverty levels are updated annually for inflation, they are still based on a food-cost-to-income ratio of one to three, despite significant shifts in household expenses." In other words, "[F]ood costs remain the only expense considered in determining how much income today's families need to make ends meet." Another problem: Except for Alaska and Hawaii, "The poverty guidelines do not take into account geographical differences in the cost of living, or the effects of a rising standard of living."
According to CPPP, "More than one-third (38%) of working families in Texas are low-income, with earnings below twice the federal poverty level. The majority of these families are not officially poor by government standards. In fact, for every low-income working family who falls under the official federal poverty line, there are almost two low-income families who are above it. Almost half (43%) of Texas children live in low-income working families."
In the Austin-Round Rock area, according to CPPP, a family of four – two parents and two children – must earn $43,644 a year, or 211% of the federal poverty level, to pay for housing, food, child care, medical insurance, medical out-of-pocket expenses, transportation, and other necessities, and that's with employer-sponsored health insurance. That makes the area one of the most expensive places in Texas to live. (For an area-by-area comparison, see www.cppp.org/fbe/estimator_step1.php.) According to Frances Deviney, co-author of the report, 29% of Austin-Round Rock residents make less than 200% of the poverty line annually, which comes to $40,888 a year for a family of four. As Deviney put it in a press release, "For too many Texas families, hard work is not paying enough to meet life's basic needs. There is a gap between what people are earning and what it costs to live."

To read the full report, which includes suggestions for improving the situation of low-income workers, see www.cppp.org/fbe.

Keywords | working poor | Center for Public Policy Priorities | What It Really Takes to Get By in Texas | federal poverty line | Frances Deviney |

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