Sufficiency Report

8/14/2019 Sufficiency Report

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The Self-Sufficiency STandardfor OhiO 2008Pp o asst cmmt at ags


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OhiO AssOciAtiOn Of cOmmunity ActiOn Agencies

The Oho Assocaton of Communt Acton Agences (OACAA) epesents Ohos ft-two locall goened

communt acton oganzatons, coeng all eght-eght of Ohos countes. Communt Acton Agences ae

goened b boads made up of low-ncome people, local elected ofcals, and epesentates of the pate

secto. The pode a compehense menu of cost-effecte, one-stop seces to help Ohoans on the path to

self-sufcenc. Ohos Communt Acton Agences collectel, fo example, dect health cae to oe 231,000

patents a ea, pepae oe seen mllon meals fo low-ncome esdents, and pode Head Stat seces to

oughl seent-e pecent of all enolled chlden n Oho.

Fo futhe nfomaton on Oho Assocaton of Communt Acton Agences, go to http://www.oacaa.og/ o

tt:

Phlp E. Cole, Execute Decto

o asst cmmt at ags

50 W Boad St, Sute 1616

Columbus, OH 43215

Telephone: (614) 224-8500

center fOr WOmens WelfAre

The Cente fo Womens Welfae at the Unest of Washngton School of Socal Wok s deoted to futheng

the goal of economc justce fo women and the famles. The man wok of the Cente focuses on the

deelopment of the Self-Sufcenc Standad. Unde the decton of D. Dana Peace, the Cente patnes wth

a ange of goenment, non-pot, womens, chldens, and communt-based goups to:

1) eseach and ealuate publc polc elated to ncome adeuac;

2) ceate tools to assess and establsh ncome adeuac; and

3) deelop pogams and polces that stengthen publc nestment n low-ncome women, chlden, and

famles.

Fo moe nfomaton about the Centes pogams, o wok elated to the Self-Sufcenc Standad, call

(206) 685-5264. Full copes of ths epot can be ewed at http://www.wowonlne.og/oupogams/fess/.

Center for Womens WelfareUniversity of Washington, School of Social Work


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The Self-Sufficiency STandardFOr OHiO 2008

B Diana M. Peace, Ph.D. J 2008

DirectOr, center fOr WOmens WelfAre

uniVersity Of WAshingtOn schOOl Of sOciAl WOrK

PrePAreD fOr

OhiO AssOciAtiOn Of cOmmunity ActiOn Agencies


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The Self-Sufciency Standard for Ohio 2008

2008 Dana Peace, Oho Assocaton of Communt Acton Agences, and

Wde Oppotuntes fo Women


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PaThe Self-Sufcenc Standad was ognall deeloped b D. Dana Peace, whle seng as Decto of the

Women and Poet Poject at Wde Oppotuntes fo Women (WOW). The Fod Foundaton poded fundng

fo the Standads ognal deelopment.

The 2008 Oho Self-Sufcenc Standad epot has been pepaed though the coopeate effots of Lesl

Ecket, Saah Fckesen, Kaen Ganbeg, Cathene Hst, Lsa Manze, Kate Mogan, Maueen Newb, and

Agnes Oswaha at the Unest of Washngton, Cente fo Womens Welfae, and Phlp E. Cole of the Oho

Assocaton of Communt Acton Agences.

A numbe of othe people hae also contbuted to the deelopment of the Standad, ts calculaton, and/o

the wtng of state epots oe the last decade. Jennfe Books, Maueen Golga, and Kate Faa, fome

Dectos of Self-Sufcenc Pogams and Polces at WOW, hae been ke to the deelopment of ntates

that pomote the concept of self-sufcenc and the use of the Standad, and wee nstumental n facltatng

and nutung Faml Economc Self-Sufcenc (FESS) state coaltons. Addtonal past contbutos to the

Standad hae ncluded Laua Henze russell, Jance Hamlton Outtz, robeta Spalte-roth, Antona Juhasz,

Alce Gates, Alesha Dufee, Melane Laelle, Nna Dunnng, and Seook Jeong.

The 2008 Oho Self-Sufcenc Standad s the st edton. Ths epot, ncludng count specc nfomaton

fo moe than 70 faml tpes, s aalable onlne at http://www.oacaa.og. Hadcopes of ths epot ma be

odeed b callng Oho Assocaton of Communt Acton Agences at: (614) 224-8500.

The conclusons and opnons contaned wthn ths document do not necessal eect the opnons of those

lsted aboe. An mstakes ae the authos esponsblt.


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Tabe o f Contents

itt 1

How Much s Enough n Oho? 7

Compang the Standad to Othe Benchmaks of income 12

Compason of Oho Ctes to Othe U.S. Ctes 14

Modelng the impact of Wok Suppots 15

Closng the Gap Between Wages and the Standad 23

How the Self-Suffcenc Standad Has Been Used 28

Concluson 35

ets 37

Appendx A: Methodolog, Assumptons and Souces 43

Appendx B: The Self-Suffcenc Standad fo

Selected Faml Tpes n Oho 51

Appendx C: The Self-Suffcenc Standad as a Pecent of the Fedeal

Poet Leel, 2008 96


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As income inequality increases in the United States, more and more amilies are unable to stretch their wages to meet

the costs o basic necessities. Tough these amilies are oen not deemed poor by the ederal poverty measure, they

lack enough income to meet the rising costs o ood, housing, transportation, health care, and other essentials. Te

Sel-Suciency Standard meets the need or a measure o income adequacy that more accurately tracks and measures

the true cost o living acing American amilies today.

Te Sel-Suciency Standard measures how much income a amily o a certain composition in a given place needs to

adequately meet their basic needswithout public or private assistance.

Tis report explains how the Standard diers rom the ocial Federal Poverty Level; how it is calculated; what an

adequate income is or Ohio amilies; and how various public work supports, public policies, child support, and other

resources can help amilies move toward sel-suciency. Tis report concludes with a discussion o the varied ways the

Sel-Suciency Standard can be used as a tool or education and training, policy analysis, counseling, perormance

evaluation, and research.

Intodction

meAsuring incOme ADeQuAcy:PrOBlems With the feDerAlPOVerty leVel

How much income is enough or amilies to meet their

needs without public subsidies? Although determining

an exact dollar gure may be dicult, most people are

aware o whether or not their income is adequate. One

participant in a training program dened economic

sel-suciency as:

Being able to take care o yoursel and your

amily, you can pay the rent, you have a car or

transportation, you have a job and you can pay

your bills. You dont need to depend on anyone or

anything; you are o all assistance programs. You

can pay or daycare or your children, you can buy

groceries and you can pay or lie necessities.1

Te Federal Poverty Level (FPL), or ederal poverty

measure, is the ocial measurement used by the ederal

government to determine income adequacy.2 Families

are characterized as poor i their income is below the

Federal Poverty Level and not poor i it is above the

FPL. Te 2008 FPL or a single adult is $10,400 annually.

For each additional amily member the FPL increases

by $3,600 ($14,000 or a two-person amily, $17,600 or a

three-person amily, $21,200 or a our-person amily, and

so on). Te ederal poverty measure, however, has become

increasingly problematic and outdated as a measure o

income adequacy. Indeed, the Census Bureau itsel states,

the ocial poverty measure should be interpreted as a

statistical yardstick rather than as a complete description

o what people and amilies need to live.3 Despite the

known problems in the ederal poverty measure, it is still

used to calculate eligibility or a number o poverty and

work support programs.

Te most signicant shortcoming o the ederal poverty

measure is that or most amilies, in most places, it issimply not high enough. Because amilies can have

incomes above the ederal poverty measure and yet lack

sucient resources to adequately meet their basic needs,

most assistance programs use a multiple o the ederal

poverty measure to determine need. For instance, Ohios

Childrens Health Insurance Program, Healthy Start, is

available or amilies with incomes at or below 200% o

the FPL.4

Not only does the government consider the poverty line

to be low, but the general public does as well. More than

three out o ve Americans rated the threshold o being

poor as higher than the Federal Poverty Level. wo out o

ve Americans say a amily o our is poor with earnings

o nearly 150% o the FPL.5

However, simply raising the poverty level, or using a

multiple o the FPL, cannot solve the structural problems

inherent in the ocial poverty measure.


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2 the self-sufficiency stAnDArD fOr OhiO

In addition to the undamental problem o being too low,

there are our basic methodological problems with the

ederal poverty measure.

First, the measure is based on the cost o a single

itemoodrather than a market basket o basic

needs. Over our decades ago, when the Federal Poverty

Level was rst developed by Molly Orshansky, ood was

the only budget item or which the cost o meeting a

minimal standard, in this case nutrition, was known.

Te Department o Agriculture had determined

household ood budgets based on nutritional standards.

Because amilies spent about one-third o their income

on ood on average, this ood budget was multiplied

by three to determine the poverty level.6 Since then,

the poverty level has only been updated annually

using the Consumer Price Index (CPI). As a result the

percentage o the household budget devoted to ood has

remained rozen at one-third o the FPL even though

American amilies now spending on average only about

one-tenth o their income on ood.7 At the same time,

other costs have risen much astersuch as health care

and housingand new costs have arisen, such as child

care and taxes. None o these changes are, or can be,

refected in the ederal poverty measure.

