Many California Families Struggle to Afford a Basic Household Budget, Which Averages Nearly $76,000 a Year for a Family of Four With Two Working Parents

SACRAMENTO — Despite strong economic growth and declining unemployment in California in recent years, many households across the state still face significant challenges in affording basic expenses, according to a new report from the California Budget & Policy Center.

At the same time, the report underscores the important role that key public supports play in helping families afford the basics and highlights the importance of increasing these types of supports, even as federal policymakers are on the verge of passing tax and budget policies that would significantly scale them back.

Making Ends Meet: How Much Does It Cost to Support a Family in California? shows that statewide, on average, a family of four with two working parents needs annual earnings of $75,952 to afford a basic family budget. This is equivalent to each working parent having a full-time job that pays $18.26 an hour.

The report also finds that basic annual expenses in California average $59,338 for a two-parent family with one parent working (a budget equal to full-time work at $28.53/hour), $65,865 for a single-parent family (equal to full-time work at $31.67/hour), and $27,878 for a single adult (equal to full-time work at $13.40/hour).

(The family budgets in this analysis estimate the amount of income households would need to cover basic expenses through earnings only, without publicly funded benefits or supports. All family types, except single adult, assume one preschool-aged child and one school-aged child.)

Beyond providing statewide averages, Making Ends Meet estimates basic family budgets — across the four family types — for all 58 California counties. County-level figures provide an important look at the cost of living in different parts of the state, and thereby allow for a greater understanding of the types of financial challenges facing many California families today. View the Making Ends Meet interactive data visualization and accompanying report and county Fact Sheets.

“Across our state, many families are confronting the dual challenges of rising cost of living and wages that are failing to keep pace with what’s needed to cover basic household costs,” said Sara Kimberlin, Senior Policy Analyst at the Budget Center and lead author of the report. “And when families struggle to make ends meet, they can face a wide range of hardships, like living in substandard housing, not having enough food or access to quality child care, or having to forego saving for college or retirement.”

According to the county-level figures in Making Ends Meet:

  • For a family of four with two working parents, a basic annual family budget ranges from a high of $110,984 in San Francisco County to a low of $55,032 in Modoc County.
  • For a family of four with one working parent, a basic family budget ranges from a high of $87,594 in San Francisco County to a low of $44,072 in Modoc County.
  • For a single-parent family, a basic family budget ranges from a high of $103,423 in San Francisco County to a low of $46,053 in Modoc County.
  • For a single adult, a basic budget ranges from a high of $41,868 in San Francisco County to a low of $17,352 in Modoc County.

Overall for a family with both parents working, the five most expensive counties statewide are all in the Bay Area: San Francisco ($110,894 basic annual family budget, as noted above), Marin ($110,544) San Mateo ($108,109), Santa Clara ($93,451), and Alameda ($92,267). The five counties where this basic budget is lowest are all inland areas: Modoc ($55,032), Kern ($57,411), Imperial ($57,814), Siskiyou ($58,550), and Plumas ($58,710).

The Budget Center’s analysis shows that in every California county, the annual salary of a full-time minimum wage worker is not enough to cover the basic budget for a single-parent family, while the combined salary of two full-time minimum wage workers is not enough to cover the basic budget for a two-working-parent family.

While Making Ends Meet shows the significant gap for many Californians between earnings from work and what it costs to afford a modest standard of living, the analysis also points to the important role that publicly funded supports can play in closing it. The report examines five widely available public supports —  the federal Earned Income Tax Credit (EITC) and Additional Child Tax Credit (ACTC); California’s state earned income tax credit (CalEITC); federal food assistance (CalFresh in California); and free or low-cost health care provided through Medicaid (Medi-Cal in California) — and looks at their role in helping families cover a basic budget.

The Budget Center’s analysis shows that key public supports go further in covering the gap between family resources and needs in lower-cost counties than in higher-cost counties. For a single-parent family in a relatively low-cost county like Fresno County, for instance, earnings as a dental assistant plus key supports covers four-fifths (80 percent) of a basic family budget ($50,835). In San Francisco, a high-cost county, earnings in this occupation plus public supports covers just half (50 percent) of a basic family budget ($103,423).

Making Ends Meet points to two fundamental pathways by which policymakers can help families to better afford basic expenses. These include:

  • Boosting family incomes, such as by increasing the minimum wage, strengthening the CalEITC and other tax credits for families with low incomes, and increasing other kinds of direct financial support (SSI/SSP, etc.) for families who cannot work or whose earnings are not enough to cover basic needs.
  • Helping reduce the cost of meeting basic needs, such as through increased public investment in subsidized child care and preschool, affordable housing and housing assistance, and food assistance, among others.

“The right policy choices can make a difference in advancing economic security, something that California has demonstrated in recent years by increasing supports for workers and establishing and then strengthening the CalEITC, among other advances,” said Chris Hoene, Executive Director of the Budget Center. “But the wrong policies can do real harm. So, the current federal tax plan now moving through Congress needs to be viewed through the lens of how it would actually make things worse for low- and middle-income families in California, many of whom are confronting very high costs of living and struggling to get by.”

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The California Budget & Policy Center engages in independent fiscal and policy analysis and public education with the goal of improving public policies affecting the economic and social well-being of low- and middle-income Californians. Support for the Budget Center comes from foundation grants, subscriptions, and individual contributions.