September 28, 2005


California singles must earn $12.50/hour to just pay "bare bones" expenses

A story published today by the Bay City News reports that the average cost of living for singles in California -- just to pay "bare bones expenses" is nearly $26,000 per year. 

That means the average single person would have to make $12.50 per hour at a 40 hour per week job just to survive.  That type of a paycheck would not allow for cable television, or buying a home, or a retirement fund, and definitely would not be sufficient to provide for a vacation.

The Bay Area is the most expensive place to live in California for families and single people like, a new study shows.
 In "Making Ends Meet: How Much Does It Cost to Raise a Family in California?" the California Budget Project estimated two working parents raising two children in the nine-county Bay Area would need to make $79,946 annually to stay afloat.
 In comparison, the statewide average annual income for a similar household was placed at $71,377, according to CBP Executive Director Jean Ross.
 Ross said the CBP used "bare-bones expenditures" including housing, utilities, child care, transportation, food, health coverage, taxes and other miscellaneous expenses to calculate the incomes.
 However, according to Ross, other expenses like saving for retirement and a child's college education, cable television, vacations, and purchasing a house rather than renting were not factored into the mix.
 "This study strives to paint an accurate picture of the basic cost of living in California and the economic challenges facing many working families," Ross said. "It shows that making ends meet is virtually out of reach for millions of families in the state."
 Ross said the incomes the CBP calculated were not meant to be a reflection of the rock-bottom cost of living in California, but rather the middle incomes that are above the poverty line but would still benefit from public aid.
 A Bay Area family of two children with one working parent needs to make $55,740 annually, while statewide the income for a family with one working parent is $51,177, the CBP reported.
 Single parents need to earn an annual income of $62,969 in the Bay Area, and the state average for a single parent is $53,987, according to the CBP.
 Finally, a single adult needs to earn $27,901 if they are living in the Bay Area, but the statewide average came out to $25,867, the CBP reported.
 Ross said she hopes that the report will spark conversation and reform in both private and public sectors.
 "We hope that this report can inform public debate around eligibility standards for our public programs," Ross said.
 Two of the largest factors affecting this year's report are the housing market and gas prices, according to Ross.
 Earlier in September, DataQuick Information Systems reported that the cost of housing in California showed no signs of leveling off, as all nine counties in the Bay Area showed increases in prices from the year before.
 "The California cost of housing certainly is at the high end if you take out Hawaii and Alaska and metropolitan New York," Ross said. "It certainly is overall one of the most expensive places to live as a state."
 With gas prices clocking in at $3.05 per gallon on Sept. 9, according to AAA reports, people who have to commute to work are going to be stretched a little bit more at the gas pump and that directly correlates to their annual income, Ross said.
 When looking at the 2005 state minimum wage of $6.75 per hour, a full-time worker would garner an annual income of $14,040, well below the 2004 poverty level for a family of four, which is $19,157, the CBP reported.
 "Families clearly need far more than the current minimum wage to achieve standard of living," Ross said. "And we need to take a look at new measures of what it takes to support a family."
 A bill that would increase the minimum wage in California by $1 over the next two years is currently sitting on Gov. Arnold Schwarzenegger's desk, but, according to governor's spokesman Vince Sollitto, Schwarzenegger will veto it.
 Sollitto said the governor is going to pass on the bill because it contains an automatic escalator, which would raise the minimum wage without the discretion of the government.
 "The governor wanted to sign a bill that would raise minimum wage; he believed the economy could sustain it this year," Sollitto said. "But he didn't think the bill should include the automatic escalator."