UW News

October 11, 2017

In Seattle, cost of meeting basic needs up $30,000 in a decade

UW News

A Seattle family of four must bring in $75,000 annually to pay for basic housing, food, transportation and health and child care – an increase of 62 percent since 2006, based on a new report from the University of Washington.

The city’s escalating cost of living may not be a surprise. But across the state, the amount of money required to make ends meet for two adults, a preschooler and a school-age child has risen as well, according to the Self-Sufficiency Standard for Washington State 2017. When compared to 2001, the first year the Self-Sufficiency Standard was calculated, costs for that same family of four have increased an average of 59 percent statewide.

The county-by-county report identifies the amount of income needed to support families of various sizes without additional help from the government, community or other personal resources.

Family size and geography are the primary determinants of what is considered a self-sufficient income. In Asotin County, where the self-sufficiency bar is lowest, the study finds that a family of four needs an annual income of $49,000; housing costs roughly $725 a month, less than half what that family might pay for lower-end housing in King County, the most expensive in the state.

Animation of a line graph showing how the gap between counties' self sufficiency wage has grown from 2001 to 2017

University of Washington

Even with differences in household size and location, the same trend emerges: that the cost of meeting basic needs continues to rise faster than wages. According to the report, families of any size, in even the least-expensive counties, cannot get by on the state’s $11 hourly minimum wage. Only single adults, in some counties, can survive on $11 an hour or less.

“It’s discouraging. We’re providing jobs, but we’re not providing income to people,” said Diana Pearce, a senior lecturer in the UW School of Social Work and director of the Center for Women’s Welfare, where she has produced the Self-Sufficiency Standard since 2001.

“People can’t budget their way out of this,” she said. “This isn’t about people misusing their money. This is about wages falling behind costs.”

Between 2000 and 2014, the average wage in Washington grew 12.5 percent, according to the state Office of Financial Management. During approximately the same timeframe, a family of four needed an average of 46 percent more to get by, the 2014 Self-Sufficiency Standard reported. Today, the state’s seasonally adjusted unemployment rate (4.5 percent) hovers around the national average, while Seattle’s is below, at 3.4 percent.

The latest report, produced for and funded by the Workforce Development Council of Seattle-King County, outlines the methodologies for calculating basic needs; “self-sufficient” in this report assumes a bare-bones standard of living, with no spending on entertainment, travel or even takeout. Food costs, for example, are based on the U.S. Department of Agriculture’s Low-Cost Food Plan and assumes all food is prepared at home. If more than 7 percent of workers in a county use public transit – as is the case in Seattle – then transportation costs are calculated based on transit fares; otherwise, a number of sources contribute to the math of driving a car (and make for a higher share of the cost of living). And in all cases, of course, the costs of supporting children add significantly to a family’s budget.

Dot Fallihee, interim chief executive officer of the Workforce Development Council of Seattle-King County, said the report offers valuable information on what families need to make ends meet.  “While so many Seattle-King County industries are booming, the cost of sustaining a family and an individual’s livelihood is growing,” she said. “This invaluable resource supports our conversations within the community on how not just a job, but a career pathway, can support individuals and families in their journey forward towards self-sufficiency.”

Housing and child care claim half – or more — of a family’s budget. Housing prices in Puget Sound’s most populous counties — King, Snohomish and Pierce – hit record heights in the spring. Rents have risen steadily, too.

The 2017 Self-Sufficiency Standard report also found:

  • To make ends meet in East King County (including Bellevue, Redmond, Mercer Island), a family of two adults, a preschooler and an infant needs a nearly six-figure annual income — $94,000, driven mostly by housing, child care and taxes.
  • Costs have grown at a much slower pace in most rural counties.
  • In 2006, there was a $6,000 difference between King and Yakima counties in the amount of annual income a family of four needed; today, that gap has expanded to nearly $20,000.
  • Seattle ranks third, behind San Francisco and Brooklyn, respectively, for the hourly wage required to support a single parent, a preschooler and a school-age child: $33.37.

Of the most common occupations in a given county, few pay above the Self-Sufficiency Standard for families. In Kennewick-Richland, for example, only one of the 10 most common jobs – secretary/administrative assistant – pays a median hourly wage above the standard for a single parent with a preschooler. In the Seattle-Bellevue-Everett area, the same is true of three of the most common jobs: software developer, general or operations manager and registered nurse.

Though Seattle has adopted a new $15 hourly minimum wage, the law won’t go into effect for all workers until 2021 – and even then, Pearce said, it’s not enough for a family in Seattle to subsist on without government or other support. What the federal government defines as “poverty,” the report points out, is outdated and too low, its income thresholds more a measure of “deprivation” than poverty.

Boosting wages around the state, and in a variety of service-sector and other popular jobs, is a key solution, the report concludes. “Raising wages can have a positive impact not only for workers, but also for employers by decreasing turnover, increasing work experience and reducing training and recruitment costs.”

Increasing and indexing the minimum wage would provide a wage floor, the report adds, allowing wages to keep pace with inflation.

Over the years, Pearce and her colleagues at the Center for Women’s Welfare have compiled the Self-Sufficiency Standard for 39 of 50 states, as funding allows. Washington’s report has been released every three years; this year a report for North Carolina has been released, while those for Oregon and Michigan are still to come.

In Washington, the Self-Sufficiency Standard provides cost of living data that represents a benchmark of wages required to meet basic household needs for over 700 family types based on family size, composition and location. The Workforce Development Council of Seattle-King  County uses the Self-Sufficiency Standard, and the Self-Sufficiency Calculator they designed and made available statewide , in helping customers plan how much money they will need to keep their family afloat, Pearce said.

Fallihee added, “The Self-Sufficiency Standard and the online calculator tool we developed are used across our 41 WorkSource sites to provide career pathway planning, basic budgeting and links to work supports to customers. Career counselors help individuals and their families track their self-sufficiency progress as they plan for their future long-term career goals.”

Lisa Manzer, the report’s lead researcher, said the data reveals how difficult it is for working families in low-paying jobs to meet that standard.

“It shows the importance of benefits to close the gap between what the wages are and what the needs are,” said Manzer, the senior research coordinator for the Center for Women’s Welfare. “Those benefits are under attack in every state — unfortunately, that hasn’t gone away.”

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For more information, contact Pearce at pearce@uw.edu or Manzer at lmanzer@uw.edu; or Hannah Mello at the Workforce Development Council of Seattle-King County, 206-448-0474, ext. 3014,  or hmello@seakingwdc.org.

 

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