Safety Net

When You Live in Poverty, You Probably Pay More for Baby Supplies

When you have a baby, everyone tells you how expensive your life will become. They aren’t wrong: between child care, diapers, formula, and baby supplies, some weeks it feels like most of my paycheck is consumed by my seven-month-old son. When I’m shopping, one of the first things I do is pull out my calculator to figure out the cheapest option. It quickly becomes apparent how much you can save by buying in bulk. For many families with low incomes, however, buying in bulk simply isn’t an option—saving money costs money.

Despite what some conservatives might have you believe, there are very few financial supports in place for families with young children that assist with the purchase of baby supplies. Families with low incomes are doubly penalized in that they have fewer resources to spend, and therefore pay more for basic supplies because they can’t buy in bulk or purchase memberships at wholesale stores.  In contrast, I have annual memberships with Costco and Amazon Prime and a car that allows me to shop around to find the best deals.

I decided to spend a week tracking just how much my husband and I save on baby supplies due to economic privilege. I tallied what we spent and compared our costs to what a low-income parent would need to spend for the same items at stores in our neighborhood.

Diapers and wipes

I’m able to purchase diapers for $0.22 apiece through a discounted online delivery service that requires a monthly fee for subscription. By comparison, a small package of diapers costs $0.36 per diaper at the local grocery store. At 60 diapers per week, I save $8 per week on diapers. Similarly, we buy our wipes at Costco and save $1.00 per week.

Additional cost for low-income parents: $9

Food

We buy our formula at a big box store and stock up when they have a sale. Recently, they had a $25 rebate for shopper who spend $100 or more. A great bargain for us, but $100 is easily a quarter of what a minimum wage worker makes in a week. Our total for formula comes to $20 per week, compared to $29 per week at our local grocery store. Breast milk is also far from free. A pump, bottles, and other supplies can easily cost hundreds of dollars per month. And that assumes that a minimum wage job provides adequate breaks to pump and a place to store the milk, neither of which is common among low-wage jobs.

Solid food for babies is much cheaper to puree at home than to buy at the grocery store. I have a food processor, dish washer, refrigerator, and storage containers that make baby food production relatively easy. For $5, I bought enough food for a one-week supply of meals. To buy the same amount of jarred food at the grocery store costs $18.

Additional cost for low-income parents: $22

Baby supplies

I have a credit card that allows me to accrue points that I can spend on Amazon, which provides $30 to $50 per month (or about $10 per week) in free goods. In the last six months alone, I’ve gotten swaddles, laundry detergent, diaper cream, and bottles—all for free. Many parents in poverty do not have the necessary credit or income to qualify for a credit card, let alone one that provides rewards. And as a result of credit discrimination, people of color often have lower credit scores that might otherwise facilitate credit cards with these kinds of perks.

Additional cost for low-income parents: $10

All told, my family saved about $41 per week compared to what a minimum wage worker would likely spend. While that might seem like a small amount for a family with a lot of disposable income, it adds up to more than $2,000 a year and over 10 percent of total annual income for a family of three living at the poverty line. That means in D.C., where the minimum wage is $10.50 per hour, a worker earning that amount would need to work approximately 200 additional hours a year just to buy the same items.

Last year, the Center for American Progress proposed a Young Child Tax Credit that would invest in families when income matters most for children’s long-term outcomes and family budgets are often most strained. Representatives Nancy Pelosi and Rosa DeLauro introduced legislation that would create such a credit, as did Senator Michael Bennet.

This kind of reform would not only help all families afford the critical items they need to thrive, it would also mark a step forward in ensuring that people in poverty no longer have to pay more than other consumers for the things that all families need.

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Safety Net

The Hidden Costs of a College Education

Over the past few weeks, students across the country, myself included, have received their college diplomas. When I set out to purchase a cap and gown for my graduation ceremony, I was immediately taken aback by its steep price tag: $150. These flimsy pieces of fabric are only worn once, but for many students this purchase creates a hole in their wallets felt long after the festivities have ended.

The rising cost of tuition over the past few decades has been well-documented, and all students, particularly those from low-income families, are increasingly unable to pay. But as analysts at the Wisconsin HOPE Lab have pointed out many times in recent years, tuition costs alone don’t reveal the full picture of how expensive it has become to get an education. In fact, tuition is only about one-third to two-thirds of the cost of a college degree, and students continue to be nickel and dimed even after they’ve paid their tuition bill. As the many facets of postsecondary education get pricier, the average low-income student is faced with expenses that exceed any financial aid they may receive. At a public four-year institution, this gap is about $12,000. At a private nonprofit four-year school, it’s $19,520.

