TOO MUCH FOR TOO MANY: What does it cost families to live ... · TOO MUCH FOR TOO MANY: What does...

1JustSouth Quarterly, Winter 2014

JESUIT SOCIAL RESEARCH INSTITUTE

JustSouthQUARTERLY

TOO MUCH FOR TOO MANY: What does it cost families to live in Louisiana?

SPECIAL REPORT

—FRED KAMMER, S.J.

Recently, a representative of Archbishop Gregory Aymond of New Orleans asked me this question from the archbishop, “How much does it cost to live in New Orleans these days?” It was a question that had haunted me as an employer in the years immediately after Katrina as reports and rumors mixed together about rising prices of food, housing, utilities, and other basics. The census does not give us this information, nor do other reports from state, local, or federal governments, even in the traditional measures of “official poverty.” Yet the questions about cost of living in New Orleans and other cities persist, as do the realities of so many families coming to churches and social agencies across our state for food, utility assistance, and other financial help—especially near the end of the month when paychecks, social security, and other financial support have been exhausted.

Thus the report that follows. Staffed by our new Economic Policy Specialist Alí R. Bustamante, assisted by our fellows and student researchers, and made possible by a grant from the W.K. Kellogg Foundation, the Jesuit Social Research Institute set out to study just what it costs typical families to live a modest but dignified life in Louisiana and its major cities. Put another way, what does “economic security” mean for families in our state? The question has critical implications and significant moral import for employers, policy-makers, and all of us concerned with the common good.

This special report is made possible by a generous grant from the W.K. Kellogg Foundation.

WINTER 2014

2 JustSouth Quarterly, Winter 2014

TOO MUCH FOR TOO MANY: What does it cost families to live in Louisiana? —Continued from page 1

EXECUTIVE SUMMARY

Family economic security represents the idea that there is a measurable standard of living to ensure that families can meet essential basic needs and live a modest but dignified life. This standard puts families more than one step away from the serious economic deprivation that we know as poverty, homelessness, hunger, and untreated physical and mental illness. This report provides an account of how tens of thousands of Louisiana families—of various sizes, compositions, and locations—lack adequate income sources to sustain family economic security and human dignity.

To live an economically secure life in Louisiana, it costs a family of two (one mother and one child) $45,840 a year and a family of three (two adults and one child) $55,428. The family economic security calculations are based on detailed estimates for housing, food, child care, transportation, health care, apparel and personal care, education and reading, taxes, and emergency savings. For each additional child, the costs of economic security increase.

Data show that 86,232 married-couple families with one to three children lack incomes that meet the family economic security estimate for Louisiana. Additionally, 138,039 single-mother families with one to three children lack incomes that meet their family economic security estimate. This means that one in three married-couple families, 33 percent, and four in five single-mother families, 83 percent, lack economic security.

Traditional Catholic social teaching and that of many other faith communities recognize the right of workers to earn wages and benefits sufficient to provide support for themselves and their families. When they do not have sufficient income, society has a duty to assure that persons whose basic material needs are unmet have an established floor of material well-being on which all can stand with confidence and dignity. Pathways to such dignity for Louisiana families at risk include increasing the minimum wage and the Earned Income Tax Credit (EITC) as well as expanding Medicaid, crucial steps to the basic economic security of families and the future prosperity of Louisiana’s economy.


—Continued on page 4

Family Size 1 Adult + 1 Child 1 Adult + 2 Children 1 Adult + 3 Children*

Housing $738 $738 $966

Food $343 $536 $745

Child Care $562 $862 $1,162

Transportation $514 $514 $514

Health Care $946 $1,292 $1,355

Personal/housekeeping expenses $123 $145 $195

Education and Reading $34 $39 $53

Taxes $266 $223 $430

Emergency savings $294 $363 $452

Monthly Total $3,820 $4,713 $5,872

Annual Total $45,840 $56,556 $70,464

Hourly Wage $22.04 $27.19 $33.88

Economic Security Monthly Estimates for Louisiana Single-Mother Families 2014

Economic Security Monthly Estimates for Louisiana Married-Couple Families 2014

Family Size 2 Adults+1 Child 2 Adults+2 Children 2 Adults + 3 Children*

Housing $738 $738 $966

Food $585 $778 $987

Child Care1 $562 $862 $1,162

Transportation $655 $655 $655

Health Care $1,293 $1,355 $1,418

Personal/housekeeping expenses $151 $173 $223

Education and Reading $41 $47 $61

Taxes $239 $178 $355

Emergency savings $355 $399 $486

Monthly Total $4,619 $5,185 $6,313

Annual Total $55,428 $62,220 $75,756

Hourly Wage (1 worker) $26.65 $29.91 $36.41

Hourly Wage (2 workers) $13.32 $14.96 $18.21

As pastors we have seen firsthand

the faces of poverty in our midst.

Homeless people roam city streets

in tattered clothing and sleep in

doorways or on subway grates at

night. Many of these are former

mental patients released from state

hospitals. Thousands stand in line

at soup kitchens because they have

no other way of feeding themselves.

Millions of children are so poorly

nourished that their physical and

mental development are seriously

harmed. We have also seen the

growing economic hardship and

insecurity experienced by moderate-

income Americans when they lose

their jobs and their income due to

forces beyond their control. These

are alarming signs and trends. They

pose for our nation an urgent moral

and human challenge: to fashion a

society where no one goes without the

basic material necessities required for

human dignity and growth.

What is family economic security?Family economic security represents

the idea that there is a measurable standard of living to ensure that families can meet essential basic needs and live a modest but dignified life. This standard puts families more than a step away from serious economic deprivation that we know as poverty, homelessness, hunger, and untreated physical and mental illness. Family economic security informs us about the broad needs that families must meet in order to participate fully in society as well as the economic cost of food, housing, transportation, health care, child care, personal and housekeeping expenses, reading and education expenses, emergency savings,

and taxes. This special report provides a comprehensive account of the costs of these essentials in Louisiana, its six most populated metro areas, and a rural area average as well. We also provide an assessment of Louisiana residents’ ability to achieve family economic security and how employers and policymakers can improve the economic wellbeing of all Louisiana families.

