There was good news and bad news concerning the job market recently. The Labor Department reported that over 190,000 jobs were added in March. That is great for those that were looking for and found employment. The bad news is that many of these jobs were in retail, hospitality and home health care where the salaries are unlikely to pay enough for workers to cover the cost of fundamentals like housing, utilities, food, health care, transportation and, in the case of working parents, child care. A recent study conducted by Wider Opportunities for Women, a nonprofit group, builds on an analysis the group and some state and local partners have been conducting since 1995 on how much income it takes to meet basic needs or ends meet without relying on public subsidies. This study aims to set thresholds for economic stability rather than mere survival and takes into account saving for retirement and emergencies.
Wider Opportunities wanted to show how much families need to earn if they want to save for their children’s college education or for a down payment on a home. According to Michael Sherraden, director of the Center for Social Development at Washington University in St. Louis, this study is “an index that asks how can a family have a little grasp at the middle class. If we’re interested in families being able to be stable and not have their lives disrupted and have a little protection and backup and be able to educate their children, then this is the way we have to think.”
To develop the amount one needed to pay for these expenses, the report’s authors examined government and other publicly available data to determine basic costs of living. The income projections do not take into account extras like gifts or eating out. Áine Duggan, vice president for research, policy and education at the Food Bank for New York City, thinks that about 33% of the group’s clients are working but not earning enough to cover basic needs, much less saving for retirement or an emergency. She said that among households with children and annual incomes of less than $25,000, 83 % of them would not be able to afford food within three months of losing the family income.
According to this study, here are the yearly amounts it would take for a family to survive and meet its basic needs:
- One Worker: $30,012
- Two Workers: $42,504
- One Worker, One Infant: $46,368
- One Worker, Two Young Children: $57,756
- Two Workers, Two Children: $67,920
I was very surprised with these findings. I know the amount needed to live varies depending on where you live (one would need more to survive in New York City than they would in San Antonio) but I thought these numbers were pretty high. In my next post I will discuss why I was surprised at these numbers and go over my situation with you. For this post, I would love to hear what you think. From your experience, do you think these figures are accurate or are too high or maybe even too low? What does your situation look like and are you able to make ends meet on the amounts listed in this study or do you feel like you are struggling?
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