Take housing. At over $10,000 a year, on-campus housing comprises anywhere from 24 to 42 percent of total student budgets. Meanwhile, the cost of off-campus housing surrounding universities tends to be higher than standard market rent. These steep costs have consequences. One survey conducted by the City University of New York found that 42 percent of their undergraduate students had experienced housing insecurity within the past year.

In many cases, housing insecurity is coupled with food insecurity. In one study, 59 percent of students at a four-year university in Oregon experienced food insecurity, compared to only 14.9 percent of the general population. And it makes sense: on college campuses, affordable options are often limited. At my own school, the University of Maryland, the average meal plan costs $2,185.39 a year. In a 15-week semester, this amounts to $145.69 a week, or roughly the same amount as the average monthly Supplemental Nutrition Assistance Program (SNAP) benefit. Yet despite high levels of food insecurity, college students have a hard time accessing SNAP at all.

In addition, the academic supplies that students need, such as textbooks and other supplemental course materials, can increase a student’s annual bill significantly. The University of Maryland estimates a student will pay an extra $1,130 a year for books and supplies. And prices are only going up. The average cost of a new textbook increased $22 between 2007 and 2013.

Finally, couple these expenses with the fees associated with student organizations, whose costs are unpredictable and can fall anywhere between $10 and somewhere in the quadruple digits. Texas A&M University lists that dues for certain sports clubs could be as high as $2,500. At some schools, Greek life is the primary vehicle for student involvement and can cost close to an additional $10,000 a year.

Given the changing demographics of the student population, these kinds of financial sacrifices should not be viewed nonchalantly. Between 1982 and 2012, the proportion of low-income students attending college jumped by 18.1 percentage points, compared to just 10 points for high-income students. The rate of first-generation students and students of color—who are far more likely to come from low-income families—is growing and is projected to continue to do so.

There has been considerable political momentum among progressives in favor of reduced or even free college tuition, which would enable students to channel more resources into necessities like housing, food, and textbooks. But until that’s achieved, we should seek to improve programs that are currently available. For example, most college students attending at least half-time are not eligible for SNAP unless they work at least 20 hours per week, take part in a work-study program, have young children, or meet certain other requirements. However, working 20 hours a week has been shown to lengthen the time it takes to graduate, increase college costs, and heighten the risk of dropping out. As suggested by the Wisconsin HOPE Lab, aligning SNAP with needs-based student financial aid and making it more accessible to students is key to combating campus food insecurity.

Students continue to be nickel and dimed even after they’ve paid their tuition bill.

Policymakers also need to pay more attention to housing instability among undergraduates. There is currently no standard method for determining cost of living allowances, which can impact how much assistance off-campus students receive. Low-ball estimates of living costs can also hinder students’ ability to plan financially, making them more susceptible to hardship. In fact, fully 30 percent of two-year institutions have set their allowances at more than $3,000 below the actual living cost. If campuses were to use a consistent measure across the board to estimate housing costs—for example, the Department of Housing and Urban Development’s (HUD) suggests its Fair Market Rent data—they could more effectively tailor efforts to meet their students’ actual needs.

Finally, in order to better serve students, the government should remove counterproductive red tape within its programs. Federal student loan regulations prevent schools from disbursing Direct Loan aid to first-year, first-time borrowers until 30 days after the first day of classes. This policy makes it extremely difficult for students to secure off-campus housing before the school year begins, as many properties require a substantial security deposit as well as first- and last-month’s rent. Moreover, HUD should revise its eligibility criteria for subsidized housing, which treats means-tested student financial assistance for fees, books, supplies, and other essential education expenses as income, thereby forcing some students to turn down additional aid in favor of loans to remain eligible.

Ultimately, we have to shed the assumption that all students are immune to financial burdens because they have unlimited access to their parents’ bank accounts. In the midst of encouraging everyone to attend college, we haven’t considered how students are expected to excel in their studies if they can’t purchase the necessary course materials or meet basic needs. Every student deserves to feel the pride in standing in front of their families, friends, and peers to receive their diploma. And yet, writing that $150 check for a cap and gown is sometimes just one more unanticipated barrier on the way toward getting a college education.