Second, the ederal poverty measure implicitly uses

the demographic model o a two-parent amily with a

stay-at-home wie. Tis amily demographic no longer

refects the reality or diversity o American amilies

today. According to the U.S. Bureau o Labor Statistics,

both parents were employed in 62% o two-parent

amilies with children in 2006. Likewise, over 70% o

the adults in single adult amilies with children were

employed in 2006.8

Tird, the poverty measure does not distinguish between

costs or amilies in which the adults are employed and

those in which the adults are not employed. When the

poverty measure was rst developed, employment-

related costs were not a signicant expense or most

amilies: taxes were relatively low, transportation was

inexpensive, and child care or amilies with young

children was not common. However, today these

expenses are substantial, and thus the dierence in

costs between amilies with and without workingparents is considerable and variable.

Finally, the poverty measure does not vary by geographic

location. Tat is, the ederal poverty measure is the

same whether one lives in Louisiana or in the San

Francisco Bay area o Caliornia (with Alaska and

Hawaii being the only exceptions to the rule). However,

housing in the most expensive areas o the U.S. costs

nearly our times as much as in the least expensive

areas.9 Even within states, costs vary considerably.

For example, in Ohio, housing costs in Montgomery

County are up to 56% higher than in Van Wert County.

Te cost o child care varies even more by locality: child

care costs in Montgomery County are on average 66%

higher than the cost o child care in Van Wert County.

For these and other reasons, many researchers and

analysts have proposed revising the ederal poverty

measure. Suggested changes would refect twenty-

rst century needs, incorporate geographically based

dierences in costs, and respond to changes over time.10

In addition to the Sel-Suciency Standard, examples o

proposals or alternative measures o income adequacy

include living wages, the Basic Needs Budget, and the

National Academy o Sciences proposed alternatives.11

hOW the stAnDArD Differs frOmthe feDerAl POVerty meAsure

In order to provide a realistic measurement o the income

necessary or a given amily to meet their needs without

public or private assistance, the Sel-Suciency Standardaddresses each o the methodological problems with the

ederal poverty measure cited above.

A Maket Basket Appoach: Te Standard is based on

the individual cost o each basic need, which allows each

cost to increase at its own rate. Tus, the Standard does

not assume that ood is always one-third o a amilys

budget, as the ederal poverty measure does, nor does

it constrain any other cost to a xed percentage o the

budget.

THE MOST SiGNiFiCANT SHOrTCOMiNG OF

THE FEDErAL POvErTy MEASUrE iS THAT

FOr MOST FAMiLiES, iN MOST PLACES, THE

POvErTy LEvEL iS SiMPLy NOT HiGH ENOUGH.


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the self-sufficiency stAnDArD fOr OhiO 3

A Standad fo Woking Famiies: Te Standard

assumes all adults, regardless o household composition,

work ull-time,12and thereore includes all major costs

associated with employment(i.e., taxes, transportation,

and child care or amilies with young children).

Geogaphic Vaiation in Costs: Te Standard

incorporates geographical variations in costs. While

this is particularly important or housing, there is also

substantial geographic variation in child care, as well as

some variation in health care, ood, and transportation.

Unlike some proposed revisions to the poverty measure

the Standard uses actual costs and does not assume xed

relationships geographically between urban and rural

costs. Although rural areas generally have lower costs

than metropolitan areas, some rural areas (such as those

that are desirable tourist or second-home locations) have

costs as high as or higher than costs in a states urban

areas.

Acconting fo Fami Composition: Te Standard

accounts or cost variation by amily size and composition

(as does the FPL), but also by the ages o children.

While ood and health care costs are slightly lower

or younger children, child care costs can be much

higherparticularly or children not yet in schooland

are a substantial budget item not included in the ocialpoverty measure, even implicitly.

Incsion of Taxes and Tax Cedits: Te Standard

includes the net eect o taxes and tax credits. All taxes,

including state sales tax, payroll (Social Security and

Medicare) tax, and ederal, state, and city income taxes

are calculated into the Standard. Additionally, the ederal

Child and Dependent Care ax Credit (reerred to in the

Standard as the Child Care ax Credit or CCC), the

Earned Income ax Credit (EIC), and the Child ax

Credit (CC) are credited against the income requiredto meet basic needs.

Te Sel-Suciency Standard establishes a amily-

sustaining wage specic to most amilies throughout

the U.S. by making real-world assumptions, varying

data regionally and by amily type, and including the

net eect o taxes and tax credits. A Sel-Suciency

Wage means the amily or individual is on the road to

economic independence and is not orced to choose

between basic necessities (such as child care versus

nutritious ood or adequate housing versus health care).

However, it is important to note that the Standard is a

conservative measure that does not include long-term

needs (such as savings or college tuition), credit card or

other debt repayment, purchases o major items (such asa car or rerigerator) or emergency expenses.

the self-sufficiency stAnDArD:mOre thAn WAges AlOne

Using the Sel-Suciency Standard, a given amilys

income is deemed inadequate i it alls below the

appropriate threshold based on their amily type and

location. However, users o the Standard are urged to

think in terms o wage adequacy. Tat is, they should

ask: How close is a given wage to the Standard? Forexample, i the Standard or a certain amily type is $20

per hour, but the adult supporting the amily only earns

$10 per hour, then the latter wage has a wage adequacy

level o only 50%.

Despite the Standards use o income thresholds,

economic sel-suciency cannot always be achieved with

wages alone, or even with wages and benets together.

Sel-suciency is more than a job with a certain wage

and benets at one point in time. rue sel-suciency

is long-term economic security, making it a larger goal

toward which to strive as well as a process in which to

engage. As one person put it, Sel-suciency is a road

Im on.13

Central to attaining sel-suciency are access to

education, training, and jobs that provide real potential

or skill development and career advancement over the

long-term. Most individuals moving rom welare to

A SELF-SUFFiCiENCy WAGE MEANS THE

FAMiLy Or iNDiviDUAL iS ON THE rOAD TOECONOMiC iNDEPENDENCE AND iS NOT FOrCED

TO CHOOSE BETWEEN BASiC NECESSiTiES

(child care verSuS nuTriTional food, or

ADEqUATE HOUSiNG vErSUS HEALTH CArE).


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hOW the self-sufficiency stAnDArD is cAlculAteD

Several dierent criteria are required to make the Standard as consistent and accurate as possible, yet varied by

geography and amily composition. o the extent possible, the data used in the Sel-Suciency Standard are:

collected or calculated using standardized or equivalent methodology nationwide;

obtained rom scholarly or credible sources such as the U.S. Census Bureau;

updated annually; and

geographically- and/or age-specic, as appropriate.

Te Sel-Suciency Standard is calculated or 70 dierent amily types or all counties within a state. Family

types range rom one adult with no children, to one adult with one inant, one adult with one preschooler, and so

orth, up to two-adult amilies with three teenagers. While these amilies represent the majority o households,

the Standard can also be calculated or larger and multi-generational amilies.

Te Sel-Suciency Standard assumes adult household members work ull-time and thereore includes all

major costs associated with employment or every adult household member(i.e., taxes, transportation, and child

care or amilies with young children). Te data components o the Standard and the assumptions included

in the calculations are described below (more detailed inormation is included in Appendix A: Methodology,

Assumptions, and Sources).

Hosing: For housing costs, the Standard uses the most recent Fair Market Rents (FMRs), calculated annually

by the U.S. Department o Housing and Urban Development (HUD) or each states metropolitan and non-

metropolitan areas. FMRs include utilities (except telephone and cable) and refect the cost o housing that meets

basic standards o decency. In most cases, FMRs are set at the 40th percentile, meaning that 40% o the housing

in a given area is less expensive than the FMR.

Since HUD calculates only one set o FMRs or an entire metropolitan area, in multiple county metropolitan

areas the Standard uses the National Low Income Housing Coalition (NLIHC) median gross rents to calculate the

housing costs o the individual counties.

Chid Cae: o calculate the cost o child care, the Standard assumes market-rate costs (dened as the 75th

percentile) by setting, age, and geographical location. Most states, including Ohio, conduct or commission

market-rate surveys biannually or setting child care assistance reimbursement rates.

Te Standard assumes inants (children 0 to 2 years old) receive child care inamily day care. Preschoolers

(children 3 to 5 years old) are assumed to be in centercare. Costs or schoolage children (6 to 12 years old) assume

they receive care beore and aer school (part-time).

Food: Te Standard uses the U.S. Department o Agriculture (USDA) Low-Cost Food Plan or ood costs. Te

Low-Cost Food Plan was designed to meet minimum nutritional standards using realistic assumptions about

ood preparation time and consumption. However, it is still a very conservative estimate o ood costs. For

instance, the Low-Cost Food Plan does not allow or any take-out, ast-ood, or restaurant meals.

o vary costs within states, geographic dierences in ood costs are calculated using the ACCRA Cost o Living

Index, published by the Council or Community and Economic Research.


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Tanspotation: I there is an adequate public transportation system in a given area, the Standard assumes

workers use public transportation to get to and rom work. A public transportation system is considered

adequate i it is used by 7% or more o the working population in a given county. Te cost o public

transportation is calculated based on the price o a monthly adult pass. Tere are no counties in Ohio with 7% or

more o the working population using public transportation. Tereore all transportation costs in the Ohio 2008Standard are calculated based on private transportation.

Private transportation costs are based on the average costs o owning and operating a car. One car is assumed

or households with one adult and two cars are assumed or households with two adults. Costs are calculated

assuming that the car(s) will be used to commute to and rom work ve days per week, plus one trip per week or

shopping and errands. In addition, one adult in each household with young children is assumed to have a slightly

longer weekday trip to allow or linking trips to a day care site. For per-mile costs, driving cost data rom the

American Automobile Association is used. Te commuting distance is computed rom the National Household

ravel Survey.

