Is $68,000 the bare-bones family income?
Study says it takes quite a bit of money to reach economic stability, which includes not just 'decent' housing and a 'low-cost' food plan, but also saving for retirement and emergencies.
This post comes from Lynn Mucken at MSN Money.
The good news just keeps rolling in: 216,000 jobs added nationwide in March, and unemployment down to 8.8% from 9.8% in November, the biggest four-month decline since 1964.
And on the personal front, you're working and your spouse is working -- both full time. Life is good.
Or is it? According to a study commissioned by the nonprofit Wider Opportunities for Women, a family with two full-time wage earners and two children needs nearly $68,000 a year to afford fundamentals like housing, utilities, food, health care, transportation, saving for retirement and child care. The average such family in America makes less than that. Post continues after video.
To develop its income assessment, the report's authors examined government and other data to determine the cost of "a decent standard of shelter" in metropolitan areas across the country.
They chose a "low-cost" food plan from the nutritional guidelines of the Department of Agriculture, and calculated the cost of driving a small sedan. For health care, they calculated expenses for workers both with and without employer-based benefits.
According to the report, a single worker living alone needs an income of $30,012 a year -- or just above $14 an hour -- to cover basic expenses and save for retirement and emergencies. That is close to three times the 2010 national poverty level of $10,830 for a single person, and nearly twice the federal minimum wage of $7.25 an hour.
A single worker with two young children needs an annual income of $57,756, or just over $27 an hour, to attain economic stability, and a family with two working parents and two young children needs to earn $67,920 a year, or about $16 an hour per worker.
According to the Census Bureau, the median -- half above and half below -- two-earner household made $83,405 in 2009, while the average such household brought in $67,348. In other words, if the WOW formula is correct, even households of average income are struggling to afford the basics.
And if you're poor, forget it. With the national poverty level of $22,050 for a family of four, 14.3% of Americans were living below the poverty line in 2009.
"It's an index that asks how can a family have a little grasp at the middle class," said Michael Sherraden, director of the Center for Social Development at Washington University in St. Louis.
"If we're interested in families being able to be stable and not have their lives disrupted and have a little protection and backup and be able to educate their children, then this is the way we have to think," said Sherraden, who consulted on the WOW project and helped develop projections for how much income families need to devote to savings.
The New York Times interviewed a Queens couple with three small sons. Tara, a medical biller who declined to give her last name, said she earns $15 an hour, while her husband, who works in building maintenance, makes $11.50 an hour.
"We tried to cut back on a lot of things," she said. But the couple has been unable to make ends meet on their wages, and visit a food bank every Saturday. With no money for savings, "I'm hoping that I will hit the lotto soon," Tara said.
- "America is no longer the land of the free and home of the brave. We are now the land of the serf and home of the CEO. The middle class will soon be gone and then we will truly be a Third World country by all standards," commented "ProgressiveOregonian."
- "$68,000 for two-income household with kids? That's doable. Anyone can stumble on a job making $34k a year in this country," said "Bravofett."
- "Sounds like it's well past time to finish school, get a little college, keep your 'thing' in your pants/legs closed and get on with it until you can actually afford to buy something. Wants and needs. Just because you want a big-screen TV does not mean that you need it. What you need is good nutritional food, a decent place to live that's economically affordable to heat/cool, economical transportation and clothes on your back. Everything else is a want," wrote "Formontoya."
More from MSN Money:
SERIOUSLY? "No money for savings" yet she plays the lotto???
Some poor people are poor because of unfortunate circumstances. Others are poor because they are idiots. That is all.
I guess I am just lucky. I'm a 27 years old single father and because of my pride, I refuse to accept or apply for any kind of federal aid such as medicaid for my son, food stamps, and or low-income housing. By all governmental standards, my son and I are poor, low-income, etc.; however, I refuse to live off of other people (taxpayers) when I know that I am able to get out and work. In fact, all able body men and women should work. In addition, I don't even receive child support for my son. Throughout the last 8 years, I have been able to go to college and obtain B.S. in Mathematical Sciences and a M.S. in Biomedical Statistics and soon I will be graduating with a PhD in BioStatistics.
And I have done all of this while being a full-time single father with no help, no federal assistance, no child support, full-time job, and full-time student. It has been extremely tough and difficult but I have manage to get it done with very little to no complaining.
The point that I am making here is even though life maybe tough at times, we most as individuals want to improve ourselves and do better than our current status. Women and men need to stop making excuses about why they can make a living. As an aside, many college friends of mines that are women often call me stupid for refusing medicaid for my son, food stamps, and or low-income housing, but just as I have told them many times, I do not believe that I need the US taxpayers assistance with supporting my family.
The first good job I had was in 1974. I was working construction for $2.75 an hour. I was lucky
enough to land a job with a pharmaceutical company with starting pay of $4.25 per hour. I thought I was rich. I stayed there for 32 years and retired. I can not imagine working a minimum wage job and managing to live. I am certainly glad that I am now in my sixties, and I do not envy anyone that is trying to make it today.
I have lived and mostly raised a family at and below the federal poverty level.
I now live well and substantially above it...and above 68k.
I hope to god I never have to try and live at 'only' that level again.
I could, but...
What is up with these articles on MSN!? If you're making 68k and not making ends meet, there's something wrong. Send your kids to in-state public universities, don't finance your car purchases, pack your lunches when you go to work, and for heaven's sake don't buy lottery tickets! Enough with the entitlement culture already!! ...Stupid articles...
Interesting that just a few weeks ago, MSN posted another article about a study by the Financial Times ("Down and Out on $250,000 a year?") which purported to show that a family of four making $250,000/year couldn't even make ends meet in 7 out of the 8 cities investigated. Now this study "shows" that it takes $68,000/year for a family of four to get by. Quite a difference. Maybe what these studies show more than anything is that these studies are essentially worthless.
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
ABOUT SMART SPENDING
LATEST BLOG POSTS
The Consumer Financial Protection Bureau's complaint database highlights the worst problems people have with collectors.
VIDEO ON MSN MONEY
BLOGS WE LIKE
MUST-SEE ON MSN
- Video: Easy DIY smoked meats at home
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'