This article has been updated since the original post.

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Labor

Why the Tipped Minimum Wage Forces Me to Endure Harassment

I was recently harassed while working as a server at Olive Garden.

It was a very busy weekend, and I was told to pick up a table outside of my section.  A few minutes later I greeted the group of white, well-dressed guests seated at the table.  One of them, an older gentleman, grabbed my arm and said, “There goes your tip! I guess we’ll take you out back and give you 30 lashes.”

I felt my blood begin to boil. I walked away, declining to wait the table. I knew that this refusal would cost me money—but I didn’t want to accept harassment in order to earn a living.

I had a similar experience while working at Denny’s on Christmas Day. The restaurant was completely dead, and the one table I served gave off an impression that they had just had an altercation at a family get-together. The father asked for a steak so rare it was bleeding. When I served it, he took one look and bellowed, “This steak is frozen! How am I supposed to eat that?” He then threw it at my head.

I didn’t want to accept harassment in order to earn a living.

These experiences haven’t happened in isolation. Incidents like these are the kinds of things servers endure to receive a good tip—or any tip at all. Because the federal tipped minimum wage has remained at $2.13 an hour for the past 25 years, servers are more likely than other workers to live in poverty and rely on some form of public assistance to make ends meet. All the while, multi-billion dollar corporations like Darden (the parent company of Olive Garden) get away with their customers or the government making up the difference through tips or public assistance.

Indeed, having your livelihood dependent on tips creates economic instability. Even when I put in the same number of hours from one month to the next, my earnings can differ by hundreds of dollars. If I have a slow week, I have to put off bills and pay late fees that I can’t afford. I often go from feeling like my family is getting by to wondering if the utilities will be turned off.

Working for tips also devalues the labor of people in the service industry. Servers are paid varying amounts every day based on whether someone else thought they deserved to make enough money to pay their bills or feed their children. You can provide great service to a customer, but if he doesn’t want to pay a decent tip, you lose.

I’ve come to this conclusion: Tips are referred to as gratuity for a reason. They are not meant to substitute for an actual wage.

But this isn’t a problem that should be rectified by the restaurant customer. As social media has come into vogue, I’ve started seeing posts about once a week about how a server at a restaurant was either grossly under-tipped or completely stiffed. The message is usually meant to shame the person who did not tip well and to promote awareness of the economic hardship that it causes. But, instead of fighting for people to tip more, we should be urging our state representatives to eliminate the tipped minimum wage and ensure that restaurants pay all of their workers livable wages.

We sorely need one fair wage for all working Americans. Despite conservative arguments that increases in wages cost jobs, cities like San Francisco that have eliminated the tipped minimum wage have actually seen positive job growth. In fact, raising the minimum wage can boost the wages for workers who earn more than the minimum wage, too. And, if a worker puts in a solid 40-hour workweek, shouldn’t she be able to afford the basic necessities to live?

Change can be unsettling, sure—but even more frightening, for tipped workers like me, is the thought of no change. We need to bridge the gap between those who are profiting in the food industry and their employees who are not, and fight for one fair wage.

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Safety Net

Want to Reduce Child Hunger? Make Corporations Pay Taxes on Overseas Profits

This article was originally published by the Center for American Progress.

In 2014, 46.7 million Americans—more than one in seven—lived in poverty, and nearly half of Americans will experience at least a year of poverty or near-poverty during their working years. Along with causing tremendous human hardship and suffering, poverty is enormously costly to the United States. It hampers educational attainment, reduces health, decreases workforce productivity, and damages the social cohesion of communities. Child poverty alone costs the United States an estimated $672 billion every year—nearly 4 percent of U.S. gross domestic product.

Poverty is not inevitable, particularly not in the richest nation on earth. Rather, its persistence is in large part a result of misplaced priorities and deliberate policy choices. Indeed, it has already been shown—in both past experience and extensive research—that policy choices can make a difference in the lives of low-income families, helping them reach and remain in the middle class. Recently, however, politicians and policymakers have lacked the political will to make many of these policies a priority.

