On January 29th, Voices for Children released the 22nd annual Kids Count in Nebraska Report. This year’s report is our biggest and most comprehensive edition to date. Every year in the Kids Count report, we include a timely commentary providing a deeper look at an issue important to the work we do here at Voices. This year’s commentary topic was how our great state can support working families. Today’s second post in the commentary series explores Nebraska poverty and the Family Bottom Line. Check out last week’s post examining Nebraska employment and income.
Last week’s post showed how Nebraska’s employment rate has completely recovered from the recession. Despite Nebraska’s low unemployment rate and relatively large middle class, 14.6% of families with children live in poverty. This is an increase from 2009, even though our employment statistics are very similar to that time. What this means is that people are working, but they are unable to make enough money to support their families above the federal poverty line. Our poverty rate is gradually decreasing, but we have not yet reached pre-recession rates even though our rate of unemployment has recovered.
In addition, trends show troubling disparities in our poverty rates based on race and ethnicity. In the most recent year for which we have data, child poverty decreased slightly for white children in Nebraska and increased slightly for children of color. The trend of working families with children struggling financially is further supported by the percent of children living in low-income families. In 2013, 40.9% of Nebraska’s children were living in families making below 200% of the federal poverty line. While the number of families living below poverty is gradually decreasing, the number of children living in low-income families is increasing.
What is more troubling about our poverty rates is that we know the official poverty measure is an inadequate means of determining a family’s economic stability. The official poverty line was developed in the 1960s and is based on the cost of food. The knowledge at that time was that food accounted for approximately one-third of a household’s overall budget, so the federal poverty line is the cost of food multiplied by three and updated annually for inflation.
In order to better understand what working families need to make ends meet, we calculated data from the Family Economic Self-Sufficiency standard to create what we have termed “The Family Bottom Line.” The Family Bottom Line is a reasonable estimate of what it takes for a family to make ends meet independent of any public assistance. In Nebraska, for a family of four — 2 adults, 1 infant, 1 toddler, the annual average income necessary was $41,798 in 2013, far above 100% of the federal poverty line. The highest monthly expense for this family is child care, something not accounted for in the federal poverty line. Through the Family Bottom Line estimates, we can gain a greater understanding of the expenses that Nebraska households face, and the steps necessary to create policies that enhance childhood well-being.