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Tag: low income

Census: Bad as poverty and low income are in Idaho, state holds its own nationally

A snapshot of Idaho vs U.S. averages. Click photo to enlarge.

Poverty and low incomes plague Idaho, but the Gem State is better off than much of the country in both areas, according to new U.S. Census Bureau reports of 2017 data.

Census data released Sept. 13 shows that Idaho has the 26th highest rate of people in poverty at 12.8 percent, but the census categorizes Idaho at the second lowest level of five levels. The top level is 18 percent, then 16.0 to 17.9 percent, followed by 13.0 to 15.9 percent and 11.0 to 12.9 percent. Only 13 states came in below 11 percent. The national average is 13.4 percent.

The census classified 216,309 Idaho residents in poverty, a drop of 21,136 from 2016 – but still nearly the equivalent of the entire Boise population. Idaho had the second highest percentage point decrease in poverty in 2017 behind Washington, D.C., according to the census.

Strong on Income Equality

Idaho may rank 41st in median household income at $52,225, but the Census Bureau has Idaho in the second highest income level out of four levels. The census classifies household income as above $60,000, $50,000 $59,999, $45,000 to $49,000 and less than $45,000.

“We’re at the bottom of the second rung,” noted Janell Hyer, an Idaho Department of Labor research analyst, who went on to set Idaho apart from third and fourth rung states: “We have a strong, growing economy.”

The census recorded a median household income drop of about $220 from 2016 to 2017 but noted a margin of error of $871. Hyer would rather refer to the state’s wages covered by unemployment insurance, which covers about 90 to 95 percent of working individuals. Covered wages rose from $39,700 to $41,300 from 2016 to 2017, she said.

Idaho is also among the 10 states with the lowest income inequality between the rich and the other 90-plus percent of the population, which is due to the fairly small number of very rich in Idaho.

“I’m glad I live in a state where we are all about the same,” Hyer said.

“We don’t have the same density of people at a really high salary scale,” said Wil Gehl, executive director of The Community Action Partnership Association of Idaho, which fights the causes of poverty.

Idaho’s housing prices are close to the national median, but Idaho’s household income falls about $8,000 below the national median household income of $60,336, according to the Census Bureau.

“We are seeing a rising rental burden,” said Wyatt Schroeder, executive director of CATCH or Charitable Assistance to Community’s Homeless. “We’ve caught up with the national average (in housing prices). We are still so far behind in wages. How many people pay more than one-third of gross income on rent?”

Idaho, however, rates in the best of four categories in terms of income inequality. Utah, Wyoming, South Dakota, Nebraska, Wisconsin, New Hampshire, Alaska and Hawaii also were in the best category for income inequality.

Poverty

The poverty rate in Idaho was at 12.8 percent in 2017, a half percentage point below the national average of 13.4 percent. Idaho’s poverty rate dropped from 14.4 percent in 2016.

This is reflected in the downward trend in Supplemental Nutrition Assistance Program (SNAP) or food stamps participants from 235,502 in January 2012 to 166,433 in July 2017 and 151,748 in July 2018, according to Idaho Department of Health and Welfare statistics.

The census counted 216,309 Idahoans living in poverty in 2017 – a family of four earning less than $24,600 or an individual earning less than $12,060.

However, Gehl said food insecurity is still a significant problem in Idaho.

“We are not seeing a decline in food insecurity across the state,” Gehl said. “Our demand increased 6 to 7 percent. Fewer people are on SNAP, but more people seek food assistance.”

The census determined that the number of Idaho residents living below 50 percent of the poverty line has decreased from 102,062 in 2016 to 92,767 in 2017 or 5.5 percent of the population. The national rate was 6.0 percent. Idaho ranked 31st in the nation.

“There has definitely been some gain in the area of people with no income or extremely limited income,” Gehl said.

The census also noted that 296,964 Idaho residents live at below 125 percent of the poverty line or 17.6 percent of the population, a hair below the 17.9 percent national average.

The data comes from the American Community Survey, the bureau’s annual survey of about 3,500 addresses for demographic, social, economic and housing data.

For the low-income, banks are moving out of reach

Idaho Independent Bank's office in Boise.
Idaho Independent Bank’s office in Boise.  The bank refers customers if needed to the Bank On financial literacy program. Photo by Anne Wallace Allen.

Banking isn’t easy if you’re poor.

Nationwide, checking accounts are getting more expensive and fees are getting harder to avoid, according to the most recent MoneyRates.com Checking Account Fee Survey. “Compared with five years ago, monthly maintenance fees are up by 8 percent, overdraft fees are up by 9.4 percent, and ATM fees are up by 10.7 percent,” the organization noted. For example, the average maintenance fee is $13.24 per month, or $158.88 a year to keep the account open, up from $153.96 a year ago. In addition, the number of banks offering free checking has declined from 36.62 percent in 2013 to 27.88 percent in 2018, while the minimum balance required to waive fees has increased to $11,845. “This threshold has nearly tripled over the past five years, and is up by over $1,000 in just the last six months,” the organization said.

