Economic snapshot | Budget Taxes and Public Investment

Family budgets and the poverty line

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A weekly presentation of downloadable charts and short analyses designed to graphically illustrate important economic issues. Updated every Wednesday.

Snapshot for July 25, 2001.

Family budgets and the poverty line
Family budgets are calculated by determining how much income families need to spend to have a safe and decent standard of living. The expenses that make up such budgets include the local cost of housing, health insurance and health care, licensed childcare, transportation, food, taxes, and other necessities based on the composition of the family and where they live. Housing and child care are the two the largest components of family budgets.

Regardless of the U.S. metropolitan region examined, the official poverty line is never enough to cover a family’s total expenses for basic needs. The official poverty line was $13,423 in 1999 for a family with one adult and two children, but the actual family budget needed to meet basic needs for such a family ranged from $21,989 in Hattiesburg, Miss. to $48,606 in Nassau-Suffolk County, N.Y. As the figure below illustrates, the poverty line does not measure how much income a family truly needs to make ends meet and, in fact, often falls short by half.

Family budgets for a single parent with a 4 year old and an 8 year old in 1999

To learn more about the hardships endured by American families, read EPI’s Hardships in America: The Real Story of Working Families, or check the online family budgets calculator to determine the basic needs income needed for various family types in your area.

This week’s Snapshot by EPI Economist Heather Boushey.

Check out the archive for past Economic Snapshots.


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