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The Realities of Poverty in Delaware

2001 - 2002

 

INTRODUCTION

 

The 2001-2002 update of the Realities of Poverty is the first being produced by the Delaware Housing Coalition on its own, taking over the job from the Public Assistance Task Force, which has asked us to continue its fine work. It is our intention to update the Realities every two years, as PAT used to do.

Readers familiar with earlier editions of this report will find things missing from it this time, including discussions of food security, utility costs, and childcare. It also lacks discussions of certain subjects, including community reinvestment, predatory lending, concentration of wealth, incarceration rates, and tax fairness, which we did not have the space and time to include. In defense of all these omissions, we can only say that we have attempted to create a document that provokes Delawareans to further investigation and action on their own, in the tradition that the Public Assistance Task Force helped to create.

Our concentration on other areas has to do with our own mission to encourage Delaware to meet its obligation to house everyone decently. Housing is the single cost most likely to determine whether a family is in poverty after it has been paid.

Further, we have included a discussion of liveable wages and basic family budgets for Delawareans, with the aim of encouraging discussion of this very important issue and of giving some guidelines within which to begin that discussion.

CONTENTS

The Realities of Poverty in Delaware: 2001 - 2002

POVERTY IN DELAWARE WHO CAN AFFORD TO LIVE IN DELAWARE?
The State Rental Housing and Fair Market Rents
Geographic Retreat from Public Subsidies & Expiring Contracts
Healthcare Rural Housing Issues & Homelessness in the State
Poverty Despite Work A LIVING WAGE FOR DELAWAREANS
From Welfare to Work Three Living Wage Standards
A New Delaware Minimum Wage
ECONOMIC INEQUALITY
Salary Disparities CONCLUSION
Pulling Apart in Delaware

Contributors

Alice Brandreth Karen Curtis Deborah Gottschalk
Jay Lockaby Gina Miserendino Joe Myer
Steve Peuquet Christina Stanley, Research Ken Smith, Edit/Layout

The Realities of Poverty in Delaware: 2001 - 2002 is dedicated to all the citizens of the state who work to make ends meet and to keep their homes and families together, despite everything.

 

POVERTY IN DELAWARE

The State

The Economic Environment for the Poor in Delaware

Using data from the American Community Survey for 1999 and 2000, the Economic Policy Institute (EPI) came up with a rough measure of state economic environments for the poor. EPI looked at poverty rates for the state, for children, and for single female-headed households and compared them to the percentage of families receiving public assistance and food stamps and paying more than 30% of income on rent. EPI also looked at median earnings gender gap and income inequality in arriving at an index of the state economic environment for the poor. The ACS for 1997showed a much lower child poverty rate than the regular census figures (11.2% versus 16.6%) but reflected the high rate of poverty among single female-headed families (despite reductions in welfare) and a gender gap in earnings of 65%.: Delaware women earning $0. 35 less per dollar earned by Delaware men.

Table 1: Delaware's Economic Environment for the Poor

Economic
Hardship
Poverty Rate Share of households receiving

Median earnings gender gap

Overall Children Single mother families Cash public assistance Food Stamps Paying more than 30% on rent
9.6% 11.2% 27.9% 2.5% 4.8% 35.9% 65.2%
Income
Inequality
Median family income

Percent of families with income in range of:

<$25,000

$25 to 50K

$50 - 100K

$100 -200K

$200,000+

$35 - 75K

$55,131 17.0% 27.0% 39.4% 14.0% 2.6% 40.3%
Source: Data (1997) from the American Community Survey, http://www.epinet.org/datazone/acs/index.html

 

Poverty, Housing, and Income in Delaware

Despite a climate of economic growth which, especially during the second half of 1990s, brought up the earnings of families at or near poverty, there was an increase in the number (by 17,000) and percent (by 2%) of Delawareans in poverty, according to the findings of the census. This amounted to an increase in the number of poor in Delaware by over 35%.

Table 2: Poverty, Housing, and Income in Delaware: 1990 & 2000

Category 1990 2000 Change % Change
Poverty
Poverty rate 6.9% 8.7% 1.8%  
Number in poverty 48,000 65,000 17,000 35.4%
Housing
Median gross rent $495 $654 $159 32.1%
Median mortgage payment $763 $1,330 $567 74.3%
Two-bedroom Fair Market Rent (FMR) $590 $696 $106 18.0%
Three Bedroom Fair Market Rent (FMR) $740 $933 $193 26.1%
Two Bedroom Housing Salary/Wage $23,600 $27,820 $4,220 18.0%
$11.35 $13.38 $2.03
Three Bedroom Housing Salary/Wage $29,600 $37,316 $7,716 26.1%
$14.23 $17.94 $371.00
Income
Minimum Wage/Salary $8,840 $12,792 $3,952 44.7%
$4.25 $6.15 $1.90
Median family Income $40,252 $55,131 $14,879 44.7%
Median household Income $34,875 $47,629 $12,754 36.6%

Source: QTO3. Profile of Selected Economic Characteristics: 2000 and DP4. Income and Poverty Status in 1989: 1990, http://www.census.gov


Delaware Household Income Sources

Increases in the state minimum wage, low unemployment, and real gains in wages have combined with the time-limiting of welfare benefits to make Delaware a state where earnings are the principle source of income. Households with any form of public assistance decreased over the ten years from 1990 to 2000 by over 43%. Households with retirement as a source of income increased 40%.

