(We like it when Mr. Rosenberg writes here – promoted by jsw)

Front-paged at OpenLeft

Note: This is only about California, but the message is national.  Our measures of economic need are severely out of whack, which is a significant contributing factor in the making of bad social policy

A new report from the California Budget Project, the fifth iteration of “Making Ends Meet: How Much Does It Cost To Raise A Family In California?” [PDF], shows that the basic cost of living a no-frills, no-savings existence in California is substantially above the poverty line, the minimum wage, and even–for most families analyzed–the median hourly wage.  Nearly half of California’s full-time workers cannot make ends meet in a two-parent, two child family in which both parents work, and thus must pay for childcare-one of four family types analyzed.  Things are even worse for single-parent or single-income famities.

Among other things, the report strongly indicates the need for explanding SCHIP (the State Children’s Health Insurance Program), which President Bush recently vetoed.  “It shows the president is wrong. That famiy with inomes of up to and above 300 percent of poverty level do need asisitaint to afford health care if they don’t have emloyee-based health care,” said long-time CBP executive director Jean Ross.

According Ross, the no-frills budgets, “don’t provide any room for saivngs, for retireent or college,” nor do they provide services many now take for granted. “No DSL or cable.  Just bare-bones utilities,” Ross said.  Because each iteration of the report involves improvements in methodology, Ross cautioned that the reports could not be strictly compared to one another, but were primarily intended to provide the best possible contemporary analysis at the time of release.

Poverty Line Inadequate

Results from this approach, which analyzes actual living expenses on a regional basis, set a substantially higher level for keeping ones head above water than the poverty line, which was set back in the early 1960s at three times the cost of a basic food budget by a government economist Mollie Orshansky, who never intended it for general use as a poverty threashold.  But it was the first thing that came to hand when general insterest in poverty suddenly exploded, and has never revised, much less replaced, except for inflation adjustments.

“Orhansky just passed away this past year,” Ross noted, while pointing to “general and widespread agreemnt that it [the poverty line] is inadequate.”

Not only have increases in other costs-such as health care and child care-greatly exceeded food since then, there are substantial regional differences as well, with particularly high housing costs throughout California, especially in the Bay Area.

The report analyzes living expenses for four family types: a single adult, a single working parent with two children, a two-parent family with two children and one working parent, and two working parents with two children. Of these, only the single adult family income requirements indicate that a substantial number of them earn enough to get by.  Compared to statewide median wage of 17.42 an hour, a single adult needs $13.62 an hour ($11.45 to $14.55, according to region), a single-parent family needs $28.72 ($23.88 to $31.67), a two-parent family with one parent working needs $24.22 an hour ($21.37 to $26.35), and a two-parent family with both working needs $17.39 an hour ($15.05 to $18.53).

[From CBP Report]

In contrast to using the poverty, The report explains:

This report takes an alternate approach. It starts from the ground up, building a basic family budget based on the cost of housing, food, child care, and other essentials needed to support a family without public or private assistance. The standard of living envisioned is more than a “bare bones” existence, yet covers only basic expenses, allowing little to no room for “extras” such as college savings, vacations, or emergencies.

Specifically, this report estimates typical costs of housing and utilities, child care, transportation, food, health coverage, payroll and income taxes, and miscellaneous expenses for four hypothetical families: a single adult, a single working parent with two children, a two-parent family with two children and one working parent, and two working parents with two children. Because housing and other costs vary throughout California, this report provides basic family budgets for 10 regions within the state.

The breakdown of family expenses analyzed is as follows:

A single adult needs an annual income of $28,336, equivalent to an hourly wage of $13.62. Regional estimates range from $23,815 to $30,262 ($11.45 to $14.55 per hour). A family with two working parents needs an annual income of $72,343, equivalent to each parent working full-time for an hourly wage of $17.39. Regional estimates range from $62,624 to $77,069 ($15.05 to $18.53 per hour for each parent). A single-parent family needs an annual income of $59,732, equivalent to an hourly wage of $28.72. Regional estimates range from $49,672 to $65,864 ($23.88 to $31.67 per hour). A two-parent family with one employed parent needs an annual income of $50,383, equivalent to an hourly wage of $24.22. Regional estimates range from $44,448 to $54,815 ($21.37 to $26.35 per hour).

Full report-with regional breakdowns and more-is here [PDF]