One in three households in California — about 3.3 million families — are struggling to reach a decent standard of living, even though most of those households include full-time workers, according to a report from nonprofit coalition United Ways of California.
In its statewide report released this week, Struggling to Stay Afloat: The Real Cost Measure in California 2018, United Ways used an approach it calls the “real cost measure” to determine the local costs of living that go beyond food and housing.
The real cost measure changes across different cities, areas and even neighborhoods in the state, depending on childcare, healthcare and transportation, in addition to the high cost of food and housing — all of which it takes into effect to determine what the United Ways team calls a “decent standard of living.”
Perhaps unsurprisingly, the cost of housing weighs heavy on Californians, the report found. About 38 percent of households spend more than 30 percent of their income on housing, and families below the federal poverty level spend as much as 79 percent of their income on their homes.
In Alameda County, the researchers estimate that a household consisting of two adults, one infant and one school-age child would need $89,665 per year to meet an annual housing cost of $25,236 (for rent at about $2,100 per month), $13,944 worth of food, $8,856 for a year of healthcare for the family, $10,188 for transportation expenses, $18,144 for childcare, $7,632 for miscellaneous expenses, and $5,665 in taxes.
That’s just below the median household income for a family of that size in Alameda County, which is $98,744, but the report found that more than a quarter of households in the county — 28 percent — are living below the real cost measure budget for their size.
In Contra Costa County, the figures are similar. The report put the real cost measure at $87,623 for that family of four, but 27 percent of households are not able to meet their costs.
In San Mateo County, the Real Cost Measure jumps up to $97,108 for a family with two adults, one infant and one school-aged child, with higher housing costs ($27,468 per year), pricier childcare ($21,132 per year) and higher taxes ($6,952) driving the necessary budget higher than the East Bay counties. In Santa Clara County, the same size family would need $92,084 to meet those various costs in a year. In both those counties, about 23 percent of households are living below the Real Cost Measure the report estimated for their family size.
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Despite the high cost of living in the Bay Area, the area actually sees a lower percentage of households struggling to meet their Real Cost Measures, according to the report. About 35 percent of households in the Greater Los Angeles and Inland Empire areas fall below the Real Cost Measure, and 37 percent of the Central Valley do.
The Bay Area’s low unemployment and high wages could contribute to the lower percentages of struggling families, but there is a worrying trend: the percentage of households falling below the measure in Alameda and Contra Costa counties have increased since 2015, which is the last time United Ways conducted this study. In Contra Costa County, the percentage jumped from 24 percent in 2015 to 27 percent in this study, while in Alameda County, the percentage increased from 25 percent in 2015 to 28 percent.
Certain communities of people are more impacted by the high cost of living than others, the report suggests.
A high proportion — 72 percent — of single mothers in California fall below the Real Cost Measure. And 45 percent of households led by a person born outside the U.S. live below the Real Cost Measure — 63 percent of households where that leader is not a U.S. citizen.
While being unemployed or underemployed could certainly contribute to affordability issues, researchers found that 90 percent of the households living below the Real Cost Measure for their area included at least one working adult. In Alameda and Santa Clara counties, that number jumped to 98 percent, and in Contra Costa and San Mateo counties, it was 97 percent.
“They are earning less than it takes to meet decent standard of living, and most of those people are working full time,” Pete Manzo, CEO and President of United Ways of California, said in a call with reporters about the report. “The challenge isn’t so much, ‘get a job’ or ‘get employed.’ The challenge is how to earn more — how can we increase income for those families.”
The full report and the interactive county guide can be found at www.unitedwaysca.org/realcost