Among policymakers, the federal poverty line tends to be the go-to number in discussions of wage and quality of life. However, researchers at public policy think tanks say since poverty isn’t a desirable outcome, there are better ways to measure the effects of public programs.
One of them, the Economic Policy Institute’s (EPI) Family Budget Calculator, factors in family size, state and area, to determine the income needed to provide an “adequate but modest” life.
The calculator, recently updated for 2013, estimates the monthly cost of housing, food, child care, health care, other necessities and taxes, providing data for six family compositions in 615 communities nationwide.
In Seattle, the calculator estimates that one adult and one child need $52,611 annually to get by. For a family of two parents and two children, the cost jumps to $70,025. For both family groups, monthly housing comes to $1,104.
John Burbank of the Economic Opportunity Institute (EOI), a public policy think tank based in Seattle, said that “adequate but modest” means exactly that — modest.
The cost for food, for example, comes from the U.S. Department of Agriculture’s low-cost food plan, which assumes almost all food is bought at the grocery store and prepared at home.
Housing costs come from the U.S.Department of Housing and Urban Development’s fair market rents for the 40th percentile, which means
60 percent of standard renters pay more.
Nationwide, the new numbers for modest living paint a vastly different picture than the federal poverty line. Even in Marshall County, Miss., the least expensive place to live for a two-parent, two-child family, the calculator’s estimate of $48,144 soars above the 2012 poverty threshold of $23,283.
“We’re more interested in creating a measure which people can look at in terms of self-sufficiency, economic security and a pathway into the middle class. Using the poverty level is really the wrong measurement,” Burbank said.
The methodology for the federal poverty line was developed in the early ’60s and the Supplemental Poverty Measure — created to address some of the problems with the federal poverty line — doesn’t account for geographical variation in things such as child care.
In the EPI’s study, monthly child care costs ranged from $501 in Marshall County, Miss. to $2,006 in New York City.
Regardless of where one lives, the numbers have the same implication. For someone living on minimum wage, it might be impossible to make ends meet.
One full-time worker earning the federal minimum wage of $7.25 will make $15,080, “far below what is necessary for a one-parent, one-child family to live in even the least expensive family budget area,” the EPI report reads.
For Burbank these numbers call for increasing the minimum wage.
Burbank said that even in Washington, which has the highest minimum wages of any state at $9.19, “We are way behind.”