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Self-Sufficiency Standard in the Bristol, Virginia Community

by Lewis Loflin

What is the Self-Sufficiency Standard?

The U.S. Department of Housing and Urban Development (HUD) uses area median family income as a standard to assess families' needs for housing assistance. Those with incomes below 50% of the median area income are considered "Very Low Income," while those with incomes between 50% and 80% of the median area income are considered "Low Income."

(Almost all assistance is limited to the "Very Low Income" category, and even then, only about one-fourth of those eligible families receive housing assistance.) Thus, the Self-Sufficiency Standard for a Loudoun County family at 56.5% of the median family income, falls within the HUD definition of "Low Income."

As in most states and localities, the Self-Sufficiency Standard falls between 50% and 80% of area median income. That it is below the 80%-of-area median-income, "low income" standard used by HUD suggests that a substantial portion of Virginia families lack adequate income to meet their needs. At the same time, it suggests that the Self-Sufficiency Standard is set at a level that is neither too high, nor too low. (p. 14)

The Federal poverty level is decades out of date. Written in 1964 based on a family in 1955, it assumes the cost of food as costing 33% of after tax income, pegs this to inflation, and multiplies by three. Housing for example is locked in at 30%.

What does the Self-Sufficiency Standard include or not include in its calculations?

Self-Sufficiency Wages are family sustaining wages required to meet basic needs (including paying taxes) in the regular "marketplace" without public or private subsidies. Unlike HHS guidelines, it takes into account of where people live, how old their children are if any, etc. The Standard doesn't combine or average everyone together, and is based on a 40 hour work week.

The Self-Sufficiency Standard includes costs associated with employment including transportation, taxes, and child care. It does exclude things sometimes required for employment such as initial purchase of a car, having a telephone, or any way to pay for higher education for job retraining. In particular in relation to a car, a major breakdown or heavy repair bills from an older vehicle make this a ticking time bomb. Without a fairly good car, an employer my not even hire an individual where there is no mass transit as is the case in the Washington County area.

Thus The Standard doesn't allow for things such as retirement, college tuition or emergency expenses. Because this study dates from 2001-2002, costs have climbed on almost everything including gasoline and a 40% electric rate increase in Bristol, Virginia and Washington County. AEP in Scott County is seeking rate increases in late 2005.

The Standard includes the net effect of taxes and tax credits. It calculates in state sales taxes, payroll (Social Security and Medicare) taxes, and federal income taxes. Three federal credits available to workers and their families are "credited" against the income needed to meet basic needs: the Child Care Tax Credit, the Earned Income Tax Credit, and the Child Tax Credit.

Health Care Coverage is assumed employer-provided or at least partially financed. Without health benefits, they argue parents have to make the choice between not working to retain eligibility through welfare/Medicaid, or risk ruinous medical bills they can't afford. While there are more government subsidies on this such as when we get welfare to work programs in Virginia, one loses it after a year. Again the uninsured low-income or working poor live in a ticking time-bomb world because even if the Standard does a better job than HHS, it's has no margin for error.

We should also note for Washington County, Virginia the effect of a booming retirement community which often creates the lowest paying jobs while driving up living expenses in general. To quote, The Standard incorporates regional and local variations in costs. This is particularly important for housing...Although rural areas and small towns usually have lower costs than the metropolitan areas...there are exceptions...rural areas that have become desirable tourist second-home locations are often as high or higher than in a state's urban areas. Availability of housing in rural and urban areas can also affect costs."

The worse thing anyone could do to poor families is move in rich people in as in a retirement community. Outside some healthcare fields such as nursing, most service type jobs don't pay enough to live on even without the added inflation this creates in housing, local taxes, and utilities. Washington County is having to install a $35 million wastewater plant to serve new housing and retail growth in the Exit 7 area that produces mainly Wal-Mart type jobs. Residential growth doesn't pay enough in property taxes to cover these high costs, so these costs along with industrial development (often corporate welfare) are cost-shifted onto everyone.

Bristol, Virginia and Washington County residents got a 40% jump in electricity rates in December 2004, while property tax assessments in 2005 are up an average of 15.5 percent across Bristol, Virginia. Across Washington County where I live the average is 27 percent.

