In 2016 the Oregon Legislature enacted Senate Bill 1532 which established a series of annual minimum wage rate increases in the state beginning in July 1, 2016 through July 1, 2022. Beginning July 1, 2023, the minimum wage rate will be indexed to inflation.
The increase in minimum wage has had a notable impact on enrollment for Head Start programs across the state, with fewer minimum wage earning families qualifying as below the federal poverty level. A typical Head Start program is mandated to serve children whose family income falls below Federal Poverty Guidelines, but may also serve children at higher income levels under certain circumstances. Oregon Head Start programs have experienced a dramatic increase in enrollment of children whose family income is between 100-130% of Federal Poverty guidelines, which is a special category of enrollment that Head Start programs may serve with authorization from the Office of Head Start. This authorization is only allowed if a program has demonstrated it has exhausted enrollment of children below the Federal poverty level.
Each Oregon Head Start program I have worked with has expressed that fewer families in their service areas are income eligible (family income below Federal Poverty Guidelines). They theorize that this is due to minimum wage increases. By analyzing statewide Head Start Program Information Reports (PIR) this theory can be supported. In the 2015-2016 program year 14 out of 21 Oregon Head Start programs used the 100-130% income category (this excludes AI/AN Head Start programs because they may serve a larger percentage of over income children). In the 2016-2017 program year this jumped to 19 of 21 Oregon Head Start programs. The number of children enrolled in the 100-130% of poverty-category also jumped, nearly doubling from 678 children in the 2015-2016 program year (representing 3.9% of all Head Start children served in the state) to 1,178 in the 2016-2017 program year, (representing 6.6% of all Head Start children served in the state of Oregon.) What happened between these two program years?
Between these two program years the minimum wage rose by $.50 per hour for standard and Portland Metro counties and $.25 for nonurban counties. While this seems like a very small amount, it effectively raised the annual income of a full time wage earner in most Oregon counties from $19,240 a year to $20,280. Federal Poverty Guidelines for a family of three in 2016 was at $20,160 per year. This means that from 2016 onward, a family of three with one full time wage earner no longer qualifies as living in poverty because of Oregon’s minimum wage increase.
Below is a graph comparing the annual income of a full time, minimum wage earner to the federal poverty level for a family of three (dark green) as well as 130% of the federal poverty level for a family of three (light green). As soon as the minimum wage increased in July of 2016, these families no longer qualified as below poverty, and would have to be enrolled in Head Start’s 100-130% of poverty category. In the graph this is represented when the blue line (annual income of one minimum wage earner) is between the two green lines (100% and 130% of the federal poverty level.)
The graph below shows enrollment in Oregon Head Start programs by enrollment category. The percentage of children enrolled in the “Income Eligibility” category (meaning their family income was below the federal poverty level) decreased to below 50% starting in the 2016-2017 program year. Since the increase in Oregon’s minimum wage, enrollment in the categories of “Homeless Children” and “Foster Children” have each increased. This is likely due to Oregon Head Start programs shifting the focus of their recruitment efforts as more and more families are no longer income eligible.
Over the past three years the increase in Oregon’s minimum wage has outpaced the increase in Federal Poverty Guidelines, which is calculated based on cost of living estimates. So long as this continues then fewer and fewer families will qualify as income eligible for Head Start services. What kind of families will have a harder time qualifying as income eligible?
- Two parent families with one child: one parent working full time and one parent in school – In the 2017-2018 program year 692 Oregon Head Start families were comprised of two parent families with one parent in school or training. This is down from 940 in the 2013-2015 program year, two program years before the minimum wage increase first took effect.
- One parent families with one to two children and one wage earner – PIR data does not report the number of children in the family, but it does report the number of single parent families with an employed parent. In the 2017-2018 program year there were 3,464 Head Start families with a single parent who was employed. This is near the top of an upward trend, up 20.2% from 2,882 in the 2011-2012 program year.
- Two parent families with parents who work part time jobs – An increasing number of Head Start families have two parents who are employed. There were 1,729 such families in the 2017-2018 program year, up from 1,568 in the 2011-2012 program year. Any two parent families with two or more children must balance work along with the duties of parenting their children. PIR data does not capture specific work schedules or full-time vs. part-time work status, but many families resort to staggered work schedules and part time work to ensure that at least one parent is available to take care of children when they are not at school.
While the rise in minimum wage in Oregon is a welcome development for low income families, Head Start programs in the state must anticipate an increasing number of families falling in the 100-130% of poverty category and must shift recruitment efforts to target homeless families and children in foster care. Housing trends in the state indicate an increased cost of living (median rent is up 24% over the past 8 years, for instance) which may eliminate many of the positive impacts brought by minimum wage increases. So while these families may experience marginal increases in family income they may still be in need of social services due to a lack of affordable housing, childcare and healthcare in the state.
If you would like an analysis of your program’s enrollment as well as your service area’s poverty rate, cost of living and median family income, then please contact me. I have worked with many Head Start programs in Oregon, Washington, Delaware and other states across the nation with a state minimum wage that is higher than the federal minimum wage. I provide Community Assessment and Community Assessment updates for Head Start and Early Head Start programs and have also worked with Washington ECEAP, Oregon Pre-K and Arkansas ABC programs.