Te auto insurance premium is the average premium cost or a given state, calculated by the National Associationo Insurance Commissioners. o create within state variation (regional or county) in auto insurance premiums,

ratios are created using sample premiums or the automobile insurance companies with the largest market shares

in the state.

o estimate the xed costs o car ownership, the Standard uses Consumer Expenditure Survey amounts or

amilies with incomes between the 20th and 40th percentile. Te xed costs include expenses such as re, the,

property damage and liability insurance, license, registration, taxes, repairs, monthly payments, and nance

charges. Te monthly variable costs (e.g., gas, oil, tires, and maintenance) are also included, but the initial cost o

purchasing a car is not.

Heath Cae: Te Standard assumes that an integral part o a Sel-Suciency Wage is employer-sponsoredhealth insurance or workers and their amilies. Te average health care premiums paid by workers are rom

the national Medical Panel Survey (MEPS) and vary or single adults and or a amily. o vary premium costs

by county or regions within each state, the Standard uses average premiums rom the health care insurance

companies with the largest market shares or with the widest coverage. Health care costs also include regional

out-o-pocket costs calculated or adults, inants, preschoolers, schoolage children, and teenagers obtained rom

the MEPS,

Misceaneos: Miscellaneous expenses are calculated by taking 10% o all other costs. Tis expense category

consists o all other essentials including clothing, shoes, paper products, diapers, nonprescription medicines,

cleaning products, household items, personal hygiene items, and telephone service. It does not allow or

recreation, entertainment, savings, or debt repayment.

Taxes: axes include ederal and state income tax, payroll taxes, and state and municipal sales tax where

applicable. Additionally, the Standard includes ederal tax credits (the Earned Income ax Credit, the Child Care

ax Credit, the Child ax Credit) and applicable state tax credits.


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work cannot achieve sel-suciency through stopgap

measures or in a single step, but require assistance,

guidance, and/or transitional work supports to become

sel-sucient over time. While meeting basic needs

may be more urgent than access to education and

training, true long-term sel-suciency increasinglyrequires human capital investments that enhance skills

as well as improve access to jobs with career potential.

Sel-suciency is not likely to be sustainable without a

technologically advanced and broad-based education,

which can provide the fexibility to move into new,

innovative, or nontraditional jobs and careers.

Although the Sel-Suciency Standard determines a

wage that is adequate withoutpublic benets, this does

not imply that public work supports are inappropriate

or unnecessary or Ohio amilies. For amilies who have

not yet achieved wage adequacy, public subsidies or

high-cost necessities such as child care, health care, and

housing are requently the only means to adequately

meet basic needs. Indeed, many amilies in Ohio rely on

public work supports to ll the gap between wages and

basic needs. Furthermore, the Sel-Suciency Standarddoes not imply that amilies at any income should be

completely sel-reliant and independent o one another

or the community at large. It is through interdependence

with community institutions and inormal networks

o riends, extended amily, and neighbors that many

amilies are able to meet both their non-economic and

economic needs.


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How Mch is Enogh in Ohio?

Te Sel-Suciency Standard varies by both amily type

and by geographic location because the amount o money

amilies need to be economically sel-sucient depends

on amily size, composition, childrens ages, and on the

state and county o residence. Tis section o the report

uses examples rom Cuyahoga, Belmont, and Franklin

counties to present an overview o how much is enough

to be economically sel-sucient in Ohio.

The Sef-Sfcienc Standad fo Seect Fami

Tpes: o illustrate how a Sel-Suciency Standard is

calculated, able 2 shows the monthly expenses and

the Sel-Suciency Wages in Cuyahoga County or our

amily types: one adult; one adult with one preschooler;one adult with one preschooler and one schoolage child;

and two adults with one preschooler and one schoolage

child.

In Cuyahoga County, a single adult needs to earn $8.88

per hour to be able to meet his/her basic needs. With

the addition o a preschooler child, amilies with one

adult need to earn $16.45 per hour, about $7 more per

hour than single adults require to be sel-sucient. Te

additional earnings nance the increased costs o a

two-bedroom housing unit (instead o one-bedroom)

plus ull-time child care, as well as increases in other

expenses. When a schoolage child is added to amilies

with one adult and one preschooler, the Sel-Suciency

Wage increases to $21.03 per hour to cover increased

child care, ood, and health care costs (housing costs do

not increase because the Standard assumes that up to two

children or two adults share a bedroom). Altogether, thisamily type in Cuyahoga County needs to earn wages

that are three times the amount o Ohios 2008 hourly

minimum wage o $7.00.14

Table 2. The Sef-Sfcienc Standad fo Seect Fami Tpes*Monthly Expenses and Shares of Total BudgetsCuahoga Count, OH 2008

mOnthly cOsts

One ADultOne ADult, One

PreschOOler

One AD ult,One PreschOOler,

One schOOlAge

tWO ADults,One PreschOOler,

One schOOlAge

cOsts % cOsts % cOsts % cOsts %

Hosing $598 38 $720 25 $720 19 $720 17

Chid Cae $0 0 $672 23 $1,144 31 $1,144 27

Food $223 14 $337 12 $505 14 $695 16

Tanspotation $216 14 $222 8 $222 6 $423 10

Heath Cae $137 9 $314 11 $335 9 $401 9

Misceaneos $117 8 $227 8 $293 8 $338 8

Taxes $273 17 $548 19 $749 20 $787 19

Eaned Income Tax Cedit (-) $0 0 $0 0 $0 0 $0 0

Chid Cae Tax Cedit (-) $0 0 ($63) -2 ($100) -3 ($100) -2

Chid Tax Cedit (-) $0 0 ($83) -3 ($167) -5 ($167) -4tOtAl Percent 100 100 100 100

self-sufficiency WAge

HOurly** $8.88 $16.45 $21.03 $12.05 pe adult***

mOnthly $1,563 $2,894 $3,701 $4,241 combned***

AnnuAl $18,758 $34,733 $44,413 $50,888 combned***

* The Standad s calculated b addng expenses and taxes and subtactng tax cedts. Taxes nclude fedeal, state, and ct ncome taxes (ncludng state taxcedts except state EiTC) and paoll taxes.

** The houl wage s calculated b ddng the monthl wage b 176 hous (8 hous pe da tmes 22 das pe month).

*** The houl wage fo famles wth two adults epesents the houl wage that each adult would need to ean, whle the monthl and annual wages epesentboth paents wages combned.

Note: Totals ma not add exactl due to oundng.


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When a second adult is added to the household,

creating a amily type o two adults and two childrena

preschooler and a schoolage childthe costs or basic

needs such as ood, transportation, and health care

increase somewhat. However, because the Standard

assumes both adults work ull-time, each adult must earn$12.05 per hour to meet the amilys needs.

In addition to the basic expenses such as housing and

child care, the Standard includes taxes and tax credits in

the calculation o the Sel-Suciency Wage. For example,

in able 2 amilies with one adult and one preschooler in

Cuyahoga County qualiy or a Child Care ax Credit o

$63 per month and a Child ax Credit o $83 per month.

Tese ederal tax credits are subtracted rom the other

expenses and taxes to calculate the Sel-Suciency Wage.

Appendix B o this report shows the monthly expenses,

taxes, tax credits, and Sel-Suciency Wages or eight

dierent amily types or each county in Ohio.

Pecentage of the Standad reqied to Meet

Basic Needs: Figure 1 shows the proportion o income

spent on each basic need or amilies with one adult,

one preschooler, and one schoolage child in Belmont

County. Each monthly expense is shown as a percentage

o the total income necessary or this amily type to be

sel-sucient. Families with two children (when one is

under schoolage) generally spend about hal their income

on housing and child care expenses alone. For this amily

type in Belmont County, child care accounts or 33%

and housing accounts or 22% o the amilys monthly

costs. Over hal (55%) o this amily types income is

spent on child care and housing alone. Te cost o ood or

this amily is 19% o total income, ar lower than the 33%

assumed by the methodology o the Federal Poverty Level.

Other expenses account or smaller shares o theStandard:

Health Care: Health care makes up 12%, a relatively

small share, o this amily types expenses. However,

the calculation or health care assumes employers both

provide health insurance or amilies and pay 79% o

the premium (the average proportion paid by Ohio

employers or amily coverage).15 For Ohio amilies who

do not have employer-sponsored health insurance, it is

Housing: 22%

Child Care: 33%

Food: 19%

Transportation: 8%

Health Care: 12%

Taxes - Net*: -4%

Miscellaneous: 9%

-20%

0%

20%

40%

60%

80%

100%

PERCENT OF TOTAL BUDGET

Fgue 1. Pecent of the Sef-Sfcienc StandadNeeded to Meet Basic NeedsOne Adult, One Preschooler, and One Schoolage ChildBelmont Count, OH 2008

*Pecentages nclude the net effect of taxes and tax cedts. Thus, the pecent-age of ncome needed fo taxes s actuall 11%, but wth tax cedts, the amountowed n taxes s -4% because the amount eceed n tax cedts s hghe thanthe amount owed. Please see the text fo an explanaton of the teatment oftax cedts n modelng.Note: The annual Self-Sufcenc Wage fo One Adult, One Peschoole and OneSchoolage Chld n Belmont Count, OH s $29,867.

likely that health care costs would account or a greater

proportion o the amily budget than shown in Figure 1.

ransportation: ransportation costs account or

8% o total monthly costs. Te Standard or Belmont

County has been calculated assuming workers use

private transportation to get to and rom work.