Table 3: Delaware Household Income Sources: 1990 & 2000

Income Type

1990 2000 Change
# # # %
Wage and salary 199,690 241,237 41,547 20.8
Social Security 65,306 78,592 13,286 20.3
Public assistance 12,914 7,305 (5,609) -43.4
Retirement 45,999 64,470 18,471 40.2
Total Households 247,163 295,258 48,095 19.5

Source: QTO3. Profile of Selected Economic Characteristics: 2000 and DP4. Income and Poverty Status in 1989: 1990, http://www.census.gov

During the 1990s, households with incomes below the traditional "middle class" threshold of $35,000 saw negative growth, probably a consequence of real increase on wages and salaries but even more of the increasing need for families to have more than one wage earner. The greatest growth in households was in the range from $50,000 to $150,000 per year. The households in this range accounted for 80% of the growth during the decade.

Table 4: Number of Poor and Poverty Rate in Delaware: 1980 - 2000

Year Total Population Number of Poor Percent
2000 750,000 65,000 8.70%
1995 713,000 74,000 10.30%
1990 690,000 48,000 6.90%
1985 624,000 71,000 11.40%
1980 578,000 68,000 11.80%

Source: http://www.census.gov/hhes/poverty/histpov/histpov21.html

Poverty Line, Poverty Wage, and Poverty Rent

One way of seeing the inadequacy of current measures of poverty and the plight of the poor in the state is by contrasting the rents that Delaware families in poverty can afford with the prevailing rents for the units they require. Using the accepted policy standard that no more than 30% of income should be spent on housing needs, we can come up with the "poverty rents" for households in poverty in Delaware: the maximum a family at the poverty line should be paying for gross housing costs. These poverty rents fall far below the existing fair market rents in the state for the respective unit required by each of the family sizes.

Table 5: Poverty versus Rent in Delaware

Family Size

Poverty Line, Poverty Wage and Poverty Rent

FMR and Housing Wage

Poverty Line
(Annual Income)

Poverty Line
(Monthly Income)

Poverty Wage (Hourly) Poverty Rent
(Monthly)
Fair Market Rent
(3-County Range)
Fair Market Wage
(3-County Range)
1 $8,590 $716 $4.13 $215 $472 to $511 $9.08 to $9.83
2 $11,610 $968 $5.58 $290 $477 to $623 $9.17 to $11.98
3 $14,630 $1,219 $7.03 $366 $477 to $727 $9.17 to $13.98
4 $17,650 $1,471 $8.49 $441 $800 to $986 $15.38 to $18.96
5 $20,670 $1,723 $9.94 $517 $800 to $986 $15.38 to $18.96
6 $23,690 $1,974 $11.39 $592 $800 to $1192 $15.38 to $22.92
7 $26,710 $2,226 $12.84 $668 $854 to $1,192 $16.42 to $22.92
8 $29,730 $2,478 $14.29 $743 $854 to $1,192 $16.42 to $22.92

Source: Federal Register: March 18, 1999 (Volume 66, Number 33); Notices: http://aspe.hhs.gov/poverty/01poverty.htm Poverty level was divided by 52 weeks and then by 40 hours to reach the poverty wage.

 

POVERTY IN DELAWARE

Geographic

Poverty continues to be concentrated in New Castle County, accounting for 56% of the total. However, the poverty rate increases as we travel south in the state, with Sussex County at 12.7%. The child poverty rate, according to this 1997 survey, is 15.4%, with the rate for children from 5 to 17 years of age being 13.8%. These two rates, like the poverty rate as a whole, increase as we go from north to south, with the child poverty rate in Sussex County exceeding that of both the other counties, as well as the state as a whole. The rate of poverty for Delaware children under five years of age is 17.1%. Similarly, median income per county declines in a southward movement, with New Castle County exceeding the state median by about $6,500 and Sussex County a little more than $8,000 below that mark.