Tens of thousands of Louisiana families are not reaching their full potential because they lack economic security. Low wages and a patchwork social safety net focused on those below the poverty threshold have proved inadequate to support a living standard that

provides Louisiana families with modest but dignified lives. The acknowledgment that a better measure is needed to assess the economic security of Louisiana families prompted us to write this report. What follows is an explanation of our approach to family economic security based on a cost of living assessment of Louisiana families, an analysis of the factors affecting Louisiana families’ ability to cover basic living costs, a review of Catholic Social Teaching on economic security, and a discussion of policies that can close the gap between deprivation and dignity.

U.S. CONFERENCE OF CATHOLIC BISHOPS

* See Methodology section, pages 10 – 11. Families with one to three children comprise 93.9 percent of all Louisiana families with children.



To answer this question, we focused on the most typical families with children in our state. These are married-couple families and single- mother families, comprising 92.4 percent of all Louisiana families with children.2 As we will show, to live an economically secure life in Louisiana it costs a family of two (single mother with one child) $45,840 a year and a family of three (married couple with one child) $55,428. This means that the hourly wage necessary for a modest but dignified standard of living for a family of two is $22.04, assuming a single full-time, full-year worker, and $13.32 for a family of three with two full-time, full-year workers. This estimate is based on our analysis of family economic security in Louisiana that determines the cost of living for families of various sizes, compositions, and locations throughout the state (estimates for families in various locations are available in Appendix, page 9).3

Our basic economic security calculations are based on detailed estimates for housing, food, child care, transportation, health care, apparel and personal care, education and reading, taxes, and emergency savings. We argue that these expenses are necessary to sustain a modest and dignified standard of living in Louisiana because they provide families with the essential resources that allow them to participate fully in society. To measure the meaning of “modest and dignified,” we have chosen, on most sets of indicators, to use low-cost estimates of families’ basic expenses (adjusting for regional differences). For example, we use the fair market rents for the 40th percentile of the population for housing, the total cost of employee-sponsored insurance plan for the lowest 25th percentile for health care, and low-cost food plans that assume all food is purchased from a grocery and prepared at home. A full explanation of our approach to measuring family economic security can be found in the appended methodology section (pages 10 – 11).

Data show that the share of a family’s total income consumed by a given basic need is heavily influenced by the size and composition of the family, as well as by its location in the state. For example, smaller families with few children spend a disproportionately greater share of their incomes on health care and housing while larger families with more children spend a disproportionately greater share of their incomes on child care and food.

In terms of geographic variations, the three metro areas with the highest costs of living in Louisiana are New Orleans, Baton Rouge, and Lafayette, in that order. Conversely, rural areas in Louisiana prove to be the least expensive locations in the state. The more expensive metro areas also tend to be the most populous and the areas with the highest costs for housing and personal and housekeeping expenses. The New Orleans metro area also has considerably higher health care costs and taxes compared to other locations in Louisiana. Despite having the lowest overall living costs, rural areas tend to have the highest transportation costs in the state.

Increasing costs of living have made it difficult for Louisiana families to afford the opportunity to live modest but dignified lives. For example, rising health care costs have priced out many individuals from buying health care because they can’t afford it. That leaves many families and their children without regular access to one of their most basic needs. In 2011, more than one in five of Louisiana’s adult population under age 65, 633,000 people, lacked health insurance coverage.4 Health care costs have risen faster than the prices for most other basic necessities and now comprise 28 percent of the family budget for Louisiana two-parent one-child families. Between 2003 and 2012, Louisiana was one of 12 states to have experienced an increase of more than 17 percent in the share of median incomes spent on total premiums for employer-sponsored insurance for people under 65.5

FAMILY ECONOMIC SECURITY BUDGET: Single Mother + 1 Child Family in LA

FAMILY ECONOMIC SECURITY BUDGET: Married Couple + 1 Child Family in LA

Healthcare25%

Healthcare28%

Transportation13%

Transportation14%

Child Care15%

Child Care12%

Food9%

Food13%

EmergencySavings

8%

EmergencySavings

8%

Taxes7%

Taxes5%

Education and Reading 1% Education and Reading 1%

Personal and Housekeeping Expenses 3%

Personal and Housekeeping Expenses 3%

Monthly budget: $3,820Annual budget: $45,840

Monthly budget: $4,619Annual budget: $55,428

Housing19%

Housing16%

What does it cost a family to live in economic security in Louisiana?


Housing in Louisiana also has become an added burden for many families. The scarcity of low-income housing in Louisiana, especially after Hurricane Katrina, has forced many families to spend an increasing share of their income on housing. Families spending more than 30 percent of their incomes on housing experience a “housing-cost burden” according to the U.S. Census.6 In 2013, 15.3 percent of Louisiana households with incomes below $20,000 spent 30 percent or more of their incomes on housing, a considerable stress on family budgets.7 Additionally, low-income families that rent were almost twice as likely to have a housing-cost burden.

Furthermore, high child care costs in Louisiana often serve as a penalty for working parents lacking the option of in-home child care. In fact, low-income families disproportionately suffer from high child care

costs. In Louisiana, the annual cost of weekday child care for a toddler is $6,745, 44.7 percent of the annual salary of a full-time, full-year minimum wage worker. That means that a single mother, earning minimum wage and working full-time year-round, with one child would have to provide all other basic needs for her and her child with the remaining annual salary of $8,334.

The family economic security estimate also includes emergency savings that represent 7.7 percent of a family’s monthly budget. Without emergency savings, families would be vulnerable to unexpected family or financial hardships as well as to losses of employment and income. The inclusion of emergency savings acknowledges that families living paycheck to paycheck, barely covering their immediate needs, are economically vulnerable and often preyed upon by payday lending companies.8 The emergency savings rate

of 7.7 percent assumes that families save enough over a 12-month period to cover one complete month’s expenses due to possible loss of income.9 As such, this emergency savings rate is a modest approach to savings that does not cover prolonged bouts with unemployment, illness, or expensive home and vehicle repairs. While not included within the family economic security estimates, a retirement savings fund is recommended for all families. Assuming a retirement savings rate for a 35-year-old saver seeking 60 percent replacement of his or her current income, a 7.4 percent savings rate is suggested for families with post-tax annual incomes below $60,000.10 Likewise, family economic security estimates do not consider higher education tuition expenses for adults and their children as well some recurring expenses such as phone, Internet, and charitable and church contributions.