Miscellaneous: Miscellaneous items (such as clothing

and household items) make up 9% o household costs.

axes and ax Credits: Net taxes and tax credits

account or -4% o the total monthly costs. Note that

this tax percentage includes all tax credits as i they

were received monthly, although credits are generally

not received until the ollowing year when taxes are

led. Te net taxes are negative because the amount

received in tax credits is more than the amount owed.


17/108


I it were assumed, as is generally the case or most

amilies, that tax credits are received annually in a

lump sum, then the monthly tax burden or this amily

in Belmont County would be 11% o total costs.

The Sef-Sfcienc Standad fo Seect Fami

Tpes Compaed to the Fedea Povet leve:

Figure 2 uses Franklin County to provide another

illustration o how the Sel-Suciency Wage varies by

amily type as well as how the Standard compares to

the Federal Poverty Level. Te bar chart shows that

single adults in Franklin County need a yearly income

o $17,652 to be sel-sucient, while single adults

with one preschooler child must earn nearly twice as

much, or $34,260 per year. Families with one adult

and two childrenone preschooler and one schoolage

childmust earn $43,730 per year to meet their basic

needs. With the addition o a second adultor a amily

type o two adults, one preschooler, and one schoolage

childthe total income necessary to meet basic needs is

$49,818 in Franklin County.

Te Federal Poverty Level is considerably lower than

the Sel-Suciency Wage or each o these amily types.

Te 2008 FPL starts at $10,400 or one adult, $7,000

less than the Sel-Suciency Wage or one adult in

Franklin County. With the addition o each amily

member the FPL increases by $3,600 per year while the

Standard varies byamily composition and thereoredoes not increase by a constant actor with the addition

o each amily member. For instance, the addition o a

preschooler child to the single adult increases the Sel-

Suciency Wage by over $16,000 per year, over our

times the FPL increase o $3,600 or an additional amily

member. Te much larger increase in the Sel-Suciency

Standard refects the substantial costs o adding a young

child to a household, including child care, housing, and

health care. Te addition o a schoolage child to this

$34,260($16.22/hr)

$43,730($20.71/hr)

$49,818($11.79/hrper adult)*

$17,652($8.36/hr)

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

Adult One AdultOne Preschooler

One AdultOne PreschoolerOne Schoolage

Two AdultsOne PreschoolerOne Schoolage

FPL = $10,400

FPL = $14,000FPL = $17,600

FPL = $21,200

ANNUAL SELF-SUFFICIENCY STANDARD WAGE

Fgue 2. The Sef-Sfcienc Standad fo Seect Fami TpesFankln Count, OH 2008

*The houl wage fo two adult famles epesents the houl wage that each adult would need to ean; the annual wages epesent both adults' wages combned.


18/108


amily type adds an additional $10,000 annually to the

Sel-Suciency Wage; though less than the additional

income needed or a younger child, it is still more than

two and a hal times the additional income allotted

by the FPL or an additional amily member. Adding

a second adult to the amily type o one adult withone preschooler and one schoolage child increases the

Sel-Suciency Wage by about $6,000, considerably less

than the additional income needed or an additional

preschooler or schoolage child, but still more than the

increase in the FPL.

While the Sel-Suciency Standard or a single adult in

Franklin County is 170% o the FPL, the substantial costs

associated with children, especially young children, raises

Fgue 3. Map of Conties b leve of Anna Sef-Sfcienc WageOne Adult and One Preschooler, OH 2008

$22,949 - $23,994

$24,123 - $25,892

$26,024 - $27,868

$28,008 - $32,854

$33,969 - $37,373

Adams

Allen

Ashland

Ashtabula

Athens

Auglaize

Belmont

Brown

Butler

Carroll

Champaign

Clark

Clermont

Clinton

Columbiana

Coshocton

Crawford

Cuyahoga

Darke

Defiance

Delaware

Erie

Fairfield

Franklin

Fulton

Gallia

Geauga

Greene

Guernsey

Hamilton

Hancock

Hardin

Harrison

Henry

Highland

Hocking

Holmes

Huron

Jackson

JeffersonKnox

Lake

Lawrence

Licking

Logan

Lorain

Lucas

Madison

Mahoning

Marion

Medina

Meigs

Mercer

Miami

MonroeMontgomery

Morgan

Morrow

Muskingum

Noble

Ottawa

Paulding

PerryPickaway

Pike

Portage

Preble

Putnam

Richland

Ross

Sandusky

Scioto

Seneca

Shelby

Stark

Summit

Trumbull

Tuscarawas

Union

Van Wert

Vinton

WarrenWashington

Wayne

Williams

Wood

Wyandot

Fayette

the Sel-Suciency Standard or one adult amilies with

two childrena preschooler and a schoolage childin

Franklin County to nearly 250% o the FPL. Although

adding a second adult to a amily with two children

does not increase costs substantially, the resulting Sel-

Suciency Standard is still 235% o the FPL. Appendix Cshows the Sel-Suciency Standard as a percentage o the

Federal Poverty Level or all counties in Ohio or three

dierent amily types.

Geogaphic Vaiation in the Sef-Sfcienc

Standad: In addition to varying by amily composition,

the Sel-Suciency Standard also varies by geographic

location. Te map below (Figure 3), visually displays the

geographical variation in the cost o meeting basic needs


19/108


across Ohios counties or amilies with one adult and

one preschooler. Figure 3 groups counties into ve wage

ranges.

In Ohio, the Sel-Suciency Standard or a single adult

with one preschooler ranges rom just under $23,000 to

just over $37,000 depending on the county. Te highest

cost counties surround Cincinnati, Cleveland, and

Columbus while the lowest cost counties are concentrated

along the western border and the southeastern section o

the state.

Figure 3 reveals a noticeable trend throughout Ohio in

which urban and suburban counties have the highest

Sel-Suciency Wages. As counties get urther away

rom the sizeable cities the Sel-Suciency Standard

declines, with rural counties experiencing the lowestSel-Suciency Wages.

Warren County, located northeast o Cincinnati

(Hamilton County), has the highest Sel-Suciency

Standard or amilies with one adult and one preschooler

in Ohio, at $37,373 per year. Te second and third most

expensive counties in Ohio are Geauga and Medina,

both o which border Cleveland (Cuyahoga County).

Te ourth most expensive county in Ohio is Delaware

County, which borders Columbus (Franklin County)

to the north. In Ohio, the Sel-Suciency Wages in

suburban counties that surround urban areas are oen

higher than the Sel-Suciency Wages o the cities

themselves or one adult and one preschooler amilies.

Noble and Morgan counties in southeastern Ohio are

the least expensive or amilies with one adult and one

preschooler with Sel-Suciency Wages o just under

$23,000 per year. Southeastern Ohio is among the lowest

cost areas o the state or this amily type, with the

exception o Athens County, where Ohio University is

located. Four counties along Ohios western border with

Indiana are also in the lowest cost group o counties

or this amily type, where Sel-Suciency Wages are

between $23,000 and $24,000 per year.

Variations in the cost o housing and child care accountor much o the geographic dierence in the Standard

across counties or this amily type. For example, in

Noble County housing is $555 or a two-bedroom unit

while in Warren County it is $903. Likewise, child care

or one preschooler is $445 per month in Noble County

but $760 per month in Warren County.


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Compaing the Standad to Othe Benchmaks of Income

o put the Standard in context, it is useul to compare it

to other commonly used measures o income adequacy.

In Figure 4, a comparison is made between the Sel-

Suciency Standard and our other benchmarks o

income:

public assistance: emporary Assistance or Needy

Families (ANF), Food Stamps Program, and WIC

(Women, Inants and Children);

the Federal Poverty Level (FPL) or a amily o three;

the Ohio State minimum wage; and

the median amily income or a amily o three in

Marion County.

For this comparison, income benchmarks are shown

or three-person amiliesone adult, one preschooler,

and one schoolage childin Marion County. (Note

that this set o benchmarks is not meant to show how a

amily would move rom a lower income to economic

sel-suciency. Rather, the concept o sel-suciency

assumes a gradual progression that takes place over time.)

Where relevant, the comparison benchmarks are also or

three-person amilies. However, none are as specic as

the Standard in terms o age and number o children and/

or geographic location. As indicated in the ourth bar

rom the le in Figure 4, the Sel-Suciency Wage or this

amily type in Marion County is $35,556 per year.

TANF, Food Stamps and WIC: Te rst bar on the le

in Figure 4 demonstrates the income o the basic public

assistance package, including the cash value o oodstamps, WIC, and the ANF cash grant, and assuming no

wage or other income. Te total public assistance package

amounts to $10,022 per year or three-person amilies

Fgue 4. The Sef-Sfcienc Compaed to othe Benchmaks, 2008One Adult, One Preschooler, and One Schoolage ChildMaon Count, OH 2008

* The TANF beneft s $4,476 annuall ($373 pe month), Food Stamps beneft s $5,112 annuall ($426 pe month), and the WiC beneft s $434annuall ($36.13 pe month) fo a faml of thee n Oho.

**The Oho mnmum wage s $7.00 pe hou fo 2008. Calculated befoe taxes and tax cedts ths amounts to $14,784 pe ea. The thd bancludes the net effect of the addton of tax cedts (EiTC, CTC, and CCTC) and the subtacton of fedeal, state, and ct taxes.

