Full-time work not enough

Iowans are faced with limited economic opportunity despite their hard work.

Many Iowa families are unable to afford groceries, car maintenance or prescription refills, even though there is at least one full-time worker in the household. This presents a double bind, where Iowans are faced with limited economic opportunity despite their hard work.

The Iowa Policy Project’s 2019 Cost of Living report delves into these issues, finding work does not provide 1 in 5 Iowa working households enough to meet basic needs.

IPP constructs basic needs budgets that reflect a frugal standard of living — including food, health care, child care, household expenses, and transportation, then uses Census data to calculate the number of working households that make less than a wage that meets these basic requirements. These budgets leave no room for Netflix, student loan debt, vacations or eating at restaurants.

A majority of single-parent working households are unable to meet basic needs in Iowa. Our analysis shows that a wage of at nearly $20 per hour is needed just to afford basic expenses for single-parent families. This is consistent with research showing higher poverty rates among single-parent households, due to single incomes, child care expenses, generally lower educational attainment and low wages.

Evidence-based policymaking can address the reality that many working Iowans do not make enough to afford basic expenses. Policies that increase the minimum wage and adjust it to the cost of living, provide paid family leave, and boost Child Care Assistance will serve to ensure Iowans are able to just get by and hopefully get ahead.

Natalie Veldhouse is a research associate at the nonpartisan Iowa Policy Project. nveldhouse@iowapolicyproject.org

What are U.S. workers missing?

What many U.S. workers may not know is that every other developed country has a legal requirement for paid vacation and holidays.

Visiting other counties can mean drinking coffee in cafes, museums, night life and relaxing next to the sea. The best trips also include conversations with people from these lands.

I just taught a class in Romania and then visited Scandinavia to see friends and relatives. In both places I talked about work and family life. The first issue that always comes up is paid vacation, which America does not require.

What many U.S. workers may not know is that every other developed country has a legal requirement for paid vacation and holidays. All countries in the European Union require at least four weeks of paid vacation. Austria is the most generous, guaranteeing workers a legal minimum of 22 paid vacation days and 13 paid holidays each year.

U.S. workers have to depend on competition for such benefits. Companies must compete for workers. So in the U.S. the average worker gets 16 paid vacation days and holidays. However, that average is brought down by the fact that 1 in 4 U.S. workers does not have a single paid day off. That would not be allowed in Europe, or New Zealand, or Japan or Canada. In Canada, the federal government requires 19 paid days, and some provinces add additional time.

This data, from the Center for Economic and Policy Research (CEPR) and USA Today, reflects what I heard in conversations during the last few weeks.

I can hear it now: Raising benefits will cost jobs. Wrong. The CEPR data comes from 2012 when Germany with one of the most generous time-off packages had an unemployment rate of just 5.5 percent when ours was 8.1. It becomes part of the overall marketplace.

Maternity leave is another benefit where the U.S. falls behind. According to the International Labour Organization and a study at McGill University in Canada, the U.S. joins Papua New Guinea, Swaziland, Liberia and Lesotho as countries that provide no financial support for working mothers through their job.

Since Bill Clinton pushed through the FMLA (the Family and Medical Leave Act), a mother in the U.S. can take off 12 weeks to give birth but there is no requirement that the time off be paid. Again when I talked to people on my recent trip, I was amazed that a worker in Sweden can get 420 days to take care of a new baby with 80 percent pay. That can be shared between the mother and father.

Most other countries are not so generous but Germany gives 14 weeks and Denmark requires a full year at 100 percent of pay. Japan demands 14 weeks at 67 percent of pay. In New Zealand, 14 weeks are paid at 100 percent and one can ask for another 38 weeks unpaid. Canada requires 52 weeks, with 17 weeks paid.

These are countries with successful economies. In some, jobs are harder to get than in the U.S. but in others, like Germany and New Zealand, the unemployment rate is lower than ours.

Travel overseas is a good thing. You get to relax, recharge the batteries and come back ready to do your job better.

You also might learn that what we have come to accept as reasonable family and work life in this country is so out-of-step with the rest of the world.

IPP-osterberg-75  Posted by David Osterberg, Founding Director of the Iowa Policy Project