The consensus of organizations serving low- and moderate-income (LMI) residents is that economic conditions continue to deteriorate, but fewer organizations are reporting so, according to the latest issue of LMI Economic Conditions. The Federal Reserve Bank of Kansas City publishes LMI Economic Conditions twice a year, to give our internal and external stakeholders a broad and deep understanding of the economic conditions faced by LMI individuals and communities.
Much of the report is drawn from the Kansas City Fed’s biannual LMI Survey, distributed in January and July to representatives of organizations that provide services directly to LMI individuals and who regularly interact personally with the LMI population. (Sign up here to participate.) The report also includes statistics produced internally by Kansas City Fed staff using individual-level data.
Rent takes a larger bite of LMI budgets
The September report shows that job availability is strong, but survey contacts report that wages are too low to support a household and are stagnant—a situation exacerbated by higher prices for items that typically occupy a large share of LMI budgets, such as rent. Further, only 45 percent of LMI individuals of working age are actively participating in the labor force. This problem was discussed in detail as a special topic in the March 2018 issue. Lack of skills, inadequate or unaffordable childcare and unreliable transportation are the primary factors affecting labor force participation. Survey contacts continue to report an insufficient supply of affordable housing and that increased demand is outstripping new supply. Access to credit remains tight.
Special topics warrant a closer look
Along with an overall assessment of economic conditions, each report contains detailed discussions of labor market, housing and credit conditions specific to LMI individuals and communities. Each issue also contains a special topic—in the latest issue, income and health. Other recent special topics are listed in the table below.
LMI residents face greater health challenges
Compared with higher-income people, LMI individuals and families are much less likely to have health insurance, which can lead to higher out-of-pocket costs, and in turn, a lack of care in some cases. LMI residents also are more likely to have chronic illnesses and to self-report fair or poor health. For a significant share, these are disabling conditions that often prevent them from working.