$18,628$17,600

$10,022

$47,700

$35,556

$0

Welfare: TANF, FoodStamps and WIC*

Federal PovertyLevel

Full-Time MinimumWage**

Self-SufficiencyWage

Median FamilyIncome

80% MI =$38,160

Low

Income

50% MI =$23,850

VeryLow Incom

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

ANNUAL INCOME


21/108


in Ohio. Tis amount is just 28% o the Sel-Suciency

Standard or a three-person amily in Marion County and

is 57% o the Federal Poverty Level (FPL).

Fedea Povet leve: According to the 2008

ederal poverty guidelines, a amily consisting o one

adult and two children would be considered poor

with an income o$17,600 annually or lessregardless

o where they live, or the age o their children. Te

Sel-Suciency Wage or amilies with one adult, one

preschooler, and one schoolage child in Marion County

is over two times (200%) the Federal Poverty Level or

three-person amilies. Even in Noble County, the least

expensive county in Ohio or this amily type, the Sel-

Suciency Wage is still over one and a hal times (161%)

the ocial poverty line. Because 100% o the FPL is too

low compared to real needs, many policy makers have

turned to using 200% o the FPL as a better measure o

poverty. Although 200% o the FPL is an improvement,

the measure still does not refect substantial variations in

costs aced by amilies o dierent compositions or living

in dierent places. Appendix C demonstrates that the

percent o the Federal Poverty Level needed to meet basic

needs varies greatly across counties and amily types,

ranging rom 161% o the FPL in Noble County to 260%

o the FPL in Warren County or amilies with one adult,

one preschooler, and one schoolage child.

Minimm Wage: Te Ohio 2008 minimum wage is

$7.00 per hour. A ull-time worker at $7.00 per hour earns

$14,784 per year. Aer subtracting payroll taxes (Social

Security and Medicare) and adding tax credits when

eligible (the Earned Income ax Credit, Child ax Credit,

and Child Care ax Credit), this worker would have a net

cash income o$18,628 per year. Tis amount is more

than the workers earnings alone because the tax credits

or which the amily qualies are more than the taxes

owed.

With the addition o ederal and state tax credits, a

ull-time job at the minimum wage provides 52% o the

amount needed to be sel-sucient or this amily type in

Marion County. However, i it is assumed that the worker

pays taxes monthly through withholding, but does not

receive tax credits on a monthly basis (as is true o most

workers), she will only receive $13,804 during the year.

Tis amounts to just 39% o the Sel-Suciency Standard.

Median Fami Income: Median amily income (hal

o an areas amilies have incomes above this amount

and hal have incomes below this amount) is a rough

measure o the relative cost o living in an area. Te

U.S. Department o Housing and Urban Development(HUD) uses area median amily income as a standard

to assess amilies needs or housing assistance. Tose

with incomes between 50% and 80% o the median area

income are considered Low Income while those with

incomes below 50% o the median income are considered

Very Low Income.16 Te median income or a three-

person amily in Marion County is $47,700 annually.

Tereore, a amily o three living in Marion County

with an income between $23,850 and $38,160between

50% and 80% o the median incomeis considered LowIncome. Te Sel-Suciency Standard o $35,556 or

this amily type in Marion County is 75% o the median

amily income, which alls within HUDs denition o

Low Income.17 Tis suggests that a substantial portion o

Ohio amilies lack adequate income to meet their needs,

and that the Standard is set at a level that is neither too

high nor too low.


22/108


Compaison of Ohio Cities to Othe u.S. Cities

Te Sel-Suciency Standard has been completed or

37 states, plus the Washington, D.C. Metro Area and

New York City. Because the Standard uses the same

methodology across states, the cost o meeting basic

needs or a given amily type in dierent states can be

directly compared.

In Figure 5, the Standard or Cleveland (Cuyahoga

County) and Cincinnati (Hamilton County) are compared

to the Standard or counties that include the ollowing

cities: Chicago, IL; Indianapolis, IN; Jacksonville, FL;

Kansas City, MO; Louisville, KY; Milwaukee, WI;

Nashville, N; Portland, OR; and San Diego, CA.

Since the Standards or these places were completed in

dierent years, all numbers have been updated to 2008

dollars or the purpose o this analysis. While costs are

likely to increase at varying rates in dierent places,

or the sake o consistency the U.S. Bureau o Labor

Statistics Consumer Price Index (CPI) is used to estimate

infation when updating other Standards or this analysis.

Te wages shown in Figure 5 are Sel-Suciency Wages

or amilies with one adult, one preschooler, and one

schoolage child. In Cleveland, the adult must earn a wageo $21.03 per hour to be sel-sucient, making Cleveland

the ourth most expensive city in this comparison. San

Diego, Milwaukee and Chicago each have higher Wages

than Cleveland. Te most expensive city shown in Figure

5 is San Diego, with a Sel-Suciency Wage o $24.98

per hour. In San Diego this amily type requires about

$4.00 more per hour than in Cleveland to meet basic

needs. Louisville has the most comparable cost o living

to Cleveland, where this amily type requires a Wage o

$20.91, only 12 cents less per hour than in Cleveland. Te

Wage in Cleveland is over $5.00 per hour more than the

Sel-Suciency Wages o the two least expensive cities

shown, Portland and Indianapolis.

Cincinnatis hourly Sel-Suciency Wage or this amily

type is $19.96, midway between the most expensive and

least expensive cities in this comparison. Kansas City,

Jacksonville, Nashville, Indianapolis and Portland are

all less expensive than Cincinnati. Kansas City has the

most comparable Sel-Suciency Wage or this amily

type, where the adult needs to earn 68 cents less per hour

than in Cincinnati. Although it is more expensive orthis amily type to live in Cleveland than in Cincinnati,

the dierence amounts to just over one dollar per hour

between these two Ohio cities.

Te Sel-Suciency Wages or Cleveland and

Cincinnati are calculated assuming amilies use

private transportation. Public transportation costs are

signicantly less than the cost o owning and operating

a car; thus, in areas where private transportation costs

are assumed, the Wage refects higher transportation

expenses. Residents o these cities who use public transit

in place o private transportation may nd their cost o

living is lower than that refected in the Standard.

While both Cleveland and Cincinnati are less expensive

than some o the places with which they have been

compared, amilies with one adult, one preschooler, and

one schoolage child still require an hourly wage that is

nearly three times Ohios 2008 minimum wage o $7.00

per hour to meet their basic needs.

Fgue 5. The Sef-Sfcienc Wage fo Ceveand andCincinnati, OH Compaed to Othe u.S. Cities, 2008*One Adult with One Preschooler and One Schoolage Child

SELECT U.S. CITIES

$15.32

$19.28

$20.91

$22.55

$24.98

$18.75

$16.02

$21.66

$21.03

$17.94

$19.96

Portland, OR**

Indianapolis, IN

Nashville, TN

Jacksonville, FL

Kansas City, MO

Cincinnati, OH

Louisville, KY

Cleveland, OH

Chicago, IL**

Milwaukee, WI

San Diego, CA**

HOURLY SELF-SUFFICIENCY WAGE

*Wages ae updated to Apl 20 08 usng the Consume Pce index.**Wage calculated assumng faml uses publc tanspotaton.


23/108


Modeing the Impact of Wok Sppots

While the Sel-Suciency Standard provides the amount

o income that meets a amilys basic needs without

public or private assistance, many amilies cannot achieve

sel-suciency immediately. Work supports can help

working amilies achieve stability without needing

to choose between basic needs, such as scrimping on

nutrition, living in overcrowded or substandard housing,

or leaving children in unsae and/or non-stimulating

environments. Work supports include programs such as:

child care assistance;

health care (Medicaid or Ohios Childrens Health

Insurance Program);

housing assistance (including Section 8 vouchers and

public housing);

emporary Assistance or Needy Families (ANF) cash

assistance;

the Food Stamp Program; and

Women, Inants and Children (WIC) programs.

Work supports can also oer stability to help a amily

retain employment, a necessary condition or improving

wages.

Below is a brie discussion o each work support modeled

in ables 3 and 4. Child support, although not a work

support per se, can assist a amily in meeting basic needs

and so is also modeled. In addition, an explanation

o how and why the taxes and tax credits are treated

dierently in the modeling tables than in the Sel-

Suciency Standard is provided.

Chid Sppot: Child support payments rom absent,

non-custodial parents can be a valuable addition to some

amily budgets, even in cases where the non-custodialparents income is relatively low. When both parents

provide support to meet their childrens needs, whatever

the amount, children are likely to benet.

Chid Cae: Since child care is one o the major

expenses or amilies with children, a child care subsidy

can substantially reduce this expense. For this reason,

child care assistance is modeled separately as well as in

combination with other work supports. Te addition o a

child care subsidy generally provides amilies the greatest

nancial relie o any work support.

Heath Cae: While health care expenses are a relatively

small cost item in the Standard (about 10%), healthcare coverage is essential. As previously discussed, the

Standard assumes that a Sel-Suciency Wage includes

employer-sponsored health insurance or workers and

their amilies, with the cost partially nanced by the

employer. Without health benets, most people would

nd it dicult, and oen prohibitively expensive, to meet

their amilies health care needs. Without health care

coverage, an illness or injury in a amily can become a

very serious nancial crisis.

