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November 6, 1997

Living wage should be higher than federal poverty thresholds show, according to UCSUR study

The number of people in Pittsburgh and Allegheny County who ought to be considered poor is much greater than federal poverty lines would indicate, according to a new Pitt study.

Researchers at the University Center for Social and Urban Research (UCSUR) are proposing new, basic cost-of-living standards to replace current federal poverty thresholds, which are regularly updated for inflation but are based on 1950s consumption patterns.

In a report released last week, the UCSUR researchers conclude that, "In general, the number of low-income children and working-age adults in the city and county is 2 to 2.5 times official poverty estimates." In 1990, about 200,000 Allegheny County adults aged 18-64 (nearly a quarter of the county's working age population) and 110,000 children (39 percent of county children) lived in households with too little income to meet basic needs, the study stated.

Just over half of the low-income adults were employed, and 42 percent of these "working poor" held full-time jobs year-round.

Most of the low-income working age adults in the city (60 percent) and county (78 percent) were white, but blacks are more likely than whites to be poor, researchers found. Of working age African Americans, 52 percent in the city and 47 percent in the county were low-income, compared to 28 percent of working age whites in the city and 21 percent in the county.

Blacks are over-represented in lower paying jobs and under-represented in higher paying ones. Per capita income for African Americans is half that of whites, both in Pittsburgh ($7,311 vs. $14,540) and Allegheny County ($8,365 vs. $15,983).

In only four of the comparable cities and counties examined by UCSUR was there a greater disparity of income between blacks and whites, said Ralph Bangs, an UCSUR research associate who co-authored the new study with graduate student researchers Cheryl Kerchis and Laurel Weldon.

Bangs also co-authored a series of Pitt Benchmarks Reports in the mid-1990s, detailing the income disparities between local whites and blacks.

According to the new study, Allegheny County women tended to be poorer than men. About 57 percent of the low-income adults were women compared to 52 percent of all adults aged 18-64. The majority of black women aged 18-64 in the city (62 percent) and in the county (57 percent) had low incomes compared to 32 percent of white women in the city and 24 percent in the county.

Among the report's more alarming findings were that: * Among African Americans living in the city in 1989, 79 percent of children, 62 percent of women and 48 percent of men lived in poor households.

* In the current labor market, about 60 percent of low-income, working age adults in Allegheny County could not obtain full-time, full-year jobs paying living wages if they tried. The conclusion is based on an analysis of jobs typical of county residents of the same race, gender and educational level.

* For low-income, working-age adults in Allegheny County to attain self-sufficiency, total employment in the county would have to increase by 24 percent. In the last five years, however, total employment in the county increased by less than 2 percent.

* Economic growth no longer benefits all levels of society. "Before the 1980s, economic growth tended to raise the income levels of all workers," Bangs said. "But that's no longer true. The problems of poverty in Pittsburgh and Allegheny County are not going to go away because of job growth in high tech companies and the health care market." The Pittsburgh region lost 162,000 manufacturing, mining and construction jobs between 1979 and 1995, while gaining 181,000 service industry jobs. "However, all of the lost jobs were in industries which paid above average wages, while about 85 percent of the job gains were in industries with below-average wages," the report notes. Low-skilled workers with high school educations or less were especially hard hit by the region's economic transformation, Bangs said.

The UCSUR report sometimes cites figures for 1989 and 1990, using U.S. Census statistics, and other times refers to 1997 conditions. "Since unemployment rates are about the same today as at the time of the 1990 census and the number in poverty has been increasing in the city and county in recent decades, one can assume that about as many low-income working age people live in the city and county as in 1990," the report explains.

In setting new standards for what constitutes a living wage, UCSUR researchers "essentially redefined what 'poverty' should mean," Bangs said. "Then we estimated the basic living costs for 36 different family types in the city and county." The UCSUR report argues that "Reliance on federal poverty lines as a measure of low-income status grossly underestimates economic hardship. The basic living cost thresholds developed in this report are 2 to 2.5 times federal poverty lines." Based on the basic living costs outlined in the UCSUR report, single adults in Allegheny County require about $16,000 a year before taxes to meet basic living costs. Married couples without children need roughly $24,000. Depending on the number of children, single-parent families require $25,000-$41,000, while married couple families need $27,000-$47,000.

Federal poverty lines, based on consumption patterns from the mid-1950s, are calculated by multiplying food costs for each family type by three. According to Bangs and his colleagues, the guidelines no longer accurately reflect the relationship between food expenditures and other cost categories.

"For example," Bangs said, "in the 1950s and early 1960s most couples with young children included one adult who worked full-time and another who stayed at home. Today, it's much more likely that both adults have jobs. That means they probably have greater transportation expenses as well as child care expenses, which weren't much of a factor 30 years ago.

"Also, you can't expect working couples to prepare all of their food at home, so outside food expenses are larger than in the past," he said.

Another flaw of federal poverty lines is that they are uniform across the country, failing to take into account cost differences among cities or even between urban and rural areas, Bangs said.

He emphasized that UCSUR's estimates of basic living costs are hardly luxurious: "We didn't include a television set as a basic need, for example." Two of UCSUR's seven categories of living costs — food and housing — require about half of total basic living costs for working age adults and their families.

The Pittsburgh Foundation and the University funded the report, which is called "Basic Living Cost and Living Wage Estimates for Pittsburgh and Allegheny County." The Pittsburgh Foundation requested the data for use in granting money to address employment and income problems. Bangs and his colleagues hope other foundations, labor unions, government officials and social service agencies will use the report as well.

But Bangs said he expects that many of the same people who refused to believe the findings of his Benchmarks reports will dismiss the new report. "These are people who say, 'It can't be that bad. If it is, why don't I see these conditions where I work and live?' And the obvious answer is that they never see the neighborhoods where most low-income people live," Bangs said.

The report maintains that many low-income families make do without basic necessities. "Whether or not they are employed or receiving cash assistance, many people live at consumption levels below basic living costs," the document states. "They manage to make ends meet only by living in inadequate housing, living in depressed and unsafe neighborhoods, providing their children with low quality child care and public education, not eating fruits and vegetables, not having a telephone, spending nothing on entertainment, and/or living without an automobile." –Bruce Steele n

Filed under: Feature,Volume 30 Issue 6

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