Source: Elise Gould, Hilary Wething, Natalie Sabadish, and Nicholas Finio, Economic Policy Institute, Issue Brief, #368, July 3, 2013
From the summary:
The income level necessary for families to secure an adequate but modest living standard is an important economic yardstick. While poverty thresholds, generally set at the national level, help to evaluate what it takes for families to live free of serious economic deprivation, the Economic Policy Institute’s (EPI) Family Budget Calculator—recently updated for 2013—offers a broader measure of economic welfare and provides an additional metric for academics and policy experts looking for comprehensive measures of economic security. The basic family budgets presented in this report, as well as those presented via the Family Budget Calculator itself, measure the income families need in order to attain a secure yet modest living standard where they live by estimating community-specific costs of housing, food, child care, transportation, health care, other necessities, and taxes….
…This issue brief begins by explaining in greater detail the advantages of EPI’s basic family budgets as compared with the federal poverty line and the Supplemental Poverty Measure. It then illustrates the budgets’ most important feature—their high degree of customizability by family type and community—by demonstrating how family budgets vary significantly depending on family size and geographical area.
The following is a sample of findings from the 2013 update of EPI’s Family Budget Calculator:
– The basic family budget for a two-parent, two-child family ranges from $48,144 (Marshall County, Miss.) to $93,502 (New York City). In the median family budget area, Newaygo County, Mich., a two-parent, two-child family needs $63,238 to secure an adequate but modest living standard. This is well above the 2012 poverty threshold of $23,283 for this family type.
– For a two-parent, two-child household, housing ranges from 10.8 percent to 25.6 percent of a family’s budget. Housing for this family type is most expensive in Hilo, Hawaii ($1,833 per month), and is least expensive in both Macon and Smith counties, Tenn. ($570 per month).
– Across regions and family types, child care costs account for the greatest variability in family budgets. Monthly child care costs for a two-parent, one-child household range from $334 in rural Mississippi to $1,318 in Washington, D.C. However, in the latter, monthly child care costs for a two-parent, three-child household are $2,114—60 percent higher than for a two-parent, one-child household.
– Even in the best of economic times, many parents in low-wage jobs will not earn enough through work to meet basic family needs. Annual wages for one full-time, full-year minimum-wage worker total $15,080, far below what is necessary for a one-parent, one-child family to live in even the least expensive family budget area….