Social inequality reaches new heights in California

The study takes direct aim at outdated and methodologically inferior measures of economic well-being, primarily the official Federal Poverty Level (FPL). The results of the study expose the FPL for what it is: a means of obscuring the shaky economic precipice on which most working families find themselves teetering.

To achieve nothing more than a modest standard of living, the report estimates that a family with two working parents in California needs an annual income of $71,377.

This would require that both parents work full-time for an hourly wage of $17.16. Families living in the least expensive regions of the state would need an annual income of at least $56,261 to meet their basic needs. To put this data in perspective, it must be noted that the federal poverty line was set at $18,850 for a family of four in 2004.

Given the CPB findings, there can be no argument that poverty statistics in California and nationwide are profoundly distorted.

The hourly wage needed to support the basic family budget is two to three times the state’s minimum wage ($6.75 per hour). In fact, the hourly wage required by single parents, employed parents in a family where both parents work, and the employed parent in a two-parent family where only one parent works exceeds the 2004 median hourly wage ($15.06) for California workers. So even those workers earning more than twice the minimum wage are not making enough to meet the elementary costs incurred in raising a family.

Moreover, the hourly wage standard estimated in this report assumes full-time employment for 40 hours per week, 52 weeks per year, and does not allow for any unpaid days off during a year. Part-time or part-year workers—among the fastest growing sections of the workforce—would require significantly higher hourly wages to earn the same annual income.

The study demonstrates that the cost of living would actually be less for a family if one parent stays home and takes care of the kids. It was found that a two-parent family with only one employed parent needs an annual income of $51,177, which is equivalent to an hourly wage of $24.60 for one parent. Regional variations based on the same familial set-up range from $40,545 to $55,740 per year or $19.49 to $26.80 per hour.

A single-parent family needs an annual income of $53,987 to meet its needs, equivalent to an hourly wage of $25.96. Regional estimates of the basic budget necessary for a single parent household ranged from $43,396 to $62,969 per year or $20.86 to $30.27 per hour. The report shows that even a single adult living in California needs an annual income of $25,867 to get by, equivalent to an hourly wage of $12.44, with regional budget estimates ranging from $20,304 to as much as $27,901 per year, or $9.76 to $13.41 per hour.

The report calculates average costs of housing and utilities, child care, transportation, food, health coverage, payroll and income taxes, and miscellaneous expenses for the four hypothetical family arrangements mentioned above: a single working parent with two children; two working parents with two children; a two-parent family with two children in which one parent works; and a single working adult.

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http://www.wsws.org/articles/2005/oct2005/cali-o14.shtml