According to current Federal guidelines, the official poverty level for an individual living in the contiguous 48 United States is $11,770. For a typical family of four, it’s $24,250. Those figures are somewhat higher in Alaska and Hawaii, where living expenses tend to be greater – but that is the only geographic adjustment that has been made.
For example, in the state of Oregon, one can rent a one bedroom apartment in the small, rural community of Joseph for around $250 a month – but in the large city of Portland, that same apartment costs over $1,200. The annual take-home pay for a minimum-wage worker employed full time is around $13,300, which works out to just under $1,109 per month. That’s not a bad deal for a single person living in Joseph (assuming s/he has a secure and steady job), but it doesn’t work out so well for that same person in Portland. A Portland city employee has it a little better, with a mandated minimum wage of $15 an hour – but that take-home pay is still just over $1,900 a month. With rent taking almost 2/3rds of that paycheck, there isn’t a lot left over for things like food, transportation, insurance, clothing and “discretionary” expenses – not to mention savings and emergency expenses.
The point here is that Federal “poverty guidelines” are hardly reflective of economic realities for the vast majority of Americans, particularly in large, expensive cities such as Seattle, Portland, San Francisco and New York. It gets even worse for families with children. For example, a family of four bringing in $24,250, living in the nation’s least expensive metropolitan area of Morristown in eastern Tennessee, would need to be earning twice that much in order to cover all their basic living expenses.
These are the findings of a recent study from the Economic Policy Institute (EPI). According to Elise Gould, senior economist at the EPI, federal guidelines fail to consider not only location, but also volatile expenses such as health care, food, transportation, energy and child care (which in most areas, exceeds the cost of housing). For example, while Morristown was at the bottom of the scale with average annual living costs running at a little over $49,110, maintaining a basic standard of living for a year in Washington DC costs nearly $106,500. Significantly, had middle class wages simply kept up with the gains made by the lordly “1%,” the average salary today would be around $156,300.
Small wonder that even those who make what at one time might have been considered a decent income seem to be struggling these days. It should be pointed out that the EPI figures reflect what is necessary for “a secure, but modest life,” according to Gould. It is still far from the middle-class lifestyle enjoyed by millions of Americans during the “Great Expansion” between the end of World War 2 and the rise of Reagan and his neo-conservative successors. According to the study:
These budgets do not include several components of what might be considered a middle-class lifestyle. In particular, they do not include any savings: There are no savings for a rainy day (e.g., job loss or unexpected medical bills), savings for retirement (except through Social Security payments), or further investments in their children (e.g., enrichment activities or college savings).
This research clearly demonstrates what Bernie Sanders and the Progressive community has been saying for years. The Federal government not only must re-think what constitutes “poverty” in the US, it needs to institute serious reforms to the tax code, health care, education and child care. Earlier this week, Sanders tweeted: “The United States is the only developed nation in the world without guaranteed, paid parental leave. We must guarantee these benefits.” Considering that child care can exceed the cost of college tuition, this would be one place to start. Sanders adds: “Families are struggling to put bread on the table, send their kids to college and take care of their basic needs. America needs a political revolution.”
Consider all of this between now and the first primaries.