—Continued on page 6

FAMILY ECONOMIC SECURITY AND POVERTYThe federal poverty threshold—often

called the “poverty line”—is the preferred measure used in reporting on economic hardship and designing state and federal programs, which provide a limited amount of family economic security in Louisiana and nationwide. Recently released figures from the U.S. Census show that more than one in five families with children in Louisiana were poor in 2013 — that’s 129,993 families with earnings below the federal poverty threshold, despite the fact that 91.9 percent of families with children have at least one worker.1 However, official poverty figures are just the tip of the iceberg. The number of families deprived of the food, shelter, medicine, and clothes necessary to live is much larger than federal poverty numbers suggest. These are the tens of thousands of near-poor families – people who often are forced to choose between paying the rent and fixing the car or to seek assistance frequently from a local food bank or place of worship. The poverty threshold measures only the level below which one is considered to be economically poor—not all these other families who are unable to meet their basic needs.2

Most of the 129,993 families with annual incomes below the federal poverty threshold were tens of thousands of dollars away from meeting the actual costs of economic security. For example, the poverty threshold for a family of two is $16,057 and our family economic security estimate for

Louisiana is $45,840, a difference of $29,783.3 Despite setting a stringent poverty measure, nevertheless 49.4 percent of single mothers with children in Louisiana live in poverty, in constant economic hardship, and in need.4 Even families working full-time minimum wage jobs – with one or two earners – do not earn enough to assure economic security.

The federal poverty threshold does not accurately reflect the dollar amount necessary to obtain basic economic security. The federal poverty threshold also makes the unrealistic assumption that when a family earns an additional dollar above the poverty line, it is saved from the hardships of poverty. Nonetheless, this official poverty measure influences how local, state, and federal governments account for poverty and often determines whether a family can access government-sponsored poverty-reducing social welfare programs.

1 U.S. Census Bureau. 2014. American Community Survey, 2013 American Community Survey 1-Year Estimates, detailed Tables; generated by Alí Bustamante; using American FactFinder; factfinder.census.gov; (30 September 2014).

2 The U.S. Census has developed alternative poverty measures such as the Supplemental Poverty Measure, but the federal poverty line is the preferred reference point for public welfare eligibility. See: Short, Kathleen. 2014. The Supplemental Poverty Measure: 2013. U.S. Census Bureau.

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ANNUAL POVERTY THRESHOLDS, MINIMUM WAGE WORK, AND FAMILY ECONOMIC SECURITY FOR LOUISIANA FAMILIES

3 The current methodology for the federal poverty threshold is based on three times the cost of a minimum food diet in 1963 and has been updated only for overall inflation using the Consumer Price Index. See: DeNavas-Walt, Carmen and Bernadette D. Proctor. 2014. Income and Poverty in the United States: 2013. U.S. Census Bureau.

4 Ibid.

ENDNOTES

POVERTY THRESHOLD

Family of 2 Family of 3

$16,057

$15,080

$55,428

$18,751

$30,160

$45,840FAMILY ECONOMIC SECURITY ESTIMATE

MINIMUM WAGE (Full-time, full-year/work)



Attaining family economic securityLouisiana families are not being afforded the opportunity

to live modest but dignified lives because the state lacks adequate income sources to sustain economic security. Data show that 86,231 married-couple families with one to three children lack incomes that meet the family economic security estimate for Louisiana. Additionally, 138,037 single-mother families with one to three children (80.3 percent of all single-parent families) lack incomes that meet their family economic security estimate. This means that one in three married-couple families, 33 percent, and four in five single-mother families, 83 percent, lack economic security. (Of single-father families, 26,539 or 39.4 percent, also lack economic security).

Single-mother families in Louisiana experience a much more difficult time obtaining the income necessary to live modest but dignified lives when compared to married-couple families. Single-mother families with one child have a median annual income of just $23,000, about half the annual family economic security estimate of $45,840, despite including non-earned income such as child support, workers’ compensation, and public assistance. Married-couple families with one child have a median annual income of $81,500, well above the annual family economic security estimate of $55,428.11 However, 32 percent of married-couple families with one child, 36,962 families, cannot meet the family economic security estimate for Louisiana.

Even families who meet their designated family economic security measure today may find it difficult to achieve economic security if they have the additional costs of having more than one child. Data show a second child for a married-couple family costs an additional $6,792 a year while adding a third child costs almost twice as much, an additional $13,536 a year due to additional housing and child care costs.

When compared to our family economic security estimates, it becomes clear that Louisiana wages have become increasingly out of touch with the basic needs of Louisiana families. According to the U.S. Census, 30.1 percent of Louisiana families with children earn annual incomes below $30,000.12 In fact, 53.3 percent of the Louisiana work force, more than 1 million workers, are employed in occupations with annual median salaries below $30,000.13 The three lowest paid occupational groups are food preparation and serving, personal care and service, and cleaning and maintenance, each of which pays an annual median salary below $20,000 despite employing 15.5 percent of all workers, a total of 292,223 workers. For most families in Louisiana, work simply does not guarantee economic security.

Additionally, the federal minimum wage of $7.25 an hour has been unchanged since 2009 and its purchasing power has eroded over time. Even in the best of times, meeting a family’s basic needs is impossible for a full-time, full-year minimum wage worker whose annual salary is $15,080. In 2013, there were 53,000 hourly workers earning minimum wage or less according to the Bureau of Labor Statistics.14 The minimum wage does not guarantee that a full-time job can provide a family with an income source that meets their basic needs. This explains in part why so many couples find it necessary for both parents to work no matter what their preferences about childrearing. Additionally, achieving family economic security is made difficult when hiring is slow, benefits are minimal, and sufficient employment is lacking. As of October, 2014, 134,610 workers were unemployed in Louisiana and thousands more remained underemployed.15

Faith and family economic securityIn the 12th century, a commonplace Christian teaching

was: “Feed the man dying of hunger, because if you have not fed him, you have killed him.”16 Catholic social teaching has long argued that basic human dignity and the right to life require food, clothing, shelter, rest, medical care, and basic education, as well as working conditions sufficient to provide individuals and their families a dignified standard of living.17 As a result, society has a duty to assure that persons whose basic material needs are unmet have an established floor of material well-being on which all can stand.18 Furthermore, acquiescing to the social marginalization and exclusion of human beings is called a form of social sin and a sinful dereliction of Christian duty.19 Our study also includes references to the shared views of many faith traditions on the importance of justice for “the least among us.”