However, with the expansions o the ederal andstate-supported Childrens Health Insurance Program

(SCHIP), known in Ohio as Healthy Start, many working

amilies now have the option o covering their childrens

health care needs when their employer does not oer

amily coverage and the amily does not qualiy or

Medicaid. Families that enter the workorce rom ANF

may be eligible or continued coverage by Medicaid

or themselves and their children or up to 12 months

through the ransitional Medicaid program.18 Aer that

time, and or those amilies not transitioning o ANF,children can be covered by Ohios Healthy Start Program

as long as amily income is at or below 200% o the FPL.19

Food Stamps and Women, Infants and Chiden

(WIC) Pogams: Most households with a gross monthly

income o 130% or less o the Federal Poverty Level (FPL)

are eligible or the ederal Food Stamp Program. Tis

program, administered by individual states, provides

crucial support to needy households. Additional ly, Ohios

WOrK SUPPOrTSCAN HELP A WOrKiNG

FAMiLy ACHiEvE STABiLiTy WiTHOUT

SCriMPiNG ON NUTriTiON, LiviNG iN

OvErCrOWDED Or SUBSTANDArD HOUSiNG,

Or LEAviNG CHiLDrEN iN UNSAFE AND/Or

NON-STiMULATiNG ENvirONMENTS.


24/108


WIC program helps pay or specic nutrient-rich oods

and nutrition counseling or pregnant or postpartum

women, inants, and children up to age ve i their

income alls at or below 185% o the FPL.20 For those who

qualiy, the work support tables include ood stamps and

WIC benets in the calculation o ood costs.

Hosing: As with the child care subsidy, housing

assistance is a major support or amilies, as housing is

usually the largest expense or the second largest expense

when child care costs are high. Housing assistance

typically reduces housing costs to 30% o the households

income. Families with incomes below 80% o HUDs

area median amily income are considered low income

and are thereore eligible or ederal housing assistance.

However, housing subsidies are limited due to unding

availability and most new program participants must be

amilies with extremely low income (dened by HUD as

income below 30% o area median income).

Tax Cedits: ax credits can also provide needed

income or amilies. Te Standard shows tax credits

as i they are received monthly. However, or the work

supports modeled in able 3 (Columns 26), the

reundable ederal EIC and the additional reundable

portion o the Child ax Credit (CC) are shown as

received annually. Te Child Care ax Credit, which isnot reundable, is only shown as a monthly credit against

ederal taxes, i any, in both the Sel-Suciency Standard

and in the modeling columns o the table.

Te tax credits are shown annually in able 3 in order

to be as realistic as possible. Although by law a amily

can receive part o their EIC on a monthly basis

(called Advance EIC), many workers preer to receive

it annually as a lump sum. In act, nearly all amilies

receive the ederal and state EIC as a single payment the

ollowing year when they le their tax returns.21 Manyamilies preer to use the EIC as orced savings to pay

or larger items that are important amily needs, such as

paying the security deposit or housing, buying a car, or

settling debts.22 Tereore, in Columns 2-7 o able 3, the

total amount o the reundable EIC the amily would

receive annually (when they le their taxes) is shown in

the rst shaded line at the bottom o the table instead o

being shown monthly as in the Sel-Suciency Standard

column. Tis is based on the assumption that the adult

works at this same wage, ull-time, or the year.

Like the EIC, the ederal CC is shown as received

monthly in the Sel-Suciency Standard. However, or

the modeled work support columns, the CC is split

into two amounts with only the portion that can be used

to oset any remaining (aer the CCC) ederal taxes

owed shown monthly, while the additional reundable

portion o the CC is shown as a lump sum received

annually in the second shaded line o able 3. Note that

one cannot legally receive the additional reundable

portion o the Child ax Credit on a monthly basis.

tABle 3 mODeling the imPActOf WOrK suPPOrts AnD chilDsuPPOrt in frAnKlin cOuntyIn able 3, the impact o adding work supports and

child support is modeled or amilies with one adult, one

preschooler, and one schoolage child living in Franklin

County. Costs that have been reduced by these supports

are indicated with bold ont in the table.

The Sef-Sfcienc Standad (Comn 1): Te rst

column o able 3 shows the Sel-Suciency Standard

without any work (or other) supports to reduce costs

(except tax credits where applicable) or amilies with oneadult, one preschooler, and one schoolage child living

in Franklin County. Tis amily type has monthly child

care expenses o $1,194 and monthly housing costs o

$729. Te adult in this amily must earn a Sel-Suciency

Wage o $3,644 per month, or $20.71 per hour working

ull-time.

Chid Sppot (Comn 2): In Column 2, child support

is added to the Sel-Suciency Standard column. Te

child support payment o $286 per month is the average

amount received by amilies participating in the Child

Support Enorcement Program in Ohio.23 Unlike

additional earned income, child support is not taxable,

and can reduce the amount amilies need to earn both

directly and indirectly through reduced taxes, thus

having a strong impact on helping amilies meet their

needs. Overall, with child support the wage needed to

meet basic needs is reduced to $3,276 per month ($18.61

per hour).


25/108


Chid Cae (Comn 3): In Column 3, the rst work

supportchild careis added. Ohios child care

assistance program provides child care assistance or

amilies with incomes at or below 275% o the FPL.24 Tis

support reduces child care costs substantially rom $1,194

to a co-payment o $219 per month. Te addition o child

care assistance reduces the sel-suciency wage or this

amily type in Franklin County rom $3,276 to $2,500

per month (rom $18.61 to $14.21 per hour).

Chid Cae, Food Stamps, WIC, and Medicaid

(Comn 4): For adults moving rom welare to work,

child care, ood stamps, WIC, and Medicaid comprise the

typical package o benets. In Column 4, it is assumed

that Medicaid will cover all o the amilys health care

expenses, reducing health care costs rom $296 per

month to zero. Tis amily types income is too high to

qualiy or ood stamps however the amily is eligible or

WIC benets, reducing ood costs rom $457 to $421 per

month. Te reduced health care and ood costs decrease

the wage needed to meet basic needs, thereore lowering

the child care co-payment rom $219 in Column 3 to $182

in Column 4. ogether, child care assistance, WIC, and

Medicaid lower the wage required to meet basic needs to

just $2,074 per month.

Chid Cae, Food Stamps, WIC, and Ohio Heath

Stat (Comn 5): Aer one year, amilies making the

transition rom welare to work lose Medicaid coverage

or the entire amily. However, children are eligible or

Table 3.Impact of the Addition of Chid Sppot and Wok Sppots onMonth Costs and Sef-Sfcienc WageOne Adult with One Preschooler and One Schoolage ChildFankln Count, OH 2008

mOnthly cOsts:

#1

chilD suPPOrt AnD WOrK suPPOrts

#2 #3 #4 #5 #6

self-sufficiency

stAnDArDChid Sppot Chid Cae

Chid Cae,[Food Stamps]/

WIC* &Medicaid

Chid Cae,[Food Stamps]/

WIC & OHHeath Stat

Hosing, ChidCae, [Food

Stamps]/ WIC& OH Heath

Stat

Hosing $729 $729 $729 $729 $729 $625

Chid Cae $1,194 $1,194 $219 $182 $200 $188

Food $457 $457 $457 $421 $421 $421

Tanspotation $217 $217 $217 $217 $217 $217

Heath Cae $296 $296 $296 $0 $125 $125

Misceaneos $289 $289 $289 $289 $289 $289

Taxes $729 $592 $389 $288 $327 $295Eaned Income Tax Cedit $0 ** ** ** ** **

Chid Cae Tax Cedit (-) -$100 -$110 -$59 -$53 -$58 -$55

Chid Tax Cedit (-) -$167 -$102 -$37 $0 -$12 -$2

Chid Sppot -286

self-sufficiency WAge:

hOurly $20.71 $18.61 $14.21 $11.78 $12.72 $11.96

mOnthly $3,644 $3,276 $2,500 $2,074 $2,239 $2,105

AnnuAl $43,730 $39,309 $30,006 $24,885 $26,867 $25,256

Tota Fedea EITC(anna efndabe)

$0 $1,820 $2,898 $2,481 $2,820

Tota Fedea CTC(anna efndabe)** $771 $1,556 $1,925 $1,859 $1,960

* WiC s the Specal Supplemental Nutton Pogam fo Women, infants and Chlden (WiC). in Oho the aeage monthl WiC benet s $36.13 (Fy2007).

** See the tax cedts dscusson at the begnnng of ths secton ttled Modelng the impact of Wok Suppots.

Note: Wok suppots n backets [ ] ndcate that we attempted to model ths wok suppot; howee, f the ncome was hgh enough to meet the faml's needs, twas too hgh to ualf fo the wok suppot.


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Ohios Childrens Health Insurance Program, Healthy

Start, i the amilys income is below 200% o the FPL.

Under these circumstances, the adult in this amily

type would pay only or the cost o her own health care,

which is her share o the health insurance premium

available through her employer and her out-o-pocketcosts. Column 5 shows the same work support package as

Column 4, except that Ohio Healthy Start, which covers

only the children, has been substituted or Medicaid

or the whole amily. As a result, the cost o health care

increases to $125 per month to cover the adults costs.

Te higher wage this amily needs in order to cover the

adults health care increases the child care co-payment

rom $182 to $200 per month. Te amily still qualies

or WIC, keeping their ood costs at $421 per month. Te

amily goes rom needing to earn $2,074 per month inColumn 4 to needing to earn $2,239 per month ($12.72

per hour) to meet the amilys basic needs in Column 5.

