San Francisco Chronicle - (Sunday)
Hardships widespread in state
Quarter of Bay Area families can’t afford basics, study finds
Even before the pandemic stalled the economy, 1 in 4 Bay Area families was struggling to afford the basic necessities, says a new study from United Ways of California.
The finding translates to approximately 608,000 households in the Bay Area and 3.5 million families across the state not earning enough income to cover the costs of housing, food, medical care and childcare, among other daily essentials, according to the network of nonprofit affiliates’ “Real Cost Measure” analysis, which pushed back against the federal government’s rigid method of determining poverty rates.
The U.S. Census Bureau’s official poverty measure, or OPM, calculates families’ pretax income against the cost of affording basic food items, according to the Institute for Research on
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Poverty at the University of WisconsinMadison. The Census Bureau also has a “supplemental poverty measure” that considers cultural and socioeconomic factors, but OPM remains the official standard. Under the OPM standard, families of four from Sacramento to Los Angeles counties would only need to earn around $25,000 annually to avoid being categorized as living in poverty.
United Ways’ study contends that other common expenses should be considered, as should how those expenses differ by geography. Under its methodology, the actual cost of living for a family of four (two adults, one preschooler and one schoolaged child) is $106,866 a year in the ninecounty Bay Area, $95,112 a year in Los Angeles County and $77,072 a year in Sacramento County.
“We need a poverty measure that points to a decent standard of living, not one that just says how low some incomes are,” Peter Manzo, the president and chief executive of United Ways of California, said at a virtual news conference Wednesday. “Living in California has different costs than living in different parts of the country.”
That’s increasingly clear in the Bay Area, where a separate economic barometer estimated that it takes as many as four minimumwage jobs to comfortably afford a twobedroom apartment in the San Francisco metropolitan area.
A quarter of Bay Area households failed to meet United Ways’ sixfigure economic baseline, including 62% of households run by single mothers, 47% of all Latino households and 40% of all Black households in the region.
United Ways’ study found these glaring disparities statewide.
The study estimated that more than 1.7 million Latino households in California, or 51% of them, didn’t earn enough, compared to over 1.06 million white households (20%), 481,618 Asian American households (28%), 259,516 Black households (41%) and 13,592 Native American/Alaska Native households (39%). The study examined census data from 2014 to 2019 and does not reflect the economic impacts of the pandemic. The global health crisis disproportionately impacted communities of color, with lowerincome Black and Latino workers more likely to remain unemployed, according to the Public Policy Institute of California.
In California, the employment rate for workers who make more than $60,000 a year was 7.4% better in May than it was in January 2020, according to an economy tracker created by Harvard and Brown universities. But for workers who earn less than $27,000 annually, the rate was 21% worse.
Federal poverty guidelines are considered outmoded even by some other federal standards. For instance, the U.S. Department of Housing and Urban Development defines “lowincome” in
San Francisco as an individual making $82,200 annually and a family making $117,400 annually for the purposes of qualifying for certain housing programs. But federal poverty guidelines for San Francisco says it is $25,100 for a family of four.
California has attempted to put some economic safeguards in place during the pandemic, with mixed results. A second stimulus round is underway for people who earn less than $75,000 a year, and at least $5 billion has been allocated for rental assistance programs to help families struggling to pay their rent. There are not nearly enough applicants for the programs, said state Sen. Nancy Skinner, who organized Wednesday’s news conference to present United Ways’ findings.
But California has also been criticized for not getting funds out to those who need it the most, fast enough.
“We know that income inequality is real,” the Berkeley Democrat said. “We’ve invested $5 billion to ensure people don’t fall into homelessness. It is not enough, but it is the largest investment we’ve ever made.”