Since 1891, modern Catholic social teaching has recognized the right of workers to earn wages sufficient to provide support for themselves and their families.20 This right to a “family wage” has been continuously reaffirmed by the Catholic Church through proclamations on the role that remuneration of work has on the ability of individuals and families to live truly human and dignified lives.21 St. John Paul II makes direct reference to the need of a family wage in order to secure just remuneration and provide a salary that sufficiently maintains a family with dignity and provides security for its future.22 In fact, the family wage is supported by Catholic social teachings on distributive justice that require the allocation of income, wealth, and power to fulfill the basic material necessities of persons in need and the institutionalized establishment of a floor of material well-being.23 This can and should be achieved first by adequate wages and benefits in the workplace.24 Where this does not occur, there should be a combination of wages and benefits and social welfare programs such as social security; workers compensation; unemployment benefits; and publicly funded housing, health, and income supports.

How can Louisiana enhance family economic security?

The economic security of families in Louisiana can be enhanced, first, by increasing their sources of income. The main source of income for most families is their wages earned from work. In fact, the spending of one family is the income of another—working families in Louisiana drive the state’s economy when they use their income to buy their basic necessities. As a result, an increase in wages would lead to additional spending and therefore greater economic growth, benefiting all of us.

Louisiana uses the federal minimum wage of $7.25 per hour; it is one of five states without a state minimum wage law. Increasing the minimum wage is crucial to the economic security of Louisiana families and the future prosperity of Louisiana’s economy. According to figures from the Economic Policy Institute and the Louisiana Budget Project, a minimum wage of $10.10 an hour in Louisiana would benefit 359,000 workers, create 3,300 new full-time jobs, and grow the state’s economy by $689 million.25 In 2013, Sen. Tom Harkin and Rep. George Miller introduced the Fair Minimum Wage Act that would increase the federal minimum wage to $10.10 per hour. However, without sufficient congressional support, the bill foundered. Nonetheless, Louisiana does not have to wait on Congress to act on a minimum wage increase. To date, 23 states and Washington, D.C., have legislated minimum wages above


Unitarian Universalists have always

advocated for economic justice. As a

religious tradition that has gathered to

affirm the dignity and worth of all people,

as individuals who covenant to promote

peace throughout an interdependent

human community, we move together

in support of public policies and other

measures that bring more justice and

more compassion to our society.

UNITARIAN UNIVERSALISTS

1 Child 36,962 65,7072 Children 29,625 48,3943 Children 19,644 23,936

1 CHILD 2 CHILDREN 3 CHILDREN

Married Couple Family Single-mother Family

FAMILIES LACKING ECONOMIC SECURITY BY NUMBER OF CHILDREN

10,000

20,000

30,000

40,000

50,000

60,000

70,000

0 36,962 65,707 29,625 48,394 19,644 23,936

the federal minimum wage of $7.25 per hour and an additional four states approved minimum wage increases through ballot measures in the 2014 election. Louisiana legislators have the power to pass a state minimum wage of $10.10 an hour or more.

Additionally, increasing the Earned Income Tax Credit (EITC) would also augment the income of working Louisiana families and enhance their economic security. In 2012 alone, 491,390 Louisiana families received the EITC and generated $1.3 billion for our economy.26 This is notwithstanding the fact that Louisiana’s EITC of 3.5 percent of the federal EITC is well below the state average for EITC states of 15.2 percent. Currently, Louisiana is tied for the lowest refundable EITC with Rhode Island. As a refundable federal and state tax credit that offsets payroll and income taxes for working families and individuals, the EITC lowers the tax liability of workers and their families and lets families keep a higher post-tax income. This is particularly important given that Louisiana has the third highest state and local sales and excise taxes in the country.27 The EITC can be claimed only by individual workers and working families and this has led many workers to increase their working hours over time, thus benefiting their families and the Louisiana economy. Research also has shown the EITC’s is linked to improved health of infants, higher test scores, higher high school graduation rates, and higher college attendance rates, all of which improve family economic security.28

Family economic security also can be achieved through more generous government-based social welfare programs and subsidies. For example, Medicaid expansion in Louisiana has the potential of bringing health care coverage to 330,000 uninsured residents.29 While estimates of Louisiana’s uninsured population vary, about one in seven residents lack health care—633,000 residents under age 65.30 Under the Affordable Care Act, Medicaid expansion could bring 15,600 jobs and $1.8 billion in economic growth to Louisiana in 2016.31 In addition, Medicaid expansion could save the state $267 million in revenues through 2022.32

Likewise, the expansion of existing social safety net programs such as cash transfers, child care subsidies, food subsidies (Supplemental Nutrition Assistance Program), affordable housing, and transportation investments can improve lower-income families’ ability to afford these crucial basic needs. Existing social safety net programs do not provide adequate support to families in need. This is most often due to the inadequacy of programs to cover all those in need of services as well as the difficulty of making it through the application

process for federal and state aid.33 Additionally, the benefits of welfare programs are often too low to provide low-income families with the economic security they deserve (see “Safety Net Programs” on p. 8).

The acknowledgement that Louisiana families need more to live securely and reach their full potential calls for us to address economic disparities that are also critical to promoting and sustaining a vibrant economy. To this end, this report seeks to provide Louisiana residents and policymakers with the metrics and estimates necessary to pursue enhancements in the economic security of families.

ENDNOTES

1 Married-couple families with only one worker would likely have considerably lower child care costs if the non-working parent is the child’s primary caretaker.

2 U.S. Census Bureau. 2014. American Community Survey, 2013 American Community Survey 1-Year Estimates, detailed tables generated by Alí Bustamante using American FactFinder; factfinder.census.gov; (30 September 2014).

