Cost of Living (Family of Three), Census Data and Poverty
The Self-Sufficiency Standard
(A "Basic Needs" Budget)

This is a comparison of the bare-bones cost of living across selected counties for a family of three, including one adult, a preschooler and a school-age child. That might be a parent or grandparent. It is an austere budget that meets all their basic needs (check out what "miscellaneous" includes, on 10%), but has no leeway for debt service (be it student loans, a car loan or credit card debt), meals out, savings, or any of the discretionary spending that one might consider as "middle class." It assumes an older car, already paid for, with no collision insurance, or, where public transportation is available, a monthly pass for the adult.

The data:

• Columns 1 though 5 list the five major spending categories.;
• Column 6, miscellaneous, is 10% of the sum of the first five columns. This can be used as a proxy for pre-tax expenses.
• Columns 7 through 10 list the taxes paid and credits received.
• Column 11 is the sum of columns 1 through 10, and column 11 annualizes it.
• Column 13 compares the Self-Sufficiency Standard for that location to the Federal Poverty Guideline.
• Column 14 provides the population for the county of MSA (Metropolitan Statistical Area).
• Column 15 provides the Homeownership Rate from the 2000 Census.
• Column 16 shows the median value of owner-occupied housing.
• Column 17 provides the number of households in 2000 (which can be multiplied by Column 15 to yield the number of homeowning households, and further manipulated to provide the number of renting households.
• Column 18 provides the median household income for 1999, which can be compared with Column 12 (recognizing that Column 12 is 2000 to 2005 data).
• Column 19 provides the official poverty rate for 1999, which might reasonably be viewed in conjunction with Column 13.
• Column 20 provides a measure of population density, which generally seems to correlate with incomes and rents.
• Column 21 updates the rent figure in column 1 to 2006; where there are multiple figures shown, it represents a revision.

The counties were selected from the Self Sufficiency Standard Studies. All that were shown in tables in the body of each study were included, and those were supplemented with additional counties from the appendices. Background material and links to the studies themselves are available here.

Some things you might look at:

[You might want to open a second copy of this document in a separate window so you can scroll through the data and consider the questions simultaneously. Copy the URL at the top, then tap Ctrl-N and paste the address into the top of the new window].

• Notice that, in most places, the childcare (Column 2) for a school-age child (after-school and during school vacations) and a preschooler year-round costs more than the rent on a 2BR apartment (Column 1).
• Food costs (Column 3) — at a level that in 2006 would be $1.82 per person per meal, with 100% of meals prepared at home — are more than rent in some rural places, but in the places where most people live are far less than the rent.
• In those places where public transportation is available, lower transportation costs (column 4) help to offset higher rent (column 1).
• Taxes paid (before Earned Income Tax Credit, ChildCare Tax Credit and Child Tax Credits) for a renting family frequently cost nearly as much as rent does. Remember that as renters they are not paying property taxes, so these are taxes they pay directly, over and above what their landlords pay in property taxes.
• At the level of income one needs to meet one's most simply defined needs, a family of four with two children in many places receives no benefit from the Earned Income Tax Credit (Column 8)! Only in a couple of dozen counties listed here would a family of 4 at the SSS level receive any benefit, and those tend to be low-rent (Column 1), low-population (Column 14) and low-density (Column 20) places.
• The total value of the EITC, CCTC and CTC is low compared to the total taxes paid.
• Payroll taxes (7.65% of wages, column 11) are only a small portion of the taxes (Column 7) that one pays on an income at the SSS level.
• The Self-Sufficiency Standard is a reasonable measure of what it costs to live a lifestyle that most of us would define as the bottom of lower middle class (see the description of what is excluded and what falls into "miscellaneous." There is no discretionary spending in these budgets. All one's needs are met, and one is probably in a moderately safe area, but with no financial flexibility and no saving for the future or ability to service student loans or credit card debt. The cost of this lifestyle as a percentage of the Federal Poverty Guideline (Column 13) ranges from a low of 152% — Adams County, Wisconson (61 persons per square mile) and Carroll County, Virginia (29 persons psm) to over 300% in places where millions of people live, for a still-austere lifestyle. With this in mind, what does the Federal Poverty Guideline mean? What does it measure? What should we think when we read that it is 13%, or has gone up, or gone down?
• While homeownership nationwide is now about 69%, and in 1999 was 66.2% (Column 15), in the places where the most people live, homeownership levels are much lower. The popular assumption that most people will become homeowners at some point in their lives just doesn't hold in our cities. People will be paying rent to others for their entire lives. Homeownership has increased in Manhattan as buildings that were once rentals have become condominiums, but the homeownership rate in 2000 was 20%, and the average value over $1,000,000. (How much over $1 million appears to be unknown, probably due to top-coding practices which conceal important detail.)
• The median value of owner-occupied housing in 2000 in these selected counties ranged from $27,500 in Todd County, South Dakota, $35,900 in East Carrol Parish, LA, and $46,500 in Knott County, Kentucky, to $90,700 in Jefferson County, Alabama (Birmingham), to $514,600 in Marin County, California and over $1 million in Manhattan, New York City.
• The Self-Sufficiency Standard for a family of four including two young children is often rather close to the local Median Household Income for 1999. Notice that the SSS's are for varying years from 2000 to 2005, so the comparison is not an exact one.
• The official poverty rate for the US as a whole in 1999 was 12.4%. But as the table shows, the Federal Poverty measure is far lower than the bare-bones cost of living, at least for a family of four. For 2004, here are the income-to-poverty ratios:
  • below 100% of the poverty line: 12.7% —   36,997,000 (20.5% of ages under 5; 16.8% of ages 5 to 17);
  • below 125% of the poverty line: 17.1% —   49,666,000 (25.9% of ages under 5; 21.8% of ages 5 to 17);
  • below 150% of the poverty line: 21.6% —   62,849,000 (31.7% of ages under 5; 26.9% of ages 5 to 17);
  • below 175% of the poverty line: 26.6% —   77,359,000 (37.4% of ages under 5; 32.3% of ages 5 to 17);
  • below 185% of the poverty line: 28.5% —   82,849,000 (39.6% of ages under 5; 34.6% of ages 5 to 17);
  • below 200% of the poverty line: 31.2% —   90,813,000 (42.7% of ages under 5; 37.9% of ages 5 to 17);
  • below 250% of the poverty line: 40.1% — 116,512,000 (51.8% of ages under 5; 47.3% of ages 5 to 17);
  • below 300% of the poverty line: 48.5% — 140,885,000 (60.5% of ages under 5; 56.1% of ages 5 to 17).
    source: tables linked from http://pubdb3.census.gov/macro/032005/pov/new01_000.htm