|September 25, 2021|
United Ways challenges stats on families in financial struggle
Nearly one in three California families are struggling to cover their daily needs, according to a new study released by United Ways of California.
The study found that that the share of families that struggle financially is 250 percent higher in California than what is factored in the federal government’s measure. It amounts to 3.5 million families who are unable to meet basic needs. Latino and Black households are at much higher rates.
United Ways says federal government uses an outdated formula for calculating poverty — one that fails to take into account how much rent, transportation, healthcare, and other basic needs cost in California.
According to the study, the actual cost of living for a family of four (two adults, one pre-schooler and one school-aged child) in Los Angeles County is $95,112 and $77,072 for a similar family in Sacramento County. By comparison, the federal government says those same families would only need $26,500 to be categorized as not living in poverty.
The study’s other key findings:
• Struggling Households Work: Of the estimated 3.5 million households in California that fall below the Real Cost Measure, 97% have at least one working adult.
• Housing Burden: Nearly 4 in 10 households in California pay more than 30% of their income on housing, which is considered a dangerous threshold by affordable housing advocates.
• Child Care Costs Can Be Even More Expensive Than Housing for Many Families: In Fresno County, the annual cost of child care for a family with two adults, one preschooler and one school-aged child can reach $14,429 versus $19,740 in Orange County.
• Over Half of Young Children Live in Struggling Households: 53% of households in California with children younger than six-years-old fall below the Real Cost Measure.
• Households of All Races Struggle, but Is Highest for Latino and Black Families: Over 1.7 million Latino households (or 51% of them) are estimated to not earn enough to get by, compared to over 1.06 million white households (20%); 481,618 Asian American households (28%); 259,516 Black households (41%); and 13,592 Native American/Alaska Native households (39%).
• Less Education Results in Greater Struggles: Nearly 7 in 10 California households without a high school diploma or equivalent (68%) fall below the Real Cost Measure, compared to those with at least a high school diploma (47%), those with at least some college education (34%), and those with at least a bachelor’s degree (15%).
• Single Mothers: 7 in 10 households led by single mothers in California (70%) fall below the Real Cost Measure.
• Foreign-Born Households Have More Trouble Meeting Basic Needs: Thirty-six percent of households in California that are led by a person born outside the U.S. are below the Real Cost Measure, a figure which rises to 59% when the household is led by someone without U.S. citizenship. Meanwhile, only 26% of households led by a person born in the U.S. earn income below the Real Cost Measure.
The study is based on the U.S. Census Bureau’s Community Survey data from 2014 through 2019.
Story Date: July 28, 2021