3 Our basic economic security estimates for Louisiana differ from other estimates because of methodological differences. The two best examples in family budget research are:

Gould, Elise, Hilary Wething, Natalie Sabadish, and Nicholas Finio. 2013. What Families Need to Get By: The 2013 Update of EPI’s Family Budget Calculator. Economic Policy Institute, Brief Paper No. 368. www.epi.org/publication/ib368-basic-family-budgets/ and

McMahon, Shawn and Jessica Horning. 2014. Living Below the Line: Economic Insecurity and America’s Families. Wider Opportunities for Women. www.wowonline.org/family-economic-security/

4 Louisiana State University (LSU) Division of Economic Development -LSU Public Policy Research Lab. 2012. Louisiana’s Uninsured Population: A Report from the 2011 Louisiana Health Insurance Survey.

5 Schoen, Cathy, Susan L. Hayes, Sara R. Collins, Jacob A. Lippa, and David C. Radley. 2014. America’s Underinsured: A State-by-State Look at Health Insurance Affordability Prior to the New Coverage Expansions. Commonwealth Fund.

6 Schwartz, Mary and Ellen Wilson. 2007. Who Can Afford to Live in a Home?: A Look at Data from the 2006 American Community Survey. U.S. Census Bureau.


—Continued on back cover


DO THE NATION’S SAFETY NET PROGRAMS ASSURE FAMILY ECONOMIC SECURITY?

Many people believe that our various government assistance programs assure family economic security. However, the history and nature of these programs is such that none of them reaches all those who are eligible for assistance. Quite the contrary: Most programs only serve as many people as Congress and/or the states provide funding for—many fewer than those who need help and fewer still after many years of state and federal budget cuts. Several major examples in Louisiana are:

RENTAL HOUSING—federal housing assistance programs provide housing or subsidize a portion of rent to help 94,200 low-income households to rent housing at an affordable cost; these families pay up to 30 percent of their income in rent. But 258,771 families have housing costs greater than 30 percent of their income and 147,855 of these have housing costs greater than 50 percent of their income.1

CHILD CARE—the federal-state Child Care Assistance Program subsidizes a portion of eligible working families’ child care costs, serving children under age 13 and disabled children under age 18. In fiscal year 2015, the program assisted 14,319 children in October 2014, down from 37,341 children in October 2008.2 The 2014 figures represent just 6.2 percent of the 231,000 children under the age of 13 in low-income working families.3

FAMILY INCOME—the federal-state Temporary Assistance to Needy Families program (formerly Aid to Families with Dependent Children) now assists an average of 6,584 families in this fiscal year, down from an average of 13,350 in fiscal year 2010.4 However, there are 129,993 families with children living in poverty in the state and assistance now is time-limited for all families. As of July 2013, the average monthly benefit for a single-parent family with three children was just $240 under Louisiana’s implementation of the Temporary Assistance for Needy Families program.5

MEDICAID—the Medicaid program provides certain medical benefits to 1,204,829 low-income people—113,826 elders, 222,829 persons with disabilities, 226,913 adults, and 641,261 children.6 Generally, it does not cover able-bodied single or married adults without children. Under the Affordable Care Act, Medicaid could cover an additional 330,000 low-income adults if the state government enacted the largely federally funded expansion. Medicaid does not include undocumented immigrants or legal immigrants who have been in the U.S. for fewer than five years.7

SNAP—the federal Supplemental Nutrition Assistance Program (formerly the Food Stamp Program) is the one program that is available to almost everyone meeting the eligibility requirements, the amount depending on the income of the person or family (and reduced twice in recent years by Congress). In fiscal year 2013, SNAP assisted an average of 940,100 recipients per month with an average benefit of $131.18 per participant.8 Unemployed persons between the ages of 18 and 50, not raising children, are limited to only three months of SNAP participation in a three-year period. Undocumented immigrants are not eligible.

These are examples of why U.S. social welfare programs often have been referred to as a “patchwork,” rather than a holistic and comprehensive support system designed to ensure economic security for poor and vulnerable families.

ENDNOTES

1 Center on Budget and Policy Priorities. 2012. Louisiana: Federal Rental Assistance Facts.

2 Louisiana Department of Children & Family Services at www.dcfs.louisiana.gov/assets/docs/searchable/OFS/Statistics/Stats14-15/CCAP/fy1415_CCAP_Totals_F.pdf.

3 Annie E. Casey Foundation, Kids Count data center at datacenter.kidscount.org/data/tables/5048-children-in-low-income-working-families-by-age-group?loc=20&loct=2#detailed/2/20/false/ 868,867,133,38,35/34,35,36/11455,11456

4 Statistics from the Louisiana Department of Children & Family Services at www.dcfs.louisiana.gov/assets/docs/searchable/OFS/Statistics/Stats14-15/FITAPKCSP/FITAP%20Only/fy1415_FITAP_Cases_R.pdf

5 Floyd, Ife and Liz Schott. 2013. TANF Cash Benefits Continues to Lose Value in 2013. Center on Budget and Policy Priorities.

6 Kaiser Family Foundation, State Health Facts, at kff.org/medicaid/ state-indicator/distribution-by-enrollment-group/?state=LA

7 330,000 uninsured adults newly eligible for Medicaid under he Affordable Care Act with incomes below 138% of federal poverty line, 154,000 males and 176,000 females. Source: Kenney, Genevieve M., Stephen Zuckerman, Lisa Dubay, Michael Huntress, Victoria Lynch, Jennifer Haley and Nathaniel Anderson. 2012. Opting in to the Medicaid Expansion under the ACA: Who Are the Uninsured Adults Who Could Gain Health Insurance Coverage? The Urban Institute.

8 Kaiser Family Foundation, State Health Facts, at kff.org/other/ state-indicator/avg-monthly-participation/?state=LA

The JCPA supports policies and programs that help move individuals and families out of poverty; that provide

work opportunities at wages that allow for self-sufficiency, adequate financial, and social service supports—

including job training, transportation, and child care services, and expansion of the Earned Income Tax Credit

(with reasonable safeguards against abuse)—and that attack problems of inadequate education, housing,

healthcare, and persistent, fundamental illiteracy.

