Today, the Economic Policy Institute released an update its signature Family Budget Calculator, which shows what’s required for families to attain a secure yet modest standard of living in 618 communities throughout the country. The update contains new data through 2014 and includes budgets for ten family types including, for the first time, adults without children.
The Family Budget Calculator is a stark reminder that many workers in low-wage jobs do not earn enough to meet their family’s basic needs. Even after adjusting for higher state and city minimum wages, there is nowhere in the country where a minimum-wage worker—even a single adult without children—earns enough to meet the requirements of their local family budget.
“Wage growth has been stagnant for most workers for decades and, as a result, there is a mismatch between what workers are paid and what it takes to live and support a family,” said EPI Senior Economist Elise Gould. “We need a variety of policies to boost wage growth, which includes a higher minimum wage, stronger overtime rules, collective bargaining rights, and enforcement of labor standards as well as the pursuit of a full-employment economy.”
Washington, DC, topped the list of most expensive metro areas, with a recommended budget of $106,493 for a two-parent, two-child household. The top ten most expensive metro areas for a two-parent, two-child household are:
- Washington, DC ($106,493)
- Nassau-Suffolk, NY ($103,606)
- Westchester County, NY ($99,592)
- New York City, NY ($98,722)
- Stamford-Norwalk, Conn. ($97,350)
- Honolulu, Hawaii ($94,092)
- Poughkeepsie-Newburgh-Middletown, NY ($92,837)
- Ithaca, NY ($92,603)
- San Francisco, Cali. ($91,785)
- Danbury, Conn. ($89,205)
EPI’s Family Budget Calculator improves on traditional poverty thresholds by taking into account geographic differences in cost of living and factoring in a broader range of expenses. The federal poverty line, which was created to measure serious economic deprivation, is set at the national level and does not account for community-specific costs.
The Family Budget Calculator takes into account the cost of housing, food, transportation, child care, health care, and other basic necessities such as clothing and household supplies. Costs vary widely by family type as well as geographic area. Notably, among two-parent, two-child families, child care costs exceed rent in the vast majority of family budget areas.
Three major changes were included in this family budget update. In addition to four new family types (single and married couples without children and families with four children), the new health cost calculation reflects premiums available in the health insurance exchanges established by the Affordable Care Act, and the “other necessities” category includes additional items previously excluded, such as housekeeping supplies and telephone services.
A full explanation of the Family Budget Calculator is available in the accompanying briefing paper, What Families Need to Get By.