Hosing, Chid Cae, Food Stamps, WIC, and

Ohio Heath Stat (Comn 6): In the nal column,

housing assistance is added to the work support package

modeled in Column 5. Housing assistance generally

reduces the cost o housing to 30% o income. In this

case, housing assistance reduces housing costs rom

$729 to $625 per month. Te cost o health care remains

$125 per month and ood costs remain $421 per month.However, the decrease in the cost o housing lowers the

total income needed, thereore slightly reducing the

child care co-payment to $188 per month. With the ull

benet package, the single parent with one preschooler

and one schoolage child in Franklin County needs to

earn just $2,105 per month ($11.96 per hour) to meet

her amilys basic needs. Note that even with all work

supports modeled, this wage is still nearly ve dollars

more than the 2008 Ohio minimum wage o $7.00 per

hour. Additionally, at this wage level, this amily type inFranklin County is eligible or nearly $5,000 in annual

reundable tax credits i the adult worked at this wage

throughout the year.

tABle 4 - mODeling the imPActOf WOrK suPPOrts On WAgeADeQuAcy in frAnKlin cOunty

While able 3 shows how child support and work

supports reduce the wage needed, able 4 starts with

various wages and asks How adequate are these

wages in meeting a amilys needs, with and without

various combinations o work supports? In able 4,

and throughout the Sel-Suciency Standard, wage

adequacy is dened as the degree to which a given wage

is adequate to meet basic needs, taking into accountvarious work supportsor lack thereo. I wage adequacy

is at or above 100%, the wage is enough or more than

enough to meet 100% or more o the amilys basic needs.

o model wage adequacy, able 4 uses Franklin County

and the same amily type (one adult with one preschooler

and one schoolage child) as able 3. Costs that are

reduced by work supports in able 4 are shown in bold.

As in able 3, it is assumed that the reundable ederal

EIC and the additional reundable portion o the CC

are received annually. Tereore, these credits are not

shown in able 4 as available to reduce costs monthly, but

again the annual credits are shown in shaded rows at the

bottom o each panel.

In each Panel o able 4, Column 1 models the 2008 Ohio

minimum wage o $7.00 per hour. Columns 2 through 5

model median hourly wages o selected occupations in

Columbus, Ohio. Column 2 models the median hourly

wage or cashiers, $8.25 per hour. Column 3 models

$9.31, the median wage or child care workers. In Column4 the median wage or nursing aides, orderlies, and

attendants is modeled at $11.63 per hour. Te last column

models $13.86, the median wage or truck drivers (light

or delivery services).25

In able 4, Panel A provides a baseline, that is the

adequacy o wages at ve wage levels when there are no

work supports (wages only). Using the same ve wage

levels, Panel B models the impact o child care assistance

alone on wage adequacy; Panel C models child care, ood

stamps/WIC, and Ohio Healthy Start; and Panel D addsa housing subsidy to the supports modeled in Panel C.

Pane ANo Wok Sppots (Wages On): In Panel

A, the amily does not receive work supports. In Column

1, the adult earning the minimum wage o $7.00 per

hour or a total monthly income o $1,232, excluding

tax credits, experiences a shortall o $2,088 and has a

wage adequacy o just 37%. In other words, working

ull-time at the Ohio minimum wage, without any other


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support or resources, provides little more than one-third

o the income needed to meet the needs o amilies with

one adult, one preschooler, and one schoolage child in

Franklin County. In the second column o Panel A, the

median wage o $8.25 per hour or cashiers has a wage

adequacy o43%. Column 3 models child care workers,$9.31 per hour, at which the amilys wage adequacy is

49%. In Column 4, $11.63 per hour, the median wage

or nursing aides, orderlies, and attendants, has a wage

adequacy o60%. At $13.86 per hour in the last column,

the median wage or truck drivers, wage adequacy

reaches 71%.

Pane BChid Cae: When the amily receives child

care assistance, it reduces their expenses and raises wage

adequacy, as shown in Panel B. At $7.00 per hour, child

care assistance alone decreases the monthly cost o child

care rom $1,194 to just $77, increasing wage adequacy

rom 37% with no work supports to 56% with child care

assistance. At $8.25 per hour, the monthly child care

co-payment is $105, increasing wage adequacy rom

43% to 64%. In columns 3 and 4, at $9.31 and $11.63 per

hour, the monthly costs o child care are $127 and $182

respectively, and wage adequacy increases to 71% and

86%. In the last column, child care assistance brings the

wage adequacy or truck drivers to 98%, nearly enough to

meet all the basic needs or this amily type.

Pane CChid Cae, Food Stamps, WIC, and Ohio

Heath Stat: Receiving help with health care and

ood costs urther increases wage adequacy. At wages

below 200% o the FPL the cost o childrens health care

is covered by Ohio Healthy Start, reducing health care

costs rom $296 to $125 per month. At $7.00, $8.25, and

$9.31 per hour the amily is eligible or both ood stamps

and WIC, reducing ood costs rom $457 to $125, $191,

and $249 per month respectively. At $11.63 and $13.86

per hour the amily is no longer eligible or ood stamps,

but is eligible or WIC, reducing ood costs to $421 per

month. Te child care assistance co-payments remain the

same as in Panel B or each wage level. At the minimum

wage o $7.00 per hour, the additions o ood stamps,

WIC, and Ohio Healthy Start to child care assistance

increases wage adequacy to 72% so that this amily

type is now able to cover nearly three quarters o their

basic needs. At $8.25, $9.31, and $11.63 per hour, wage

adequacy increases to 80%, 86% and 94% respectively.

At $13.86 per hour the wage adequacy reaches over 100%

with this package o benets and the amily is able to

meet all o their basic needs and have a monthly surplus

in income o $166.

Pane DHosing, Chid Cae, Food Stamps,

WIC, and Ohio Heath Stat: With the addition

o housing assistance, housing costs are reduced rom

$729 to between $370 and $614 or all but the highest

wage level. Te costs o child care, ood, and health care

remain the same as in Panel C. Te ull package o work

supports modeled in Panel Dhousing assistance, child

care assistance, ood stamps, WIC, and Ohio Healthy

Startincreases wage adequacy to over 90% or all wage

levels while truck drivers remain at over 100% wage

adequacy. At the lowest wage o $7.00, the ull package o

work supports brings wage adequacy to 92%. At $8.25,

$9.31, and $11.63 wage adequacy is nearly100%, leaving

shortalls in income o just $71 or less per month.

imPOrtAnce AnD AVAilABility OfWOrK suPPOrts

When assisted temporarily with work supports until they

are able to earn Sel-Suciency Wages, amilies are able

to meet their basic needs as they enter or re-enter the

workorce. Tus, work support programs and tax policies

can play a critical role in helping amilies move towards

economic sel-suciency. Unortunately, the various

work supports modeled here are not available to all who

need them.

Hosing: Nationally, nearly two million amilies

received ederally assisted housing vouchers in 2007.26

However, according to the Center on Budget and Policy

Priorities (CBPP), 15 million low-income amilies have

unaordable housing costs (exceeding 30% o theirincome) while an additional nine million households

have severe housing cost burdens (exceeding 50% o their

income).27 O those receiving ederal housing assistance,

59% are amilies with children.28 In Ohio, about 82,000

amilies received ederally assisted housing vouchers in

2005. However, the CBPP estimates that during the same

year there were 591,578 low-income amilies in Ohio

with unaordable housing-cost burdens. Tereore less


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Table 4.Impact of Wok Sppots on Wage AdeqacOne Adult with One Preschooler and One Schoolage ChildFankln Count, OH 2008

#1 #2 #3 #4 #5

Ohio MinimmWage

MEDIAN HOurly WAGE OF SElECT COluMBuS, OHIO OCCuPATIONS*

CashiesChid CaeWokes

Nsing Aides,Odeies, and

Attendants

Tck Dives,light/Deive

hOurly WAge: $7.00 $8.25 $9.31 $11.63 $13.86

tOtAl mOnthly incOme: $1,232 $1,452 $1,639 $2,047 $2,439

PAnel A: nO WOrK suPPOrts

mOnthly cOsts:

Hosing $729 $729 $729 $729 $729

Chid Cae $1,194 $1,194 $1,194 $1,194 $1,194

Food $457 $457 $457 $457 $457

Tanspotation $217 $217 $217 $217 $217

Heath Cae $296 $296 $296 $296 $296

Misceaneos $289 $289 $289 $289 $289

Taxes $138 $160 $187 $271 $363

Eaned Income Tax Cedit (-) ** ** ** ** **

Chid Cae Tax Cedit (-) $0 $0 ($10) ($51) ($90)

Chid Tax Cedit (-) $0 $0 $0 $0 $0

tOtAl mOnthly eXPenses $3,320 $3,341 $3,359 $3,402 $3,455

SHOrTFAll (-) Or SurPluS ($2,088) ($1,889) ($1,721) ($1,355) ($1,016)

WAge ADeQuAcyTota Income/Tota Expenses

37% 43% 49% 60% 71%

PAnel B: chilD cAre

mOnthly cOsts:

Hosing $729 $729 $729 $729 $729

Chid Cae $77 $105 $127 $182 $219

Food $457 $457 $457 $457 $457

Tanspotation $217 $217 $217 $217 $217

Heath Cae $296 $296 $296 $296 $296

Misceaneos $289 $289 $289 $289 $289

Taxes $138 $160 $187 $271 $363



Chid Tax Cedit (-) $0 $0 $0 $0 $0


SHOrTFAll (-) Or SurPluS ($972) ($801) ($654) ($343) ($41)


56% 64% 71% 86% 98%

Tota Fedea EITC(anna efndabe)**

$4,824 $4,469 $3,998 $2,966 $1,974

Tota Fedea CTC(anna efndabe)**

$410 $806 $1,142 $1,877 $2,000

*U.S. Depatment of Labo, Bueau of Labo Statstcs. Ma 2007 state occupatonal emploment and wage estmates: Columbus, Oho. reteed June 16, 2008 fomhttp://www.bls.go/oes/cuent/oes_18140.htm**EiTC s not eceed as a cedt aganst taxes, so t s not shown as a monthl tax cedt; lkewse, onl the nonefundable poton of the Chld Tax Cedt (whch sa cedt aganst fedeal taxes) s shown, f an (see text fo explanaton).


