PROVIDENCE – Two-thirds of single-parent families and large numbers of other Rhode Islanders don’t earn enough to cover basic expenses, according to a report released Thursday by the Economic Progress Institute.
The Providence-based research and policy group used the findings to call for a $15 an hour minimum wage in the Ocean State to help close the gap between what many workers earn and their necessary expenses.
The institute’s report, “The 2018 Rhode Island Standard of Need,” calculated that a single-parent family with a toddler and a school-age child in Rhode Island faces more than $55,000 a year in expenses on a no-frills budget that includes the cost of housing, food, transportation, health care, child care, and other basic needs. That family would need more than $62,000 a year in pretax income, the report found.
Meanwhile, a two-parent family, also with two children, faces more than $60,000 a year in such expenses, requiring pretax income of more than $68,000 a year.
Additionally, a single adult would have nearly $22,000 a year in basic expenses, requiring a pretax income of more than $27,000 a year.
Based on those numbers, 67 percent of single-parent families, 28 percent of two-parent families and 43 percent of single adults in Rhode Island do not earn enough to make ends meet, the biennial report found.
As a solution, it suggests that Rhode Island’s minimum wage be raised to $15 an hour. The state’s current minimum wage of $10.10 an hour is set to increase to $10.50 an hour starting Jan. 1.
In Massachusetts, meanwhile, the minimum wage of $11 an hour is set to increase to $12 an hour starting Jan. 1. Then it will increase by 75 cents each year until it reaches $15 an hour in January 2023, under legislation passed by Massachusetts state officials this year.
“All Rhode Islanders deserve the opportunity for economic stability,” Rachel Flum, the institute’s executive director, said in a statement.
The report “shows how work support groups, including child care assistance, subsidized health insurance and SNAP [the federal Supplemental Nutrition Assistance Program, or food stamps] help working families close their budget gap when earnings are not enough,” she said.
“An adequate minimum wage and state Earned Income Tax Credit are vital to boosting workers’ incomes,” she added. “Rhode Island should continue to move forward with improving access to child care assistance and increasing the minimum wage and the state” Earned Income Tax Credit.
Citing recently released federal poverty data, the report found that 11.6 percent of Rhode Islanders lived below the poverty level last year. The rates are higher for minorities, with 23.4 percent of Latinos and 24.3 percent of blacks below the federal poverty line last year, compared with 8 percent of whites.
Yet the report describes how the way the federal government measures poverty is outdated and doesn’t accurately reflect present realities for the working poor.
“The federal poverty level was developed in the 1960s and measured economic security based on the cost of food, which at the time represented a third of a family’s budget. Times have changed so that now other expenses such as child care and housing take up a larger share of a household budget than does food,” it reads.
“The federal poverty level has not changed to reflect this new reality, or to reflect that expenses differ in different areas of the country” it adds. “The federal poverty level also fails to take into account the value of work support programs and tax credits that can help working families meet their expenses.”
The full report is available online at www.economicprogressri.org/RISN.
Scott Blake is a PBN staff writer. Email him at [email protected].