How much does it cost to raise a family in Santa Clara County?

The Insight Center just released the new Family Economic Self-Sufficiency Standard for 2008, which lays out how much it costs to maintain a basic standard of living for workers in every county in California.

Detailed tables with the cost of living in Santa Clara County can be found here (pdf). It's expensive -- okay, no surprise there -- but the Self-Sufficiency Standard shows us just how big that gap is between the cost of basic needs and what jobs actually pay.

A single parent with two kids could be working three full-time minimum-wage jobs and still not have enough to cover housing, food, health care, child care, transportation, and other necessities. No wonder our County's safety net services are strained beyond capacity: as taxpayers, we are subsidizing the social cost of low-wage work.

The list below shows the "self-sufficiency wage" for several different household types. This is the minimum wage needed to get by in Santa Clara County if you work full-time year-round, don't get any outside assistance, and have a minimally adequate standard of living (i.e., you live in an apartment with at least one bedroom for every two people, have enough to eat, and can get medical care when you need it):

• Single adult: $13.37/hr



• Single adult with one infant: $23.55/hr



• Two adults with one preschooler and one teenager (both parents working): $14.70/hr

And compare these to the median wages for some of the most common occupations in Silicon Valley:

• Retail salespersons (25,990 employees, largest single occupation in the region): $10.98/hr



• Office clerks (18.860 employees): $15.85/hr



• Cashiers (17,550 employees): $9.89/hr



• Janitors and cleaners (14,340 employees): $10.78/hr

Keep in mind that self-sufficiency only measures whether a family can support themselves right now; it doesn't allow for costs of college education, retirement savings, unemployment, or other situations for which you might need to put some money aside. Also no meals out, entertainment, or vacations. But even at that minimum standard, too many jobs simply don't pay enough for a working family to make ends meet.

Here's a breakdown of the Self-Sufficiency Standard by budget item for a two-parent family with a preschooler and a teenager:

One more key point: the Self-Sufficiency Standard assumes that all working families are covered by job-based health insurance, which is increasingly not the case. Without access to job-based coverage, health care costs in the pie chart above shoot up from $348/month to an average $943/month, adding $7,140 to a family's annual expenses.

And of course this problem isn't confined to Silicon Valley. While the Valley does have some of the highest costs in the country, workers nationwide are feeling the sting of stagnant or declining real wages. We urgently need a new national direction towards economic policies that support families and make work pay. Check out EPI's Agenda for Shared Prosperity for some good ideas on how to make this happen.

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The Middle-Class Squeeze

A recently released study of inequality shows that nearly all the benefits of California's growth since the late 1990s have gone to just one group: the wealthy.

The "Pulling Apart" study from the Economic Policy Institute analyzed income gains state-by-state for low, middle, and upper-income Americans. Between the late 1990s and the mid-2000s, in California:

• The poorest fifth of families (with average income of $18,312) saw no significant income growth.


• The middle fifth of families (with average income of $50,981) grew by just $1,889, or roughly $315 per year.


• Average income for the highest-income fifth of families grew by $16,772. Most of this growth was at the very top of the scale; for the top 5% (with average income of $243,386), average income grew by $41,988.

This tremendously uneven distribution of growth led to stagnation for the middle class and the poor, and accelerated the growing gap between the very high-income and everyone else.

The gap between California's middle class families and the state's wealthiest residents is now the 3rd largest of any state in the country. (We can congratulate ourselves on providing a fairer shake for the middle class than Oklahoma or Mississippi, which were ranked #1 and #2.)(Continued...)

Because it does not include capital gains, this analysis actually underestimates the gap between the superrich and everyone else.

How do middle class Americans view this decade's economic shifts? In a recent poll of the U.S. middle class, 54% of respondents said that in the past five years, they had made no financial progress or had fallen behind. "Middle class" for this poll was self-defined by the respondents, 53% of whom identified as middle class (another 19% identified as lower-middle and 19% as upper-middle).

The Pew Research Center has been asking this survey question -- "Are you better off now than you were five years ago?" -- since 1964. This year, more middle class Americans said they were not better off than at any point in the past fifty years. An ever higher proportion, 79%, said that it's become more difficult for middle-class families to maintain their standard of living.

[ Continue reading The Middle-Class Squeeze ]