Living on the edge
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Enlarge M. Spencer Green/AP
A new report says American families need to earn about $68,000 a year to achieve basic economic security — more than three times the national poverty line.
As President Obama and members of Congress debate national budgets, Shawn McMahon has been calculating individual and family budgets.
He’s the research director for Wider Opportunities for Women, a group that works with low-income women and families. The nonprofit group just released its Basic Economic Security Tables index, which measures the minimum income workers need to achieve basic economic security.
“We’re not talking about surviving,” McMahon tells Morning Edition host Renee Montagne. “We are talking about economic security that allows people to live day to day without fear of a lot of the economic insecurity that we’ve been seeing in recent years.”
According to the report, to achieve economic security the average minimum income needed for a family with two workers and two young children is $67,920 — that’s with both parents working, and earning just over $16 an hour.
The Components Of Basic Economic Security
| Monthly Expenses | 2 Workers, 1 Preschooler, 1 Schoolchild |
|---|---|
| Housing | $821 |
| Utilities | $178 |
| Food | $707 |
| Transportation | $1,019 |
| Child Care | $1,080 |
| Personal and Household Items | $460 |
| Health Care | $443 |
| Emergency Savings | $170 |
| Retirement Savings | $56 |
| Taxes | $1,060 |
| Tax Credits | -$334 |
| Monthly Total (per worker) | $2,830 |
| Annual Total | $67,920 |
| Median Family Income | $61,265* |
| The Federal Poverty Line For A Family Of Four |
$21,756* |
*2009
Source: Wider Opportunities for Women; U.S. Census Bureau
And a single worker with no children needs to make about $30,000 a year, which means working full-time and earning twice the minimum wage.
“We’re more interested in people moving up the ladder so that they are at a place where they can meet their basic expenses and they can save a little bit to prevent them from ever falling back into poverty,” McMahon says.
The index includes a range of monthly expenses including housing, utilities, food, transportation, child care, basic personal and household items, health care, taxes, and emergency savings and retirement savings.
It does not include middle-class amenities such as vacations, dinners at restaurants, flat-screen TVs, cable subscriptions, movie tickets or other entertainment.
The biggest expense is generally housing and utilities.
“However, once a family has two or more children, then child care is often a bigger expense,” McMahon says.
The income requirements in the index are about three times more than the federal poverty line, which is $21,756 for a family of four and $10,956 for an individual.
“The federal poverty level was actually developed about 50 years ago on a very basic assumption on what families needed to buy food,” McMahon says. “So, the federal poverty level bears little resemblance to reality. It didn’t many years ago, and it doesn’t today.”
Thanks to NPR.
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God it is a struggle. Us Americans are in for a sea change when it comes to standard of living.
Yes, and 47 million Americans live right at or below the poverty level and an additional 53 million live at or below the median household income level for a family of four of 46,000 (but above the poverty level)…
Since 1980 our GDP has increased 67% but our median household income for a family of four has only increased 15%.
I believe a family of four making $70,000 a year falls in the top 20% of all American wage earners….
So any solutions?
How about starting with eliminating all tax deductions for corporations, including the one for overseas earnings and then lowering the corporate tax rate. If they want to do business as an American company then they pay taxes.
Then add a 1% tax on all financial transactions and use this to fund an investment company that invests in companies where 100% of there employees reside in the USA with sales of less than 5 mil a year. They also need to agree to provide healthcare and pay their employees 200% of minimum wage.
Excellent plan here. Unfortunately, with a Republican held house it will never happen. Not one bit of it.
This is why people try every trick in the book to avoid income tax – and I hope they succeed!!! Don’t believe in it anymore…
Over here? Same thing.
Now let’s see…if I pay my tax it’ll be spent on illegal wars…if I don’t I can take the family away for a holiday…
I can’t seem to find a flaw in not paying myself…;-)
Sweden is already outsourcing to us with IKEA cashing in on cheap labor. Pretty soon we will get all the textile jobs we lost to Asia as they advance and we regress into third world poverty.
Don’t how a family can survive on poverty wages, don’t know how I survive on what I earn. Survival is the word.