The Olmsted County Community Health Improvement Plan for 2021-2023 has identified their top three community health priorities: mental health, financial stress, and substance use. Financial stress occurs when the household income is less than expenses, creating an inability to meet basic financial commitments and needs. Basic financial commitments and needs include; rent/mortgage payments, utility bills, medical care and (hopefully) insurance, transportation, food, child care, and things critical to supporting the home environment. In additions, financial stress is considered a contributor to mental health issues. This plan also states that 33% of Olmsted County adults report being financially stressed. The biggest financial stressors are credit cards, medical bills, and housing costs (including rent, mortgage, and utilities).
Let’s look at the numbers and resources
The U.S. Department of Health and Human Services (HHS) 2021 poverty guideline for a family of four is an income of $26,500 (for each additional family member add $4,540). The poverty guidelines are used for administrative purposes, such as determining financial eligibility for various federal programs. Examples of federal programs include: Head Start, Low-income Home Energy Assistance Program, Family Planning Services, Supplemental Nutrition Assistance Program (SNAP), Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), and both National School Lunch Program and School Breakfast Program (for free and reduced-price meals only).
Minnesota poverty guidelines are aligned with the HHS poverty guidelines. However, the Minnesota Department of Human Services (DHS) provides greater flexibility on the availability of their services. For families in need, DHS provides programs for childcare, food and nutrition, housing, health care, and income assistance. The qualifications for these programs are based on income before taxes, for example:
- Qualifying for food and nutrition assistance a family of four’s income can’t exceed $3,603 per month or $43,236 yearly
- Eligibility for child care assistance the same family’s income limit is $48,893
- Concerning housing there are various programs at the state and federal level with various considerations
- Getting health care insurance and support is provided by either Medical Assistance or MinnesotaCare for those who meet the income requirements
- Heating assistance is overseen by the Minnesota Commerce Department through its Energy Assistance Program (EAP) that helps pay for home heating costs and furnace repairs for income-qualified households.
Only a glimmer of hope
On the Minnesota Department of Labor and Industry web site there is a news page stating Minnesota’s minimum-wage rates will be adjusted for inflation beginning Jan. 1, 2021, to $10.08 an hour for large employers (up from $10.00 in 2020) and $8.21 an hour for other state minimum wages (up from $8.15 in 2020). These state minimum-wage rates will not apply to work performed in the cities of Minneapolis and St. Paul, which have higher minimum-wage rates.
Even with these wages if both adults in a family worked for a large employer (at 2,080 hours per year per person) their combined gross income (at $10.08 an hour) would be $41,932.80. If both adults in a family worked for a small employer (at $8.21 an hour) their combined gross income (at 2,080 hours per year per person) would be $34,153.60. As you can see either of these family scenarios allows the family of four to access some of the Minnesota public support programs.
There is a big but
The Minnesota Employment and Economic Development web site has a Cost of Living Study that provides a yearly estimate of the basic-needs costs of living in Minnesota by county, region, and statewide. If we use the parameters of a family of four with both adults working full time their cost of living in Olmsted County is $84,294. The study examines monthly living costs in seven cost categories: food, housing, healthcare, transportation, child care, other necessities, and net taxes. Note that these cost categories do not include any extras, such as vacation, savings, or entertainment.
So, what does that mean? It means that even hard-working families may not earn enough to get by on their income alone. It suggests that inequities are masked. When we see the poverty rate of Olmsted County at 7.1 percent currently, it may appear that there are very few families experiencing hardship. As stated at the beginning, 33% of Olmsted County adults report being financially stressed.
Actions you can take
Advocate for increases to the minimum wage, increasing income limits for eligibility of state and federal supports that cover some or all of the cost of basic needs. If possible, shop at companies that support their workers and pay a living wage.
If you are an employer, pay a living wage or provide support for some of the other major costs families encounter.
To learn more about the numbers and information used in this blog post, review the following web sites and pages:
- Olmsted County Community Health Improvement Plan for 2021-2023: https://www.olmstedcounty.gov/sites/default/files/2021-01/CHIP2123Final.pdf
- U.S. Department of Health and Human Services (HHS) 2021 poverty guideline: https://aspe.hhs.gov/poverty-guidelines
- Minnesota Department of Human Services: https://mn.gov/dhs/
- Minnesota Department of Labor and Industry: https://www.dli.mn.gov/news/new-year-new-minimum-wage-rate-jan-1-2021
- Minnesota Employment and Economic Development – Cost of Living Study/Tool: https://mn.gov/deed/data/data-tools/col/