JEWISH COUNCIL FOR PUBLIC AFFAIRS




Appendix:FAMILY ECONOMIC SECURITY MONTHLY ESTIMATES FOR LOUISIANA BY AREA1

Metropolitan Statistical Area (MSA)

State Average

New Orleans-Metairie,

LA

Baton Rouge, LA

Shreveport-Bossier City,

LA

Lafayette, LA

Houma-Thibodaux,

LA

Lake Charles,

LA

Rural Average

Housing $738 $948 $799 $757 $791 $637 $729 $668

Food $343 $343 $343 $343 $343 $343 $343 $343

Child Care $562 $607 $607 $607 $607 $607 $607 $462

Transportation $514 $507 $507 $507 $507 $485 $485 $602

Health Care $946 $1,009 $937 $937 $937 $937 $937 $928

Personal/housekeeping expenses $123 $147 $130 $125 $129 $112 $122 $115

Education and Reading $34 $40 $35 $34 $35 $30 $33 $31

Taxes $266 $342 $270 $277 $272 $244 $240 $216

Emergency savings $294 $329 $302 $299 $302 $283 $291 $280

Monthly Total $3,820 $4,272 $3,930 $3,886 $3,923 $3,678 $3,787 $3,645

Annual Total $45,840 $51,264 $47,160 $46,632 $47,076 $44,136 $45,444 $43,740

Hourly Wage $22.04 $24.65 $22.67 $22.42 $22.63 $21.22 $21.85 $21.03

1 Additional tables available at www.loyno.edu/jsri/

Married Couple Family with One Child

Metropolitan Statistical Area (MSA)

State Average

New Orleans-Metairie,

LA

Baton Rouge, LA

Shreveport-Bossier City, LA

Lafayette, LA

Houma-Thibodaux,

LA

Lake Charles,

LA

Rural Average

Housing $738 $948 $799 $757 $791 $637 $729 $668

Food $585 $585 $585 $585 $585 $585 $585 $585

Child Care $562 $607 $607 $607 $607 $607 $607 $462

Transportation $655 $641 $641 $641 $641 $637 $637 $747

Health Care $1,293 $1,445 $1,269 $1,269 $1,269 $1,269 $1,269 $1,257

Personal/housekeeping expenses $151 $175 $158 $153 $157 $139 $150 $143

Education and Reading $41 $48 $43 $42 $43 $38 $41 $39

Taxes $239 $323 $253 $247 $242 $223 $223 $167

Emergency savings $355 $398 $363 $358 $361 $345 $353 $339

Monthly Total $4,619 $5,170 $4,718 $4,659 $4,696 $4,480 $4,594 $4,407

Annual Total $55,428 $62,040 $56,616 $55,908 $56,352 $53,760 $55,128 $52,884

Hourly Wage (1 worker) $26.65 $29.83 $27.22 $26.88 $27.09 $25.85 $26.50 $25.43

Hourly Wage (2 workers) $13.32 $14.91 $13.61 $13.44 $13.55 $12.92 $13.25 $12.71

Protecting the poor and vulnerable is a fundamental value of this country and a

cornerstone of the Christian faith. Our churches provide assistance and services

to those in need in the United States and abroad, but these ministries cannot

stand alone.

EPISCOPAL CHURCH

Single Mother with One Child

JustSouth Quarterly, Winter 2014

METHODOLOGY

TOO MUCH FOR TOO

MANY:

What does it cost families

to live in Louisiana?

COSTS – All costs and totals are presented in 2014 inflation-adjusted dollars.

FAMILIES – Single-parent families are assumed to be headed by a single female adult, and two-parent families are assumed to be headed by a male and female adult couple. Together, they represent 92.4 percent of Louisiana families with children.

CHILD AGES – Assumed to be 2-years-old for a single child; 2-years-old and 6-years-old for two children; and 2-years-old, 6-years-old, and 12-years-old for three children. These ages represent the general

age distribution of children in Louisiana based on the 2013 American Community Survey: under 6 years of age (33.5 percent), 6 to 11 years of age (34 percent), and 12 years of age and above (32.5 percent).

METRO AREAS – Metropolitan statistical areas (MSAs) are based on areas developed by the U.S. Census and the White House. Metropolitan statistical areas require at least one urbanized area of

50,000 people or more and an adjacent territory with a high degree of social and economic integration with the core as measured by commuting ties. Areas below the top six metropolitan statistical areas were aggregated to form a rural average. Source: U.S. Office of Management and Budget (OMB). 2014. OMB BULLETIN NO. 13-01 - Revised Delineations of Metropolitan Statistical Areas, Micropolitan Statistical Areas, and Combined Statistical Areas, and Guidance on Uses of the Delineations of These Areas. www.whitehouse.gov/sites/default/files/omb/bulletins/2013/b-13-01.pdf

Metro Area Parish

Baton Rouge, LA Ascension Parish, East Baton Rouge Parish, East Feliciana Parish, Iberville Parish, Livingston Parish, Pointe Coupee Parish, St. Helena Parish, West Baton Rouge Parish, West Feliciana Parish

Houma-Thibodaux, LA Lafourche Parish, Terrebonne Parish

Lafayette, LA Acadia Parish, Iberia Parish, Lafayette Parish, St. Martin Parish, Vermilion Parish

Lake Charles, LA Calcasieu Parish, Cameron Parish

New Orleans-Metairie, LA Jefferson Parish, Orleans Parish, Plaquemines Parish, St. Bernard Parish, St. Charles Parish, St. James Parish, St. John the Baptist Parish, St. Tammany Parish

Shreveport-Bossier City, LA Bossier Parish, Caddo Parish, De Soto Parish, Webster Parish

Rural Average Allen Parish, Assumption Parish, Avoyelles Parish, Beauregard Parish, Bienville Parish, Caldwell Parish, Catahoula Parish, Claiborne Parish, Concordia Parish, East Carroll Parish, Evangeline Parish, Franklin Parish, Jackson Parish, Jefferson Davis Parish, La Salle Parish, Lincoln Parish, Madison Parish, Morehouse Parish, Natchitoches Parish, Red River Parish, Richland Parish, Sabine Parish, St. Landry Parish, St. Mary Parish, Tangipahoa Parish, Tensas Parish, Union Parish, Vernon Parish, Washington Parish, West Carroll Parish, Winn Parish