I've prepared this table below based on the real cost of living in the Bristol community based on the Standard versus HHS poverty guidelines. The reality is the real poverty rate in Washington County and surrounding areas is about double the official rate. This shows up in things like school lunch programs that use 185% of the official poverty rate to get a realistic picture. Many industrial jobs in this area pay between $7 and $8 an hour, so many families in particular single mothers or anyone with kids is in real trouble.

* Real cost of living and free lunch based on Sullivan County, which includes Kingsport and Bristol, Tennessee. Poverty rate based on 23.2 percent of households posting income of $15,000 or less, in Tri-Cities region 2001 from ING Investments.

** 2003 HHS Poverty Guidelines

To quote the Bristol Herald Courier July 31, 2005:

Buying that first home - the embodiment of the American dream - is becoming a struggle in Bristol...(this)...should not be confused with affordable. In fact, unless you just inherited a sack of money from a rich uncle, it can be a lengthy search. So forgive me if I'm not all that excited by the news that area home builders can't construct new homes in the $350,000-plus category - some would call them McMansions - fast enough to suit the well-heeled retirees moving to our area. How many Bristol area residents who are still working for a living can afford such a princely sum? Not many, as it turns out...

Working Poor

Appalachia in general has always been cursed with poverty. The argument has been more education or social services, but that just doesn't cut it anymore. Four decades of welfare, millions in the last decade in economic development, yet everyone admits the number of "working poor" is growing even with tax credits, higher levels of education, etc.

As the chart above shows, it takes much more than minimum wage to just survive, while the official poverty measure is nonsense. While most welfare type benefits help those below 50% of the median income, those between 50% to 80% are the losers. They hold the vast majority of earned income jobs lacking benefits, investment income, or even a living wage. With the replacement of manufacturing and mining jobs with "services" the results are two-fold:

  1. A good paying job will generate additional service jobs. DANA Automotive in Bristol, Virginia announced in October 2005 their plans to close and move to Mexico. The loss of these 270 jobs will cost an additional 400 service jobs as this income is removed from the community.
  2. Service jobs in restaurants, retail, hotels, tourism, etc. are best suited as secondary jobs, not a primary job. They produce little in the way of secondary employment because these workers have little deposable income. They often have to be subsidized in some manner, be it unpaid bills at the emergency room or state funded Medicaid, burdening the rest of the community. In my opinion the cost of these subsidies undermines any economic benefit, but the winners are local business owners and those with outside income because their retirement income buys cheap products and services.
  3. This is further compounded by what manufacturing wages are left also fall to the level of service jobs. Many industries recruited through various government economic developers in our area push "competitive" wages along with costly taxpayer subsidies to lure new industry. The end result is little better than Wal-Mart. Those unable to live on Wal-Mart can't live on the new factory job either.

In other words, what is good for retirement communities and business is bad for working people. It's good for business unless the problem becomes so severe it ruins everyone. In the past service jobs were once a road to better jobs, but today they are the only job with nowhere else to go.

Working poor need help

Nov 5, Bristol Herald Courier

Re "Heating cost could push working poor into poverty," Oct. 15: I was present at the discussion and commend Tom Casteel and Washington County Social Services. The need is dire, and it's time to face reality and end this war on the poor. The working poor are already in poverty because it's in the interest of some to have it this way. The real poverty rate is about 25 percent for the Tri-Cities, while charities are at the breaking point.

We need self-sufficiency, not dependency or welfare. Government poverty standards are decades out of date. Written in 1964 based on a family in 1955, it's based on food adjusted for inflation and ignores modern economic reality.

The Self-Sufficiency Standard measures how much income is needed meet actual basic needs - without public or private assistance. It's location - and family-specific and includes food, housing, transportation, taxes, tax credits, child care, etc. It costs money to hold a job.

A single person must earn $14,905 to live in Bristol and Washington County, far above the $8,990 official poverty level. A single adult with an infant needs $19,000, or about $9 an hour, 40 hours per week, even with tax credits. It's time to stop deluding ourselves about living on most service jobs. Does anyone really think a family of four can live on $18,400?

The cost of living in tourist/retirement communities is often as high or higher than in a state's urban areas. Remember our recent property assessments? That $35 million water treatment plant for Washington County? The Herald Courier did an excellent series on exploding housing prices in July.

We want people off welfare, then scream at raising the minimum wage. The loss of Dana will make matters much worse, while this worthless $3.1 million Artisan Center won't feed a single child. I know where we can get $3.1 million for fuel assistance!

