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What is the true cost of living in California?

New United Way study finds more than 1 in 3 households in California struggle to make ends meet

SACRAMENTO – United Ways of California unveiled the organization’s highly anticipated Real Cost Measure in California 2023 study, June 6, finding that more than one in three California households are struggling to meet their daily needs, https://unitedwaysca.org/realcost/.

The Real Cost Measure, a self-sufficiency standard designed by United Ways of California, finds that 34% of California households – 3.7 million Californians and families – do not earn enough to cover their basic living expenses, with Latino and Black households struggling the most.

This new research provides deep insight into the financial struggles families face that aren’t captured by the outdated federal poverty measurement. United Ways’ methodology finds the rate of struggle in California is 240% higher than the official poverty measure.

Taking a more comprehensive view of families’ basic needs like food, rent, transportation, health care, and child care, the Real Cost Measure takes into account geographical and regional differences in the cost of living throughout California, offering a guidepost for policymakers aiming to solve challenges of poverty and inequity.

By exposing the full range of expenses faced by individuals and families, the study challenges the traditional poverty measure and advocates for a more accurate representation of economic hardship.

“The Real Cost Measure in California 2023 shows that many more California working families struggle to meet living costs than official estimates and identifies significant gaps between what it costs for families and their children to live with dignity and what they actually earn,” said Peter Manzo, president and CEO of United Ways of California. “This Real Cost Measure should be the yardstick by which we set our statewide priorities, and this study is a wake-up call to elected officials, civic leaders, the business sector, and community members that much more needs to be done to help families thrive.”

Overall, The Real Cost in California 2023 finds that Latino and Black households struggle the most in California, and single mothers, and households with young children face ongoing challenges to make ends meet. Some of the study’s primary findings include:

· Latino and Black households struggle the most: More than 1.7 million Latino households (51%), 279,000 Black households (45%), and 518,000 Asian American households (30%), struggle to make ends meet, compared to nearly 1.2 million White households (23%).

· Working households struggle: Of the 3.7 million households who fall below the Real Cost Measure, 97% have at least one working adult.

· Single mothers: 7 in 10 households led by single mothers in California (70%) fall below the Real Cost Measure.

· More than half of households with young children struggle: 54% of households in California with children under the age of 6 fall below the Real Cost Measure, nearly 862,000 households.

· Housing burden: Over 4.3 million households in California pay at least 30% of their income on housing.

· Less educational attainment yields more hardship: Nearly 7 in 10 households led by a person without a high school diploma fall below the Real Cost Measure (68%), compared to those with at least a high school diploma (50%), those with at least some college education (38%), and those with at least a bachelor’s degree (18%).

· Foreign-born households struggle more than native born: 57% of U.S. non-citizens struggle to meet basic needs, compared to 37% of naturalized householders, and 29% of households led by a U.S. citizen.

The Real Cost Measure in California 2023 also finds that the cost of child care is often the second largest expense for most households after the cost of housing. In Marin County, for example, a family with two adults, one preschooler and one school-aged child, would have to spend at least $19,668 on child care annually to reach the Real Cost Measure, compared to $12,648 in Fresno County.

Demographic findings from The Real Cost Measure in California 2023 are calculated from the U.S. Census Bureau’s 2021 American Community Survey, the latest available as of this release, and historical data is available from 2014 through 2019. The study’s website provides data findings for each of California’s 58 counties, down to the neighborhood level, interactive maps, and an interactive calculator that shows how much a household in any county needs to earn to make ends meet. To learn more, visit https://www.unitedwaysca.org/realcost.

Submitted by United Ways of California.

 

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