Report: Many R.I. households not earning enough to make ends meet

THE ECONOMIC PROGRESS INSTITUTE released a report on Thursday saying that many Rhode Island households to do not earn enough to make ends meet. A single-parent family with two children needs $59,083 in pre-tax earnings for expenses, the report said. / COURTESY ECONOMIC PROGRESS INSTITUTE
THE ECONOMIC PROGRESS INSTITUTE released a report on Thursday saying that many Rhode Island households to do not earn enough to make ends meet. A single-parent family with two children needs $59,083 in pre-tax earnings for expenses, the report said. / COURTESY ECONOMIC PROGRESS INSTITUTE

PROVIDENCE – A new report says that many Rhode Island households are not earning enough to make ends meet.
A two-parent family with two children needs $64,234 in pre-tax earnings yearly to meet basic living expenses, while a single-parent family with two children needs $59,083, according to the Rhode Island Standard of Need report, released by the Economic Progress Institute on Thursday.
Saying it is “expensive to live and raise a family in Rhode Island,” the report said that 82 percent of single parent families with two or more children earn less than the $59,083 needed to meet expenses, while 26 percent of two-parent households with two or more children do not earn the required $64,234. The figure of $64,234 for a two-parent family assumes the family has two breadwinners and needs full-time child care for a toddler and after-school care for a school-aged child.
The report also said that more than one-third (or 36 percent) of single adults earn less than the $24,666 they need to meet basic needs.
The report said that a single parent with two young children needs to earn $28 an hour to meet his or her family’s basic needs, but only 27 percent of Rhode Island’s jobs pay a median hourly wage of $28 or more.
As a result, many workers need government-funded work support programs to close the gap between wages and expenses, the report said. Those programs include tax credits, nutrition assistance and subsidized health care and child care, the report said.

The Institute also released a fact sheet showing that Rhode Island’s welfare benefits are second-lowest among New England states at $544 a month, only above Maine, which pays $485 a month. Child care assistance eligibility limits are the lowest in New England, at $35,622, based on a family size of three.

“Rhode Islanders who work full-time should be able to support their families. In our service-based economy many people are employed at jobs that do not pay a family-sustaining wage. Therefore it is critical that we have supports in place to help families pay the rent, put healthy food on the table, and know their children are safely cared for while parents are at work,” Kate Brewster, executive director of the Institute, said in a statement. “And once and for all, it is time to put to rest the myth that Rhode Island is the most generous ‘welfare state.’ The support we provide for working and under-employed families is among the lowest in New England.”

The Rhode Island Standard of Need calculates a “no-frills” budget that includes the costs of housing, food, transportation, health care, child care and other necessities.

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The report highlights a recent change to the state’s Child Care Assistance Program that has helped working parents. The change allows parents enrolled in the program to work more hours, accept modest raises, or take a higher-paying job without losing their assistance. The parents’ co-payment rises as their income goes up.

The RISN finds minimum wage earners fall short in meeting their monthly expenses but unlike past years, many now have free health insurance as a result of the state’s decision to expand Medicaid to childless adults under the Affordable Care Act.
The Institute recommends several changes to improve the economic well-being of Rhode Islanders:

  • Increase Rhode Island’s refundable Earned Income Tax Credit to 20 percent from 10 percent.
  • Expand access to child care assistance by raising the income limit.
  • Invest more state funds in workforce training and education so no worker needs to wait for basic skills and English language services and unprepared workers have more opportunities to get the skills and credentials they need to get good jobs.

“Work supports like subsidized health care and child care are not only important for workers struggling to make ends meet, but they are good for our struggling economy,” said Brewster. “Businesses will have more customers when workers are able to keep more of their paycheck through the Earned Income Tax Credit, and employees perform better when they are healthy and know their children are in safe and consistent care.”

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