Table 6: Delaware Income and Poverty Estimates: 1997

  Delaware New Castle Kent Sussex
Number in poverty 73,868 41,658 14,822 17,388
Percent in poverty 10.0 8.7 12.1 12.7
Number under 5 years in poverty 8,553  
Percent under 5 years in poverty 17.1
Number of related children 5 to 17 years in poverty 18,114 9,734 4,047 4,333
Percent of related children 5 to 17 years in poverty 13.8 11.6 16.8 18.4
Number 0 to 17 years in poverty 28,193 15,303 5,980 6,910
Percent 0 to 17 years in poverty 15.4 13.1 17.7 21.5
Median household income $41,315 $47,819 $36,555 $33,281

Source: http://www.census.gov/hhes/www/saipe/stcty/sc97ftpdoc.html

School-Age Poverty

This same survey estimates poverty by school district throughout the state of Delaware. The same pattern applies to the findings here, with the majority of poor children attending school in northern Delaware. Northern districts account for 53% of school-age children in poverty (9,664), with the districts in the central part of state making up one-fourth of that total (4484) and the southern districts representing 22% (3,966). However, while the north has one district with a poverty rate of 20% (2,749 children in poverty), there are two districts in the central part of the state with 20% rates (with a combined total of 2,363 children in poverty). In the southern part of the state, there are three districts which exceed 20% poverty rates (one of them with a 35% rate of school-age child poverty), with a combined total of 2,783 poor children among them.

Table 7: Delaware School Districts and Children in Poverty

School District Population # 5-17 years # in poverty 5-17 years % in poverty 5-17 years
NORTH
Appoquinimink 15,414 3,098 213 7.0
Brandywine 101,148 16,602 1,610 10.0
Christina 144,036 25,000 3,424 14.0
Colonial 71,457 13,540 1,668 12.0
Red Clay 145,925 24,251 2,749 20.0
Subtotal 477,980 82,491 9,664 11.7
CENTRAL
Caesar Rodney 35,568 7,355 1,040 14.0
Capital 43,633 7,933 1,617 20.0
Lake Forest 19,200 3,721 746 20.0
Milford 22,251 4,222 635 15.0
Smyrna 20,750 3,627 446 12.0
Subtotal 141,402 26,858 4,484 16.7
SOUTH
Cape Henlopen 27,718 4,282 563 13.0
Delmar 5,174 934 126 13.0
Indian River 45,622 7,040 1,452 21.0
Laurel 13,377 2,577 572 22.0
Seaford 21,173 4,014 494 12.0
Woodbridge 11,620 2,200 759 35.0
Subtotal 124,684 21,047 3,966 18.8

Source: http://www.census.gov/hhes/www/saipe/school/sd97ftpdoc.html



POVERTY IN DELAWARE

Healthcare

Nearly one in every six Americans (42.6 million) are without health insurance. Despite the longest economic boom in history, the number of persons without health insurance dipped just 4% in 1999.[1] With the current economic downturn, some states are already cutting back coverage with Oklahoma mailing out termination letters to Medicaid recipients and North Carolina imposing a freeze on enrollment in the CHIP program for children.[2]

Compared to other wealthy industrialized nations, the United States health care system provides coverage to the fewest and costs the most. Six of the eight OECD countries have universal coverage for all of their citizens. [3] The two countries without universal coverage are the United States and Germany which does not require its most affluent citizens to purchase health insurance. In 1997, health expenditures as a percentage of the GDP (gross domestic product) ranged from a high of 13.6% in the United States to 6.7% in the United Kingdom. The OECD median was 7.6%. When compared to the other OECD countries, infant mortality rates are the highest and life expectancy rates are the lowest in the U.S. [4]

"Market competition has not succeeded in bringing the U.S. health care costs in line with those of industrialized countries. There is no evidence of sustained quality improvement. Market based reform has not expanded health insurance coverage but has rather, directly or indirectly, increased the number of under insured and uninsured Americans. Medical research and education have suffered and medicine's social mission declined." [5]

In Delaware 11.4% of the state's population lacked health care coverage in the year 2000, compared to 13.4% for the region (Maryland, Pennsylvania, New Jersey and New York). [6] From the mid 1990s to the present the rate of uninsured in Delaware decreased from 13.6% to 11.4%. This drop in the number of Delawareans without health insurance is credited primarily to the increased coverage of children through the Healthy Children Program initiated in January 1999.

The number of uninsured children is estimated by one source as 32,000 (a 15.1% rate), with uninsured children in families at or below 200% of poverty being 23,109 (an increased rate of 27.6%). [7]

The bulk of the 96,000 uninsured Delawareans are the working poor who do not qualify for Medicaid, are not provided health insurance by their employers, and whose income is insufficient to purchase health care coverage.

The profile of the uninsured Delawarean: single, white, male over age 17, working with an income above poverty level.

