42% of NYC residents don’t have enough income to cover the basic necessities of a Self-Sufficiency budget, according to a new report.

December 2, 2014. According to the new 2014 edition of the Self-Sufficiency Standard for NYC, released today by the Women’s Center for Education and Career Advancement at a forum at the New School, the cost of a basic family budget in New York City has increased by 45% since 2000 while the median earnings of adults increased by only 17% over the past 14 years. The report, Overlooked and Undercounted: the Struggle to Make Ends Meet in New York City, is an update and extension of earlier basic budget reports prepared in 2000, 2005 and 2010. A report of the key findings and recommendations is also available.

The Self-Sufficiency Standard reflects the cost of basic necessities—housing, food, clothing, child care, health care, transportation, and taxes—without any “frills” like eating out or vacations. The standard varies by neighborhood of residence within NYC because housing is such a large part of a family’s budget, and it differs depending on family composition and the age of children. The standard represents the amount of income a family needs to pay for necessities without reliance on public or private subsidies. It is much higher than the federal poverty line but is far from what could be considered a “middle class” standard of living, for example, it does not include any allowance for college or retirement savings, or saving to buy a home. Saving for college is critical to upward mobility and buying a home is the main way most families build assets.

The full report includes a datafile of tables providing borough specific information for 152 family types. Budget standards are compiled for 7 geographic areas within New York City: Bronx, Queens, Staten Island, North and South Manhattan (96th Street is the dividing line), and Northwest Brooklyn (neighborhoods directly north and west of Prospect Park) and the rest of Brooklyn. South Manhattan and Northwest Brooklyn are separated out because housing costs are so much higher in those areas than in the rest of the city.

To take one example for a 4-person family with two adults, a preschooler and a school-age child, the Self-Sufficiency Standard budget ranges from $70,319 in the Bronx, to $98,836 in South Manhattan. The budgets for Brooklyn other than Northwest Brooklyn, Staten Island, North Manhattan, and Queens are within a fairly narrow range from $73,000-$76,000. Northwest Brooklyn’s budget for this family type would be a little over $79,000.

Among the report’s key findings:

  • 940,000 NYC households, representing 2.7 million people, lack enough income to cover basic necessities such as food, shelter, health care, and child care.
  • With over half (56%) of all households below the Standard, the Bronx has the highest overall income inadequacy rate in the city. Not far behind is Brooklyn (excluding Northwest) (49%), followed by North Manhattan (45%), and Queens (43%).
  • 83% of the households below the Standard in NYC have one or more workers.
  • While 80% of the people without a high school diploma are living below the Standard, education is not a guarantee—21% of all people with a 4-year college degree still have inadequate wages.
  • 25% of NYC households with incomes below the Standard are married-couple households, 23% are single-women households with children, and 5% are single-men households with children; 47% are households without children.
  • Households with children are at a greater risk of not meeting their basic needs. 59% of families with children have incomes below the adequacy level, and if there is a child under six, 65% have incomes below the Standard.
  • 79% of single mothers lack adequate income, and 68% of single fathers have inadequate incomes.
  • All race-ethnic groups are significantly affected: 36% of households with inadequate incomes are Latino, 25% are Black, 22% are White, 16% are Asian/Pacific Islander, and 1% are Other Race (including Native Americans.)
  • U.S. citizens head 71% of households below Self-Sufficiency and non-citizens head 29% of households with sufficiency income.
  • Reflecting race and/or gender inequities, women and/or people of color must have several more years of education than white males in order to achieve the same level of income adequacy.
  • The 5 occupations with the greatest number of workers whose incomes put them below the Self-Sufficiency Standard are, in numerical order, home health aides (60,000), janitors and building cleaners (29,000), childcare workers (27,000), cashiers (23,000), and maids and house cleaners (22,000).

An advisory committee identified three primary recommendations:

1)     Wages should be increased to align and keep pace with the costs of living by raising the minimum wage and broadening the coverage of the City’s living wage requirements to include the large social service workforce employed under City service contracts (higher wages should be coupled with better career advancement supports);

2)     Access to better employment requires investment by business, government and philanthropy in career ladders, pathways and apprenticeships with consistent, systematic, and large-scale opportunities for individual growth and advancement across sectors and industries;

3)     Policy solutions also need to address the cost of living side by making quality, affordable housing, food, and child care accessible to all New Yorkers.

The report notes that while a minimum wage increase to $13.13 an hour (which could be achieved with a $10.10 NYS minimum wage plus local authority to allow NYC to set a minimum wage 30% higher) or a $15 an hour wage floor for social service works on City contracts represent considerable progress, these critical wage floors should not be construed as ceilings.  These wage levels would provide a worker with annual earnings around $25,000-$30,000. Neither wage constitutes a self-sufficiency wage for a substantial portion of the 780,000 working households below the Self-Sufficiency Standard.  But they would put many thousands on a more certain path to attain self-sufficiency.

A similar report for Washington State figured prominently in the Seattle campaign that led to the enactment of a $15 an hour minimum wage.

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The report was authored by Dr. Diana M. Pearce and produced by the Center for Women’s Welfare at the University of Washington.  Funding to support the report was provided by the United Way of New York City, The New York Community Trust, and City Harvest.

FPI’s Deputy Director and Chief Economist James Parrott served on the project’s Steering Committee.