More than one-third of California families don’t have enough money to meet their basic needs, according to a newly released study from the United Ways of California.
Black and Latino families, immigrant-led households, parents with lower educational attainment and families led by single mothers all struggle disproportionately.
The 2023 version of the study found nearly the same number of Californians struggled to make ends meet as the last four iterations of the report, the first of which was released in 2015. Housing and child care costs were often the two largest expenses that families had to cover.
About 3.7 million California households, or 34%, fall below the real cost measure, the 2023 report found. The vast majority of those households — 97% — have at least one adult working full-time.
“That’s inexcusable,” said Henry Gascon, Director of Program and Policy Development for the United Ways of California, during a media call on Tuesday to discuss the findings. “They’re working hard every day, sacrificing for their family.”
Black and Latino households struggle more than other racial and ethnic groups, with more than 51% of Latino families and 45% of Black families falling below the real cost measure. About 30% of Asian American families and only 23% of white households earn less than the United Way’s real cost metric.
Higher levels of education correlate with greater financial security. Close to 70% of households in California led by a person without a high school diploma earn less than the real cost measure. Only 18% of families led by someone with a Bachelor’s degree fail to meet the real cost threshold.
Families led by immigrants are more likely to struggle financially as well, according to the United Way study. About 57% of households led by non-citizens fell below the real cost measure, compared to 37% of naturalized households and 29% of those led by a United States citizen.
Across the state, single mothers still have a harder time making ends meet than households led by two parents. Seven in 10 families led by single mothers fell below the real cost measure.
In Sacramento County, 30% of households fell below the real cost measure — just slightly below the statewide average of 34%.
A family of four with two adults, one infant and one school-aged child would need to earn earn an estimated $87,096 per year to achieve economic security, the researchers estimate. Even with Sacramento’s minimum wage of $15.50, the family would need to work close to three full-time, minimum-wage jobs to earn that much.
Federal poverty line vs ‘real cost measure’
The analysis relies on what the organization calls a “real cost measure,” rather than the federal poverty line, as a baseline for determining a family’s basic needs.
The Census Bureau’s poverty statistic, developed in the 1960s and adjusted for inflation each year, primarily uses food costs to calculate a baseline standard of living. In contrast, the study’s metric includes other basic life expenses in its calculation, such as housing, health care, child care and transportation. The resulting picture more accurately represents geographic and regional differences in cost of living, the United Way argues.
“This Real Cost Measure should be the yardstick by which we set our statewide priorities,” said Peter Manzo, the president and CEO of United Ways of California, in a statement Tuesday. “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.”