Think about that as we squander $900,000 on an ad campaign to convince residents that a $7 an hour temp job in local industry is a great deal. I'm still waiting for that list of 300 industrial jobs we can't fill in Washington County.

Lewis Loflin
Bristol, VA.

The simple answer to end poverty and promote self-sufficiency is better wages or reduce the cost of living. Instead we subsidize poverty and trap thousands into living off the government. Companies are lured here for cheap labor and don't seem to understand why they can't hire desirable people.

Local government, unwilling to discuss wage issues, is getting HUD funds to run an ad campaign to convince people factory jobs at $7 an hour are great. Many do go to college here only to find out they are worse off because pay scales don't offset the cost of college loans and nobody wants college graduates here anyway. I wrote the following piece printed in the Bristol Herald Courier September 30, 2005:

Job claims are unproven

Re "Officials: Workers needed for jobs," Sept. 28: This is just nonsense. Washington County officials "perception" that if they "build it, they will come" and just throwing money around doesn't address the real problems of underemployment and education. We need an adult re-education program combined with higher pay scales. One without the other just won;t work.

Snack Alliance (formerly Moore's) in Bristol is a good example. According to the Virginia Employment Commission, they start at $8 an hour, $9 for an electromechanical tech. According to the Virginia Coalfields Economic Development Authority that electromechanical job should pay $16 an hour.

Many of those willing to work at $8 an hour can't pass a drug test, background check or lack education. Even $9 an hour isn't enough to live on, forcing workers to get a second job made impossible by rotating shifts. Dairy Queen in Abingdon is paying $7 an hour.

Many wrongly assume vocational trades are occupied by losers, while college graduates are assumed too "over qualified" to do industrial work. This attitude must end. Many residents need to repeat two years of high school plus a year or two of college. Many college degrees are worthless in the job market, and underemployed college graduates must be willing to retrain into welding, electronics, etc. Industry must be willing to pay more than $1 above Dairy Queen.

What 300 jobs? What companies? Let's see a list with pay scales and job requirements. In my several years as a part-time adjunct professor in electricity and electronics, I know we have good people out there. Tell us what you need. I'm fed up with hearing about "jobs" when nobody will tell us what or where they are. Or is this talk to get government grants?

We must stop squandering millions on pork-barrel waste and hype. Five years and more than $60 million invested at Bristol Virginia Utilities hasn't produced a single job. Those tobacco grants were supposed to be for education.

Economic development must be more than pork and spending grants. Address the real "perception" problem in Abingdon.

Lewis Loflin
Bristol, VA.


The real answer to all of this is better pay and it won't happen. The national economy is destroying the working class and this problem is made worse here by a hostile anti-labor political environment and a constant war on the poor in the Bristol community. We want people to be self sufficient and earn there own way, but not if it means changing the status quo. These attitudes must be addressed before any real progress can be made.

For further information about the Standard, go to http://selfsufficiencystandard.org The Center for Women's Welfare.

Fuel Assistance available to needy families October 21, 2005 Bristol Herald Courier

Assistance is available to households who have a heat expense and meet income and other eligibility requirements. Fuel Assistance is a supplemental program intended to assist households primarily in meeting their home energy needs. To qualify for Fuel Assistance, the maximum gross monthly income is $1,037 for a household of one and $2,097 for a family of four.

The Energy Assistance Program is funded by the federal Low-Income Home Energy Assistance Program block grant. The Fuel Assistance component has been in existence since 1979 and each year serves approximately 100,000 households across the Commonwealth, while the Crisis component serves approximately 18,000 households.

During the summer of 2005, the Cooling component served approximately 40,000 households in Virginia. Visit http://www.dss.state.va.us/benefit/energyasst.html. Families and individuals must apply at their local department of social services by Nov. 14.

Income Bristol

SOURCEFederal Register, Vol. 68, No. 26, February 7, 2003, pp. 6456-6458. They refer to the previous year, in this case 2002. Programs using the guidelines (or percentage multiples of the guidelines for instance, 125 percent or 185 percent of the guidelines) in determining eligibility include Head Start, the Food Stamp Program, the National School Lunch Program, the Low-Income Home Energy Assistance Program, and the Children's Health Insurance Program.

Note that in general, cash public assistance programs (Temporary Assistance for Needy Families and Supplemental Security Income) do NOT use the poverty guidelines in determining eligibility. The Earned Income Tax Credit program also does NOT use the poverty guidelines to determine eligibility.


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