Most good policies are not costless. But the price tags for many poverty-reducing programs pale in comparison with the billions of dollars the United States already spends on tax breaks that primarily benefit wealthy individuals and corporations—funds that could be used to provide adequate nutrition or access to high-quality child care, reduce homelessness, or invest in low-income children and workers. What’s more, the price tags of smart policies do not reflect the substantial public savings the nation experiences from investments that improve health, increase educational attainment, enhance workforce productivity, and boost the economy. To take just one example, every dollar spent on benefits in the Supplemental Nutrition Assistance Program, or SNAP, generates an estimated $1.70 in additional economic activity.

The United States can afford to dramatically reduce poverty and increase economic opportunity. Here are four ways in which the U.S. Congress could make an enormous dent in poverty and the opportunity gap—each costing significantly less than the tax breaks Congress currently gives to the wealthy.

Boost effective tax credits for low-income workers and families

BudgetChoices_webfig1The Earned Income Tax Credit, or EITC, is one of the nation’s most effective anti-poverty tools, encouraging work and boosting family income. In 2014, it helped more than 6.2 million Americans—including 3.2 million children—avoid poverty. However, low-income workers without qualifying children receive very little help from the EITC; indeed, these so-called childless workers are the only group whom the tax code taxes further into poverty. Lawmakers across the political spectrum—including Speaker of the U.S. House of Representatives Paul Ryan (R-WI)—have long called for improving the EITC for childless workers. President Barack Obama’s and Speaker Ryan’s similar proposals, which would double the maximum credit to more than $1,000 and lower the minimum age of eligibility from 25 to 21, would help nearly 13 million workers, lifting more than half a million people out of poverty.

The Child Tax Credit, or CTC, delivers a credit of up to $1,000 per child to families with children. The credit protected about 3 million people from poverty in 2015, including 1.6 million children. Because it is not fully refundable, however, the CTC misses the poorest children entirely, and only about 20 percent of the CTC’s benefits go to families who earn less than $30,000, compared with 60 percent of the EITC.

Expanding the CTC—as proposed by the Center for American Progress in a recent report—would ensure that the credit does not skip the families who need it most. The proposal would also create a supplemental credit—delivered monthly—for families with children younger than age 3. This would nearly double the number of children younger than age 17 who are lifted out of poverty by the CTC and would protect more than two-and-a-half times as many children younger than age 3 from poverty than does the current law.

Reduce hunger and food insecurity

BudgetChoices_webfig2Each year, SNAP benefits, formerly known as food stamps, protect millions of struggling Americans from poverty, including children, individuals with disabilities, seniors, and low-wage working families. SNAP’s nutrition assistance also boosts health outcomes, educational attainment, and earnings over the long term. Currently, the value of SNAP benefits is based on the Thrifty Food Plan, the lowest-cost of the four food plans developed by the U.S. Department of Agriculture, or USDA. At an average of just $1.41 per person for each meal, SNAP benefits—while critical—provide only the “bare bones” of nutritional adequacy. Many families are unable or barely able to stretch these modest benefits until the end of the month: Recipients use nearly 80 percent of SNAP benefits within the first half of each month. Switching to the Low-Cost Food Plan, the second lowest-cost of the USDA’s four plans—would increase SNAP benefits 30 percent. This would dramatically reduce hunger, food insecurity, and poverty, as well as boost long-run economic mobility for struggling families.

End homelessness

BudgetChoices_webfig3Homelessness and housing instability are leading causes—and consequences—of poverty. On any given night in 2015, more than 560,000 Americans faced homelessness, a problem primarily caused by a lack of affordable housing. The housing voucher program plays a crucial role in keeping at-risk households stably housed, yet 3 in 4 eligible families receive no housing assistance due to scant funding.

The Bipartisan Policy Center’s Housing Commission calls for reforming and expanding the Housing Choice Voucher program in order to end homelessness in the United States. Their proposal would provide rental assistance to all 3 million currently unassisted renting households that are extremely low income and cost burdened, meaning that they spend more than 30 percent of their income on housing and utilities.

Allow all families to access high-quality child care for their children

BudgetChoices_webfig4

Child care is an economic necessity for most families with children: 65 percent of children younger than age 6 have all of their available parents in the workforce. But its cost is prohibitive for many families and especially for low-income families. In 37 states and the District of Columbia, the annual cost of child care for an infant is more than half of what a full-time, minimum-wage worker in that state earns. Existing child care assistance reaches only a small portion of eligible families and is much lower than actual child care costs.