According to the Federal Deposit Insurance Corp., 7 percent of U.S. households, or about 9 million, were “unbanked” in 2015, the most recent year for which numbers are available. “An additional 19.9 percent of U.S. households (24.5 million) were underbanked, meaning that the household had a checking or savings account but also obtained financial products and services outside of the banking system,” the FDIC added.

Idaho banks said they are attempting to address this population’s needs.

photo of jason meyerhoeffer
Jason Meyerhoeffer

“As a mutual savings bank, serving low-income populations is fundamental to our mission,” said Jason A. Meyerhoeffer, president and CEO of First Federal, in Twin Falls. “I don’t believe there is a high threshold for the ‘legal requirements’ needed to open an account, but laws do require us to adequately verify the identity of a customer prior to opening an account. As for serving lower-income populations, we offer accounts with no service charges or fees and very low opening balance requirements.”

“We have checking accounts with no fee and no income requirements, which means our services are available to anyone regardless of income level,” said Kelly Parker, vice president of community relations & product development for Idaho Independent Bank, in Boise.

People with a history of charged-off checking accounts at other banks are referred to the Bank On financial literacy program, available in southern Idaho since 2013 and now expanding to North Idaho, Parker said. “This program offers financial education for adults and, upon completion of the program, we’ll open a checking account for them with no monthly fees,” she said.

photo of bruce lowry
Bruce Lowry

“We make a concerted effort to help with financial literacy for populations who may not be familiar with modern banking or have concerns about how banking works,” said Bruce Lowry, president and chief executive officer of Ireland Bank, based in Malad City. “Each of our branches finds opportunities to reach out, provide education, charitable donations or a helping hand to reach low-income populations.” Low-income patrons are particularly an issue for Ireland Bank because many of its branches are located in rural areas, he said.

Low-income people need more than just checking. They also need business loans and mortgages. “We are very willing to make small business and personal loans that often times benefit this population,” Lowry said.

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Julie Fogerson

Similarly, banks are looking to help low-income people buy homes. “In Idaho last year, Wells Fargo launched its first ever statewide down payment assistance program, bringing $3.55 million into the state,” said Julie Fogerson,  assistant vice president of Idaho regional communications at Wells Fargo, in Boise. “Wells Fargo’s NeighborhoodLIFT program has become an important catalyst for homeownership in numerous cities across America. Funds were made available in Idaho virtually on June 5, and as of last month, all down payment monies were allocated, helping get more than 300 Idaho families into homes.” Funds are distributed through NeighborWorks Boise, she said.

The goal is to get people into banks rather than check-cashing companies, which typically cost more. “We don’t try to compete with the check cashing industry,” Meyerhoeffer said. “However, we do try to provide needed banking services. Most of the check cashing needs come from unbanked consumers. We try to help these people by bringing them into the banking system and offering them much lower-cost services.”

Another low-income banking avenue

A different method for providing banking services to low-income people, particularly for housing, is the community development financial institution (CDFI).

photo of bud compher
Bud Compher

Idaho has six certified CDFIs. “It’s an elite, nonprofit group with Idaho that have that CDFI status,” said Bud Compher Jr., CEO of NeighborWorks Boise, formerly Neighborhood Housing Services. “The funds come to us from the U.S. Treasury and NeighborWorks uses those funds to leverage other dollars for our lending operation. In 2016, the organization was awarded $500,000, and this year, the organization applied for $700,000, after not receiving anything in 2017. “It’s very competitive across the nation,” he said.

Typically, the funds are used to pay for second mortgages, while another organization pays for the first 80 percent of the mortgage, Compher said. “So between the two, that gives them their 100 percent financing, and they don’t have to do mortgage insurance,” he said. “It helps create affordability within monthly payments.”

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Mark Dahlquist
Before and after pictures of a Pocatello home funded by Neighborworks.
Before and after pictures of a Pocatello home funded by Neighborworks.

NeighborWorks Pocatello focuses more on home improvement loans that help people maintain the value of their houses by improvements including replacing the roof, wiring, or siding, said Mark Dahlquist, executive director. “It’s our mission to lend to people who don’t have access to affordable credit,” he said. “We saw a need in the community that there were residents who needed lending, particularly for fixing up their houses.” In an average year, the organization will deploy about $300,000 at interest rates ranging from 0 percent to 4 percent to help about 40 individuals, he said.

photo of dutch haarsma
Dutch Haarsma

The Idaho-Nevada CDFI, based in Boise, has provided about $75 million toward affordable housing since its inception, which it has leveraged to provide $403 million in financing, 3,000 units of housing, 6,200 construction jobs, and 500 permanent jobs, said Dutch Haarsma, president. “High-quality, sustainable projects that are an asset to your neighborhood,” he said. “If we do it right, you don’t know it’s affordable housing.” And it’s not just for the formerly homeless, but for the “working poor,” such as first responders and teachers. “That’s who’s in affordable housing these days.”