The Economic Policy Institute has issued an updated and expanded version of its family budget calculator — the first since 2008.
This should be welcome news to both advocates for the interests of low and moderate-income Americans and analysts working on issues like an alternative to our over-simple official poverty measure.
The calculator allows us to produce current budgets for six family types — one or two parents, with at least one and as many as three children — and for each, basic living costs in 615 communities.
Basic living costs include:
- Housing (rent, plus basic utilities for a modestly-priced apartment big enough for the family).
- Food, based on the U.S. Department of Agriculture’s second cheapest food plan.
- Transportation (costs of owning and operating a car for essential travel).
- Health care (premiums for employer-sponsored health insurance, plus out-of-pocket costs).
- Other necessary expenses, e.g., clothing, personal care items, household supplies.
- Taxes (income and payroll).
Some items are quite consistent across jurisdictions — food, for example, and transportation. Others, as you might imagine, vary widely.
But in every single jurisdiction and for every family type, the costs of what it takes “to get by” are well over the federal poverty line.
Also more than a full-time, year round minimum wage worker can earn — even in jurisdictions that have established minimum wages considerably higher than the federal.
So what can we learn about the District of Columbia? Well, it’s one of the costliest places in the country to live — and for families with one child the costliest of all.
Chalk this up to the highest market-rate child care cost of any jurisdiction — $1,318 a month for a preschooler. (EPI assumes that families with more children will be paying for only after-school care for the rest.)
Taking a closer look at your conventional two-parent, two-child family, we see that sustaining a modest standard of living in D.C. would require $88,615 a year. Only similar families in New York City and several nearby communities need more.
The District’s family budget, as EPI calculates it, is well over three and a half times the federal poverty line for a four-person household.
If both the parents worked full-time, year round at the local minimum wage, they would be shy about $53,000.
This assumes, as we really shouldn’t, that they’re entitled to some paid leave — or never, for any reason, have to take any time of from work.
Also that they and their kids have only minimal health care costs because they’re enrolled in Medicaid.
And — big assumption here — that the family has found a two-bedroom apartment at the U.S. Department of Housing and Urban Development’s fair market rent — $1,412 a month.
Not in my backyard, as they say. Nor necessarily a representative modest rent in the District as a whole, since the FMR that EPI was constrained to use represents a rate calculated for the greater Washington metro area.
What EPI says for communities nationwide is obviously true for the District. Many parents won’t earn enough to meet their families basic needs.
Work supports like the refundable Earned Income Tax Credit and Child Tax Credit, child care and transportation subsidies can help.
So can other public benefits like SNAP (the food stamp program), subsidized housing and Medicaid — or for some slightly better-off families, the soon-to-be-available subsidies for private health insurance plans.
But even with these, it’s got to be awfully tough for a whole lot of families “to get by” in high-cost communities like the District.
And virtually all the work supports and other benefits I’ve mentioned are under some form of threat on Capitol Hill.
I’d like to think that the EPI budget calculator, with its community-specific data, would give pause to policymakers who are busy about cutting programs their less well-off constituents need to live free from economic hardship.
If wishes were horses …