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Report: Iowa's cost of living outpacing wages

Southeast Iowa is state's highest-cost area

Traffic travels along Interstate 380 just north of Swisher during the evening rush hour on Tuesday, July 2, 2013, in (Liz Martin/The Gazette)
Traffic travels along Interstate 380 just north of Swisher during the evening rush hour on Tuesday, July 2, 2013, in (Liz Martin/The Gazette)

A new report shows that the cost of living for Iowans continues to outpace wages.

The report, released Tuesday by non-profit Iowa Policy Project, states that a single Iowa resident must make at least $13.16 an hour — almost double the state minimum wage of $7.25 an hour — to meet basic living expenses.

The basic-needs wage jumps to $21.52 an hour for a single parent with one child.

The report defines its basic-needs budget as what is needed to “survive rather than thrive.”

“We’re trying to come up with what it takes for families — of different sizes and types — just to make ends meet, just to get by day to day,” said IPP research director Peter Fisher, author of the report.

The basic-needs budget includes rent, utilities, food prepared at home, child care, health care and other household necessities. Expenses not included in the budget are savings, loan payments, education expenses and any entertainment, vacation or social and recreational travel and meals outside the home.

The report is the fifth edition from IPP, but Fisher said the methodoligy had been updated with the 2016 report, so it’s difficult to compare to last year’s.

The report also found the highest cost region in Iowa to be the state’s southeast corner in the counties of Henry, Louisa, Des Moines and Lee. Johnson and Polk counties are also have some of the highest costs in the state.

The four Eastern Iowa metro areas of Waterloo/Cedar Falls, Davenport, Dubuque and Cedar Rapids had the lowest overall cost of living, according to the report.

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Fisher said private health insurance and transportation were often less expensive in larger metro areas.

Johnson County and the Des Moines metro area were outliers to that rule, with some of the highest child care costs in the state.

Many costs keep going up.

The average housing costs in Iowa, according to Housing and Urban Development data, climbed by 6.8 percent between 2013 and 2015 for a one-bedroom apartment and 8.2 percent for a two-bedroom.

Health insurance on the individual market climbed 17 percent and 23 percent for families with children, according to the report.

The report also found that, even with public health insurance or subsidies, Iowans need to make more than the minimum wage to reach a basic standard of living.

Without those support programs, Iowans need to be closer to the median wage of $15.91 an hour to reach those standards, according to the report.

Fisher argued those figures help showcase the need for an increase in the state minimum wage, which has been unchanged for eight years.

“I think this makes the case for moving toward a more self-sustaining wage,” Fisher said. “The only way people can get by with a lower wage is with substantial support.”

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Johnson County has taken steps to bring its wage up to $10.10 by January 2017, while Linn County officials have begun talking about the pros and cons of a minimum-wage increase.

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