29/108


Table 4. (Contnued)Impact of Wok Sppots on Wage AdeqacOne Adult with One Preschooler and One Schoolage ChildFankln Count, OH 2008

#1

Ohio MinimmWage

#2 #3 #4 #5

MEDIAN HOurly WAGE OF SElECT COluMBuS, OHIO OCCuPATIONS*

CashiesChid CaeWokes

Nsing Aides,Odeies, and

Attendants

Tck Dives,light/Deive

hOurly WAge: $7.00 $8.25 $9.31 $11.63 $13.86

tOtAl mOnthly incOme: $1,232 $1,452 $1,639 $2,047 $2,439

PANEl C: CHIlD CArE, FOOD STAMPS/WIC, OH HEAlTHy STArT

mOnthly cOsts:

Hosing $729 $729 $729 $729 $729

Chid Cae $77 $105 $127 $182 $219

Food $125 $191 $249 $421 $421

Tanspotation $217 $217 $217 $217 $217

Heath Cae $125 $125 $125 $125 $125Misceaneos $289 $289 $289 $289 $289

Taxes $138 $160 $187 $271 $363



Chid Tax Cedit (-) $0 $0 $0 $0 $0


SHOrTFAll (-) Or SurPluS ($469) ($365) ($275) ($137) $166


72% 80% 86% 94% 107%

PANEl D: HOuSING, CHIlD CArE, FOOD STAMPS/WIC, OH HEAlTHy STArT

mOnthly cOsts:Hosing $370 $436 $492 $614 $729

Chid Cae $77 $105 $127 $182 $219

Food $125 $191 $249 $421 $421

Tanspotation $217 $217 $217 $217 $217

Heath Cae $125 $125 $125 $125 $125

Misceaneos $289 $289 $289 $289 $289

Taxes $138 $160 $187 $271 $363



Chid Tax Cedit (-) $0 $0 $0 $0 $0

tOtAl mOnthly eXPenses $1,341 $1,523 $1,676 $2,069 $2,274SHOrTFAll (-) Or SurPluS ($109) ($71) ($38) ($22) $166


92% 95% 98% 99% 107%

Tota Fedea EITC(anna efndabe)**

$4,824 $4,469 $3,998 $2,966 $1,974

Tota Fedea CTC(anna efndabe)**

$410 $80 6 $1,142 $1,877 $2,000

*U.S. Depatment of Labo, Bueau of Labo Statstcs. Ma 2007 state occupatonal emploment and wage estmates: Columbus, Oho. reteed June 16, 2008 fomhttp://www.bls.go/oes/cuent/oes_18140.htm** EiTC s not eceed as a cedt aganst taxes, so t s not shown as a monthl tax cedt; lkewse, onl the nonefundable poton of the Chld Tax Cedt (whch sa cedt aganst fedeal taxes) s shown, f an (see text fo explanaton).


30/108


than one out o every seven eligible amilies received

assistance.29

Food: Nationally, enrollment in the Food Stamp

Program has increased steadily since 2002, reaching

26.5 million people or 11.8 million households in 2007.30

In Ohio, participation in the Food Stamp Program

has increased by 25% since 2003, reaching 1,076,764

participants or 492,811 households in scal year 2007.31

However, it is likely that many amilies who leave

ANF cash assistance programs to begin employment

remain eligible or ood stamps that they do not receive.

Te Center on Budget and Policy Priorities states that

Research by both the Department o Health and

Human Services and the Urban Institute has shown

that ewer than hal o the individuals who leave ANF

cash assistance continue to participate in the Food

Stamp Program despite earning low wages and (in most

cases) remaining eligible or ood stamp benets.32

According to the Urban Institute nearly 30% o children

under age six were children o immigrants in 2002.33

Documented immigrants are excluded rom ederal

benets or ve years aer entry into the U.S., and

undocumented immigrants are always ineligible or ood

stamps. Although citizen children o non-citizen parents

are eligible or benets, it is likely that ew non-citizen

parents apply or ederal benets, either due to perceivedrisk or lack o knowledge.34 Tus, a large number o low-

income children may not receive ood benets because o

their parents citizenship status.

Chid Cae: According to calculations done by the

National Womens Law Center, the FY 2007 Federal

Child Care and Development Block Grant (CCDBG)

was nearly $500 million less than the grant or FY 2002,

when adjusted or infation.35 Although some states made

progress in improving child care assistance policies

in 2006-2007, 17 states continue to have waiting lists

or have rozen new intakes or amilies seeking child

care assistance in 2007. Ohio, however, did not have a

waiting list as o 2007.36 Additionally, in over 25 states

co-payments made up a greater percentage o parents

income in 2007 than in 2001. For amilies in Ohio

with incomes at 150% o the FPL and with one or more

children in care, child care co-payments made up 9%

o amilies incomes in 2007, an increase rom 5% o

amilies incomes in 2001.37 Low-wage working parents

continue to ace barriers to accessing quality child care.

In Ohio, there were about 415,000 children under age six

(and about 1,000,000 children under age 19) in amilies

with incomes below 200% o the FPL in 2006.38 However,only about 46,600 children (in 26,200 amilies) in Ohio

received Child Care and Development Fund (CCDF)

subsidies in scal year 2005.39 Tis amounts to just 11%

o Ohios eligible children under age six (or 5% o Ohios

eligible children under age 19) receiving child care

subsidies in 2006.

Heath Insance: According to the Center on Budget

and Policy Priorities, nearly 16% o Americans lacked

health insurance in 2006, compared to 14% in 2001;

meanwhile, the percentage o uninsured children

nationwide has remained relatively steady between

2001 and 2006.40 However, Families USA reports since

2001, low-income childrens access to health insurance

coverage has been negatively aected by state budget

cuts resulting rom the scal pressures o the 2001

economic recession.41 Although SCHIP has expanded

since 2001, the number o uninsured children has

continued to increase at an even aster pace. According to

the CBPP, the main reason that both children and adults

have been losing ground in health insurance coverage isthe erosion o employer-sponsored insurance.42 Ohios

Healthy Start served 218,529 children and teens under

19 years o age in Fiscal Year 2006.43 According to U.S.

Census Health Insurance Data (2006), 4.5% o Ohios

children in amilies at or below 200% o the Federal

Poverty Level do not have health insurance.44

Chid Sppot: Despite the act that 60% o all custodial

parents in the United States have child support awards,

less than hal o those awarded child support actually

receive the ull amount owed to them, while one-quarter

o custodial parents awarded child support receive no

payment at all.45 When amilies receive payments with

the assistance o a state department o child support

enorcement agencies, the national average amount

received is $235 per amily, and in Ohio the state average

is $285.61 per amily.46


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Cosing the Gap Between Wages and the Standad

Many amilies do not earn Sel-Suciency Wages,

particularly i they have recently entered (or re-entered)

the workorce or live in high cost or low-wage areas. Such

amilies cannot aord their housing and ood and child

care; much less other expenses and are orced to choose

between basic needs. Tis section provides strategies

to close the gap between wages earned and the cost o

meeting all basic needs or working amilies.

able 5 below shows average wages or Ohios top ten

occupations (by number o employees). Te data was

collected by the Bureau o Labor Statistics (BLS) rom

the 2006 National Survey o Employers and updated

using the Consumer Price Index to 2008. Families withone adult, one preschooler, and one schoolage child in

Cuyahoga County require $44,413 per year or $21.03

per hour (without work supports) to be sel-sucient.

Only three o the top ten occupational categories in

Ohio provide average wages above the Sel-Suciency

Standard or this amily type (education, training,

and library occupations; health care practitioners and

technical occupations; and business and nancial

operations occupations). Te most common Ohio

occupational categoryoce and administrative support

occupationshas an average wage o $30,650, which is

nearly $14,000 less than the Sel-Suciency Wage or

this amily type in Cuyahoga County. Te ourth most

common Ohio occupational categoryood preparation

and serv inghas an average wage o $17,895, less than

hal o the Sel-Suciency Wage or this amily type in

Cuyahoga County.

Tus, Ohios most common occupations have wages that

are on average substantially below the minimum level

o sel-suciency. Te gap between wages and expenses

presents a challenge or state and local agencies to seek

strategies that will aid amilies striving to reach sel-

suciency.

strAtegies tO clOse the gAP

Tere are two basic approaches or individuals to closethe income gap: reduce costs or raise incomes. Te rst

approach, modeled and discussed in the previous section,

reduces costs through subsidies and supports, such as

child support, ood stamps, and child care assistance.

Strategies or the second approach, raising incomes,

are detailed below. Note, however, that reducing costs

and raising incomes are not mutually exclusive, but can

and should be used sequentially or in tandem. Some

parents may, or instance, receive education and training

leading to new jobs, yet continue to have their incomessupplemented by work supports until their wages reach

the sel-sucien

Sufficiency Report

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