Unable to forego critical income from work, many parents have little choice but to seek out low-quality care, potentially putting their children’s health, safety, and development at risk. The Center for American Progress recently proposed a tax credit that would expand access to affordable high-quality child care, allowing more low-income parents to participate in the work force while promoting their children’s healthy development. High-quality child care is an investment in the nation’s human capital: It increases children’s school readiness and reduces the educational disparities—based on socioeconomic status—that can be predicted long before a child even starts kindergarten.

Conclusion

Radically reducing poverty in America may sound like a costly proposition. But compared with the billions of dollars that lawmakers give away to the wealthy each year, Congress could make a huge dent in poverty at a bargain price. What’s more, investments that reduce poverty today will provide enormous economic opportunity for generations to come. Prioritizing the nation’s struggling families is an investment Americans cannot afford not to make.

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Media and Politics

What the Media and Congress Are Missing on Zika and Poverty

Where is the sense of urgency?

In recent weeks, that is the question I continuously find myself asking as I read media accounts of Zika and follow the funding debate in Congress.

Somewhere along the way the focus shifted.  What began as coordinating a response to Zika that is rooted in smart public health policy and caring for our fellow citizens became a funding fight on Capitol Hill in which many conservatives seem completely divorced from reality—particularly the reality of low-income women and children of color living in the South.

This disconnect is not due to a lack of information.  Indeed, lawmakers know well that the Centers for Disease Control and Prevention (CDC) has found that Zika will likely wreak disproportionate havoc on the southern United States. Due to an increase in summer mosquito populations, the South could be a breeding ground for Zika transmission.  Moreover, as the summer months approach, the CDC reports that the number of Zika cases is on the rise.

The Obama Administration certainly hasn’t ignored the urgency of this moment. In February, the Administration announced a $1.9 billion plan to track transmission of the virus, increase testing, institute vaccine research, and prioritize access to health care for low-income pregnant women who are at-risk.  Since then, the President has met with governors from each state and announced a coalition of public health experts and local and national decision-makers who will work together to address transmission of the virus. Yet proposals in the House and Senate both fall well short of what is needed to address the current public health threat.

As the CDC has made clear, the most common way to contract Zika is simply through bites from infected mosquitos. The virus thrives in warm environments with standing water, making low-income people in the South who live in homes without air conditioning, or lack door and window screens, particularly vulnerable.  Additionally, people working jobs that require extended periods of time outside—such as farmworkers and other predominately low-wage workers—are more likely to be exposed to the virus.  Zika can also be transmitted sexually by men to their partners.

In the South, poverty stricken communities overwhelmingly include people of color who lack access to the kinds of things that will help protect wealthier populations—like health education, livable wages, adequate shelter, and other social support services. Being economically disadvantaged also often translates to a lack of access to comprehensive health services, including reproductive and maternal health care and pediatric care. This is particularly important with regard to Zika, since transmission of the virus among pregnant women can lead to severe birth defects in fetuses, including a congenital brain condition known as microcephaly which can result in developmental disabilities in children.

There is currently no treatment available for microcephaly. Over time, the direct costs associated with caring for a child with the condition could easily exceed hundreds of thousands of dollars for a family—including costs for child care, health care, and lost wages due to providing for a child with a disability.  Expenses like these will increase hardship for low-income families who are already living on the brink.

That is why low-income women need comprehensive counseling and access to the full range of contraceptive methods to prevent unplanned pregnancy right now. Both male and female condoms must be made widely available.  When pregnant women test positive for Zika and want to carry their pregnancies to term, timely prenatal and postnatal care are critical.  Low-income women of color are more likely to delay care and medical treatment for many reasons, including a lack of access to healthcare, no paid leave at work, or inadequate childcare options.  In the event that a woman has to make the decision to terminate her pregnancy, safe abortion should be part of the full continuum of reproductive health care options made available.

With funding for these urgent needs currently held up in Congress, state and local public health responders have been slow to scale plans at the community level. Many local health systems are already operating under strained or inadequate resources, both programmatically and financially, and they need the federal government to step up and respond to these pressing public health concerns.  It comes down to this: we simply do not have time to waste.

What will it take for Congress to recognize the urgency in addressing Zika? We have the opportunity, resources, and plans to protect the American people from this virus.  However, without access to necessary comprehensive health care and social support services, low-income women and families could be looking at even deeper levels of poverty and poorer health outcomes on the horizon.

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