California families must earn far more than the minimum wage and in some cases as much or more than the median hourly income just to keep up with the bare-bones expenses of living, a report released Tuesday said.
A family of four with two working parents needs a yearly income of $72,343 just to cover such costs as housing, medical care, transportation and food, according to the report, "Making Ends Meet," by the California Budget Project, a nonprofit public policy research group that advocates for working Californians.
That figure doesn't even include putting away savings for retirement or college, or extras such as cable television, an Internet connection or vacations, the report said.
The median hourly wage in 2006 was $17.42. But to make ends meet, two working parents in a family of four would have to each earn $17.39, just three cents short of the median, the report said. The median is the point at which half make more and half make less.
The wage-earner in a family of four with only one working parent would need to make considerably more, $24.22 an hour. And a single parent supporting two children would have to make $28.72 an hour, the report said, a full $11.30 more than the median.
Even a single adult would have to make close to double the $7.50-an-hour minimum wage, the report said, requiring a full-time job paying $13.62 to get by.
The culprits are California's perennial high cost of housing, even with the recent downturn in the market, and exploding health care costs.
Many Californians who make less than what it takes to pay the bills wouldn't qualify for government programs, such as tax breaks and health insurance for children, said Jean Ross, executive director of the California Budget Project.
The numbers "show the gap between where public programs leave off and what it really takes to live in California," Ross said.
Many Californians are living paycheck to paycheck, "one transmission repair from a personal financial disaster," she said.
Robert Moffit of the conservative Heritage Foundation said such statistics show the need for a health care system that offers tax credits or vouchers to offset escalating costs.
It also shows that California needs to improve the climate for businesses that provide well-paying jobs, said Moffit, the director for the Center for Health Policy Studies at the Washington, D.C.-based foundation. He said businesses in California are overtaxed, while the state government routinely spends more than it takes in.
"You need to get business back into the state to increase overall wealth and start lifting the boats," Moffit said. "Redistributing the wealth of a shrinking pie doesn't help anything."
Ross said the study should help policymakers figure out the answers to pressing questions such as what families have to earn to afford health care.
The numbers are relevant to the debate between congressional Democrats and President Bush over how much a family must make to qualify for federal money through the State Children's Health Insurance Program, she said. Bush is pushing for a lower income threshold than is favored by Democrats.
"It shows that the president is wrong in this regard," Ross said.
The study is also meant to help researchers, workers who counsel low-income families, and the families themselves.
Many families make up the gap between income and expenses by relying on credit, Ross said. Some have resorted to cashing in on their investments in their homes by refinancing mortgages.
Others double- or triple-up in bedrooms, she said. Young adults move back in with their parents. Couples work different shifts to avoid child care expenses, or rely on "less than optimal" arrangements such as leaving children with neighbors.
"There are probably as many coping strategies as there are families in California," Ross said.
The study assumed that families paid their own health care costs. Ross conceded that some might get insurance through their employers, while others forgo it altogether.
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A family of four with two working parents needs a yearly income of $72,343 just to cover such costs as housing, medical care, transportation and food, according to the report, "Making Ends Meet," by the California Budget Project, a nonprofit public policy research group that advocates for working Californians.
That figure doesn't even include putting away savings for retirement or college, or extras such as cable television, an Internet connection or vacations, the report said.
The median hourly wage in 2006 was $17.42. But to make ends meet, two working parents in a family of four would have to each earn $17.39, just three cents short of the median, the report said. The median is the point at which half make more and half make less.
The wage-earner in a family of four with only one working parent would need to make considerably more, $24.22 an hour. And a single parent supporting two children would have to make $28.72 an hour, the report said, a full $11.30 more than the median.
Even a single adult would have to make close to double the $7.50-an-hour minimum wage, the report said, requiring a full-time job paying $13.62 to get by.
The culprits are California's perennial high cost of housing, even with the recent downturn in the market, and exploding health care costs.
Many Californians who make less than what it takes to pay the bills wouldn't qualify for government programs, such as tax breaks and health insurance for children, said Jean Ross, executive director of the California Budget Project.
The numbers "show the gap between where public programs leave off and what it really takes to live in California," Ross said.
Many Californians are living paycheck to paycheck, "one transmission repair from a personal financial disaster," she said.
Robert Moffit of the conservative Heritage Foundation said such statistics show the need for a health care system that offers tax credits or vouchers to offset escalating costs.
It also shows that California needs to improve the climate for businesses that provide well-paying jobs, said Moffit, the director for the Center for Health Policy Studies at the Washington, D.C.-based foundation. He said businesses in California are overtaxed, while the state government routinely spends more than it takes in.
"You need to get business back into the state to increase overall wealth and start lifting the boats," Moffit said. "Redistributing the wealth of a shrinking pie doesn't help anything."
Ross said the study should help policymakers figure out the answers to pressing questions such as what families have to earn to afford health care.
The numbers are relevant to the debate between congressional Democrats and President Bush over how much a family must make to qualify for federal money through the State Children's Health Insurance Program, she said. Bush is pushing for a lower income threshold than is favored by Democrats.
"It shows that the president is wrong in this regard," Ross said.
The study is also meant to help researchers, workers who counsel low-income families, and the families themselves.
Many families make up the gap between income and expenses by relying on credit, Ross said. Some have resorted to cashing in on their investments in their homes by refinancing mortgages.
Others double- or triple-up in bedrooms, she said. Young adults move back in with their parents. Couples work different shifts to avoid child care expenses, or rely on "less than optimal" arrangements such as leaving children with neighbors.
"There are probably as many coping strategies as there are families in California," Ross said.
The study assumed that families paid their own health care costs. Ross conceded that some might get insurance through their employers, while others forgo it altogether.
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My brother and his GF still live in California and he makes over 100K but he can't afford a house. At least one he wants to live in that is.
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