Table 8: Infant Mortality and Low Birth Weight Babies, 1999

  Delaware United States
Infant Mortality [8] 8.1% 7.5%
Low Birth Weight [9] 8.5% 7.5%

Both infant mortality rates and the percentage of low birth weight babies are higher in Delaware than in the nation. Since 1983 in Delaware, the percentage of low birth weight babies has increased. As both infant mortality rates and low birth weight are correlated with poverty, it should come as no surprise that child poverty rates are increasing in Delaware where one in six children now live in poverty.[10]

Sources: [1] Physicians For A National Health Program (PNHP), "Despite Economic Boom, Number of Uninsured Drops Only 4 Percent," Internet News Release: 9/29/00; [2] family Health Organization, Internet News release: 3.20/01; [3] Anderson, Gerard F., "Multinational Comparisons Of Health Care," Center For Hospital Finance and Management, John Hopkins University: October 1998; [4] Saltman, R.b., and Figueres, J., "European Health Care Reform," WHO Regional Publications, European Series No. 72, Year 2000; [5] Journal of Health and Social Policy, Vol, 13[1] 2001, "Market Structure and Performance: Evaluating the U.S. Health System Reform," by Pauline Vaillancourt Rosenau, Ph.D.; [6] Delaware Health Care Commission, Annual Report and Strategic Plan, 1/15/01, p. 21; [7]Center on Budget and Policy Priorities, DELAWARE: Poverty and Program Trends (August 2000), www.cbpp.org, [8] Kinds Count in Delaware Fact Book 2000-2001, Center for Community Development and Family Policy, College of Human Services, Education and Public Policy, University of Delaware, p. K-22; [9] Ibid., p. F-12; [10] Ibid., p. K-35.



POVERTY IN DELAWARE

Poverty Despite Work

The good news of low unemployment and higher real wages over recent years is tempered by the fact that workers continue to live at or near poverty and make up an increasing proportion of the officially poor. A recent study by the Center for Budget and Policy Priorities (CBPP) found that almost 56% of poor families with children in Delaware have at least one worker in them and that 52% of poor families have earnings as a majority of their income (DELAWARE: Poverty and Program Trends, August 2000, www.cbpp.org) . Another CBPP study, The Poverty Despite Work Handbook, found that there are 31,000 people in working poor families and 21,000 children in those families.

Table 9: U.S. Workers as a Proportion of All Poor: 1978 - 2000

(Numbers in thousands)

Poor people 16 years and over

Worked

Worked year-round full-time

Year

Total

Number

Percent Number Percent
2000 20,597 8,342 40.5 2,432 11.8
1990 21,242 8,716 41.0 2,076 9.8
1980 18,892 7,674 40.6 1,644 8.7
1978 16,914 6,599 39.0 1,309 7.7

Source: http://www.census.gov/hhes/poverty/histpov/histpov18.html

The Handbook also found that 30% of Delaware families with children who live at or below the official poverty line have a full-time, year-round worker present. Within the range of 100% to 150% of poverty, 71% of the families with children

have a full-time, year-round worker. Over 90% of all Delaware families with children who fall below 200% of poverty have at least one worker, and 59% have a full-time, year-round worker.

Table 10: Poverty Despite Work in Delaware: Mid-1990s

  in poverty 100% to 150% 100% - 200%
Families

#

with a worker

with a full time year round worker

#

with a worker

with a full time year round worker

#

with a worker

with a full time year round worker

with Children 10,000 8,000 3,000 7,000 7,000 5,000 22,000 21,000 16,000
without children 12,000 8,000 1,000 8,000 8,000 3,000 18,000 17,000 10,000

Sources: Center on Budget and Policy Priorities, The Poverty Despite Work Handbook (Second Edition), Christina Smith FitzPatrick and Edward Lazere (April 1999), www.cbpp.org,

The table below was originally developed for the Citizens' Inquiry on Welfare Reform, held in Dover, Delaware. The table has been updated to 1999 figures, including scenarios which reflect typical current placement wages and hours worked by ABC recipients. It illustrates the dilemma of welfare-to-work efforts. Even though Scenario 2 and 3 allow the family of three to rise above official "poverty," the expenses in this albeit frugal budget exceed income in all three scenarios, as well as the "pre-work" situation from which the family began.

Table 11: Does Work Pay Enough? Poverty Despite Work: Monthly Analysis




Family of Three in Delaware's a Better Chance Welfare Reform Program and Three Common Work Scenarios (1999)
  Pre Work Scenario 1
During Work

p/t 25 hrs@$6.74/hr.

Scenario 2
During Work

30hrs@$7.08/hr.

Scenario 3
During Work

f/t 40hrs@$7.42/hr.

Income * TANF Grant 338 146 69 0
Earnings 0 725 913 1276
Food Stamps 329 218 207 159
TOTAL $667 $1,089 $1,189 $1,435
% of Poverty ($1,157)

58%

94%