HOUSING – Includes the cost of shelter and tenant-paid utilities with the exception of telephone, Internet, and cable/satellite television services; assumes a two-bedroom home for families with

one or two children and a three-bedroom home for families with three children. Housing cost is based on the U.S. Department of Housing and Urban Development (HUD) Fair Market Rents (FMRs) estimates for the 40th percentile of rent cost for a given MSA. Source: U.S. Department of Housing and Urban Development (HUD). 2014. 2014 Fair Market Rents Dataset, county-level data file. www.huduser.org/portal/datasets/fmr.html

FOOD – Food plans are based on a low-cost food plan designed by the U.S. Department of Agriculture that assumes all food is purchased from a grocery and prepared at home. The cost

of food represents a national average and does not vary by location but does vary by family composition and age. Source: U.S. Department of Agriculture Center for Nutrition Policy and Promotion (USDA). 2014. Cost of Food at Home: U.S. Average at Four Cost Levels. [data tables, July 2014 annual average]. www.cnpp.usda.gov/USDAFoodCost-Home.htm

10

All children have a right to economic security and economic justice, meaning that all families have

access to nutritious food, clothing, transportation and safe, affordable housing, (in addition to high

quality education, affordable, accessible health care, and other basic needs noted elsewhere in this

document) and that all families have equal opportunities to provide these basic economic needs.

NATIONAL COUNCIL OF CHURCHES OF CHRIST


CHILD CARE – Child care costs are presented in 2014 inflation-adjusted dollars based on the 75th percentile weekly rate for center-based care at a

Class A center. The 75th percentile weekly rate of the most recent year’s market rate survey was used, because it is the federally recommended subsidy rate to provide equal access to child care. Child care for toddlers (2-years-old) is based on weekday care rates, and school-aged children 6 years old and up is based on weekly rates for before- and after-school care. Source: Care Solutions, Inc. 2012. Louisiana Child Care Market Rate Survey 2012. www.dcfs.louisiana.gov/assets/docs/searchable/ChildDevEarlyLearning/CCDF/30396_2012-LAMarketRate_FINAL_100512.pdf

TRANSPORTATION –Transportation costs are presented in 2014 inflation-adjusted dollars based on average distance traveled and standard mileage rates using the methodology

of the Economic Policy Institute’s (EPI) “2013 Family Budget Calculator”. The EPI method estimates the total annual miles driven for work and non-social purposes for different MSAs using the Federal Highway Administration (FHWA) 2009 National Household Travel Survey and then determines the cost of operating the vehicle using the Internal Revenue Service’s (IRS) standard mileage rate. We use the IRS 2013 standard mileage rate of 56.5 cents per mile. This method may overstate transportation costs for areas with populations that primarily use public transportation systems. However, the majority of Louisiana’s population does depend on motor vehicle transportation and not public transportation systems. Sources: Gould, Elise, Nicholas Finion, Natalie Sabadish, and Hilary Wething. 2013. Economic Policy Institute 2013 Family Budget Calculator Technical Documentation. Economic Policy Institute. www.epi.org/publication/wp297-2013-family-budget-calculator-technical-documentation/; Federal Highway Administration (FHWA). 2009. National Household Travel Survey (NHTS). Tabulation created on the NHTS website: nhts.ornl.gov.; and Internal Revenue Service (IRS). 2012. IRS Announcement R-2012-95, Standard Mileage Rates for 2013. www.irs.gov/uac/Newsroom/2013-Standard-Mileage-Rates-Up-1-Cent-per-Mile-for-Business,-Medical-and-Moving

HEALTH CARE – Health care considers the total costs, in 2014 inflation-adjusted dollars, for total insurance premiums and total out-of-pocket costs from the

U.S. Department of Health and Human Services (HHS) 2013 Medical Expenditure Panel Survey using the methodology of the Economic Policy Institute’s (EPI) “2013 Family Budget Calculator”. Estimated costs of premiums are based on the total cost of an employer-sponsored insurance plan, not just the employee contributions, for the lowest 25th percentile and out-of-pocket costs for families with employer-sponsored plans. This estimate is more conservative than individual insurance plans for families. Sources: Gould, Elise, Nicholas Finion, Natalie Sabadish, and Hilary Wething. 2013. Economic Policy Institute 2013 Family Budget Calculator Technical Documentation. Economic Policy Institute. www.epi.org/publication/wp297-2013-family-budget-calculator-technical-documentation/; and U.S. Department of Health and Human Services (HHS). 2013. Medical Expenditure Panel Survey. MEPS HC-138: 2010 Full Year Consolidated Data File [microdata]. meps.ahrq.gov/data_stats/download_data_files_detail.jsp?cboPufNumber=HC-138; U.S. Department of Health and Human Services (HHS). 2013. Medical Expenditure Panel Survey. “Table IX.A.2 (2011), Average Total Premiums and Employee Contributions (in Dollars) for Private-Sector Establishments for Areas Within States: United States, 2011.” meps.ahrq.gov/mepsweb/data_stats/summ_tables/insr/state/series_9/2011/ tixa2.pdf; and Bureau of Labor Statistics (BLS). 2013. Employee Benefits Survey. “Table 14. Medical Care Benefits, Family Coverage: Employer and Employee Premiums by Employee Contribution Requirement, Private Industry Workers, National Compensation Survey, March 2012.” www.bls.gov/ncs/ebs/benefits/2012/ownership/private/table09a.htm

PERSONAL AND HOUSEKEEPING EXPENSES – Apparel, personal goods and

services, and housekeeping goods and services costs are based on the average share cost relative to food

and housing costs for the bottom 40th percentile of income earners as determined by the Bureau of Labor Statistics (BLS) 2013 Consumer Expenditure Survey. Source: Bureau of Labor Statistics (BLS). 2013. Consumer Expenditure Survey. Annual Calendar Year Tables Current Expenditure Tables. www.bls.gov/cex/#tables

EDUCATION AND READING EXPENSES– Reading and education costs

are based on average share cost relative to food and housing costs for the bottom 40th percentile

of income earners as determined by the Bureau of Labor Statistics (BLS) 2013 Consumer Expenditure Survey. Source: Bureau of Labor Statistics (BLS). 2013. Consumer Expenditure Survey. Annual Calendar Year Tables Current Expenditure Tables. www.bls.gov/cex/#tables

TAXES – Taxes are presented in 2014 inflation-adjusted dollars and include federal, state, FICA tax liabilities using the methodology

of the Economic Policy Institute’s (EPI) “2013 Family Budget Calculator”. Unlike the EPI tax estimate we include a sales tax of 9% for personal and housekeeping expenses as well as reading and education expenses, except for the Lafayette MSA with a sales tax of 8 percent. Sources: Gould, Elise, Nicholas Finion, Natalie Sabadish, and Hilary Wething. 2013. Economic Policy Institute 2013 Family Budget Calculator Technical Documentation. Economic Policy Institute. www.epi.org/publication/wp297-2013-family-budget-calculator-technical-documentation/; and National Bureau of Economic Research (NBER). 2013. TAXSIM Model Version 9.2 with ATRA. nber.org/~taxsim/taxsim-calc9/

EMERGENCY SAVINGS – Assumes what families should save over a 12-month period to cover one complete month’s expenses due to

possible loss of income.

We embrace the church’s call to

care for the poor. The government

also shares in this responsibility.

Basic decency requires that we

assist those who lack the bare

essentials for survival. Prudence

dictates that we help the poor

reach their full potential as

productive, tax-paying citizens.

NATIONAL ASSOCIATION OF EVANGELICALS

Jesuit Social Research Institute6363 St. Charles Avenue, Box 94New Orleans, LA 70118-6143

(504) 864-7746e-mail: [email protected]/jsri

Connect with us!

NonprofitOrganizationU.S. PostagePAIDNew Orleans, LAPermit No. 213

THE MISSION OF THE JESUIT SOCIAL RESEARCH INSTITUTEThe Jesuit Social Research Institute works to transform the Gulf South through action research, analysis, education, and advocacy on the core issues of poverty, race, and migration. The Institute is a collaboration of Loyola University New Orleans and the Society of Jesus rooted in the faith that does justice.

JustSouth is published quarterly by the Jesuit Social Research Institute, College of Social Sciences, Loyola University New Orleans,6363 St. Charles Avenue, Box 94, New Orleans, LA 70118

The JustSouth Monthly is published 12 times a year and is available upon request without charge at [email protected] 2014 © Jesuit Social Research Institute. ISSN 2161-315X

JustSouth Quarterly one-page articles are available free at loyno.edu/jsri/catholic-social-thought

8 In Louisiana, a two-week loan of $350 carries an annual percentage rate (APR) of more than 400 percent, further exacerbating the existing financial hardships of borrowers and their families. Source: Mikulich, Alex. Spring 2014. “Six Myths of Payday Lending.” Just South Quarterly. Jesuit Social Research Institute.

9 Our approach to emergency savings differs from the emergency savings calculations of McMahon and Horning. 2014.

10 Ibbotson, Roger, James Xiong, Robert P. Kreitler, Charles F. Kreitler, and Peng Chen. 2007. “National Savings Rate Guidelines for Individuals.” Journal of Financial Planning.


12 Ibid.

13 Bureau of Labor Statistics (U.S. Department of Labor) Occupational Employment Statistics program. 2014. Current Employment and Wages [database]. www.bls.gov/oes/

14 Bureau of Labor Statistics (U.S. Department of Labor) Current Population Survey program. 2014. Weekly and Hourly Earnings [database]. www.bls.gov/cps/

15 Bureau of Labor Statistics (U.S. Department of Labor) Current Population Survey program. 2014. Labor Force Statistics including the National Unemployment Rate [database]. www.bls.gov/cps/

16 Cf. Gratiam, Decretum, C. 21, dist. LXXXVI (ed. Aemilius Friedberg I, 1879).

17 National Conference of Catholic Bishops. 1986. Economic Justice for All. United States Catholic Conference, No. 79. and

Pope John XXIII. 1963. Pacem in Terris (On Establishing Universal Peace in Truth, Justice, Charity, and Liberty), No. 20.

18 Hollenbach, David. 1977. “Modern Catholic Teachings Concerning Justice,” in John C. Haughey ed., The Faith That Does Justice. Paulist Press. Pp. 207-231. and

Pieper, Josef. 1966. The Four Cardinal Virtues. University of Notre Dame Press. Pp. 43-116.

19 National Conference of Catholic Bishops. 1986. Economic Justice for All. United States Catholic Conference, No. 77.

20 Pope Leo XIII. 1891. Rerum Novarum (On the Condition of Workers), No. 62.

21 Pope John XXIII. 1961. Mater et Magistra (On Christianity and Social Progress), No. 109.;

Second Vatican Council. 1965. Gaudium et Spes (Pastoral Constitution on the Church in the Modern World), No. 34. and

Holy See. 1983. Charter of the Rights of the Family, No. 10.

22 Pope John Paul II. 1981. Laborem Exercens (On Human Work), No. 18-19.

23 Economic Justice for All. op.cit., No. 70.

24 Economic Justice for All. op. cit., No. 74.

25 Gray, David. 2014. Louisiana Needs a Higher Minimum Wage. Louisiana Budget Project.

26 Center on Budget Policy and Priorities. 2014. Louisiana Fact Sheet: Tax Credits Promote Work and Fight Poverty.

27 Tax Foundation. 2014. Facts on Louisiana’s Tax Climate. taxfoundation.org/state-tax- climate/louisiana

28 Marr, Chuck, Chye-Ching Huang, and Arloc Sherman. 2014. Earned Income Tax Credit Promotes Work, Encourages Children’s Success at School Research Finds. Center on Budget Policy and Priorities.

29 330,000 uninsured adults newly eligible for Medicaid under the Affordable Care Act with incomes below 138% of federal poverty line, 154,000 males and 176,000 females. Source: Kenney, Genevieve M., Stephen Zuckerman, Lisa Dubay, Michael Huntress, Victoria Lynch, Jennifer Haley and Nathaniel Anderson. 2012. Opting in to the Medicaid Expansion under the ACA: Who Are the Uninsured Adults Who Could Gain Health Insurance Coverage? The Urban Institute.

30 Louisiana Department of Health and Hospitals. 2013. Understanding the Impact of a Medicaid Expansion in Louisiana: Considerations, Assumptions and Uncertainties White Paper.

31 Families USA. 2013. Louisiana’s Economy Will Benefit from Expanding Medicaid.

32 Ibid.

33 Kim, Marlene. 1999. Problems Facing the Working Poor. U.S. Department of Labor.


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