How Much Does It Cost To Raise A Family In San Diego?

TOM FUDGE: Making ends meet in San Diego is a challenge. And people do what they have to. Maybe they do without a car. Maybe they double up with relatives for a place to live or put up with health problems they can't afford to treat. But what you need to earn to live independently, so you don't have to cut corners or deny your kids the advantages they should have. The California Budget Project has asked that question with a view of the entire state and its individual counties including San Diego County. And joining me to talk about this is Luke Reidenbach, he is a policy analyst with the Center for budget policy and lead author of the new report called making ends meet and Luke thank you very much for joining us. LUKE REIDENBACH: Thank you for having me. TOM FUDGE: And it's a California budget Project, sorry about that, Luke. LUKE REIDENBACH: Don't worry about it. TOM FUDGE: Also joining me in studio is Peter Brownell who is research director for the center and policy initiatives, CPI is a labor backed group that calls itself a voice for working people and Peter, thank you very much for coming in. PETER BROWNELL: My pleasure, Tom. TOM FUDGE: Well, Luke we've seen an on-again off-again economic recovery recently but many families across the state are still struggling to get by tell us what you look at in compiling this report and what data you used? LUKE REIDENBACH: Sure, so one of the larger goals of this project was to explore whether California's economy is meeting the needs of workers. So the question we really wanted to answer is whether people are able to cover the day-to-day meet living, to afford housing this means health insurance housing childcare, commuting and clothing. What we found is that throughout California not just San Diego what families need is more than what many actually are. TOM FUDGE: Okay and what are, this is maybe an obvious question but what are the biggest expenses facing families and individuals? LUKE REIDENBACH: So there are three major expenses. There's housing and then there's childcare for those who cannot stay on to raise their kids and then there's also health insurance. And we assume that people have to pay the full cost of their health insurance and that they do not have employer-based health. Those are the three biggies and that's true in San Diego and elsewhere. TOM FUDGE: Okay you're assuming they don't have employer-based healthcare. Now San Diego for a single, according to your study for a single parent of to use it cost $75,244 to get by. Now can you comment a little bit further on that figure? LUKE REIDENBACH: Sure that actually translates into an hourly wage of about $36 an hour and that's driven large part by childcare costs. Child care is often something that we don't think about when we think of family budgets but it's quite expensive. And in San Diego it averages around $1100 a month. So those costs really do add up at the most somebody has see a grandparent or relative that can help share childcare it could be a really expensive item for single parents. TOM FUDGE: No of course not all of California is the same cost. In San Francisco, the single parent with two kids would have to earn $96,000 in order to get by. Into Larry County it would only be $59,000. So expenses are different you look Expenses also for single adults, two-parent families with one parent working and to parents with both working. And I guess the issue in looking at those different groups, one issue of course is the cost of childcare. LUKE REIDENBACH: Right, childcare, so we, for San Diego we estimate it's around $61,000 a year needed for four-person household where only one parent is working that's because we assume the other parent is staying home taking care of the child and actually greatly reduces the annual income needed to pay all the bills. TOM FUDGE: Now looking at transportation for San Diego County looks like for single adults, single-parent family across the board until we get to two working parent family where it is more, the cost of transportation is $332 a month. Now are you assuming they own one car? LUKE REIDENBACH: Right we estimate basically every worker owns a car and those are based on the average sort of weekday miles that people drive in San Diego County. And so we are sort of using that as an estimate for how much it cost to commute in the county. So we assume there's only one car, we do assume that people drive even though there's access to public transportation. There are so many people for so many people that actually doesn't work. It's hard to run errands and so many people are sort of out of range of public transportation so we do assume that people drive. TOM FUDGE: Well Peter Brownell, now let's get you involved in the conversation. What are your comments on this report? PETER BROWNELL: I think this backs up a lot of what we've been finding and saying with our research. We know, we published a report earlier this fall on an annual report on poverty and income in the county and we find on the one hand that 15% of people are below the fold federal poverty line but as we continually emphasize I'm in the federal poverty line really doesn't cover the costs of expenses here in San Diego so so yeah these expenses really back up the much higher cost of living here and the number of people that, despite working may still be unable to pay all their bills and that's one of the things certainly from a policy standpoint our position is very much that anyone who is working full-time year-round should earn enough money to meet their basic needs. TOM FUDGE: The one other affordability index that I'm looking at right now comes from the California Association of realtors. And they have housing affordability index, which is the percentage of households that can actually buy a home. In that area. And in San Diego it's 27%. In other words, only 27% of people in San Diego By the median priced home. What do you think of that, Luke? LUKE REIDENBACH: That's, affordability and housing is a big issue it's also an issue for renters, two. Across California over a quarter of California renters spend at least half their income on rent. That's an extraordinary number. That basically means that rent is sucking a path of people's income for at least a quarter of renters. So the high cost of living spills over to renters too, and in the report we assume people are renters because generally it's cheaper but housing is a major issue for low income people. PETER BROWNELL: And similarly on the poverty report from 48% of San Diego County households paid 30% or more of their income for housing so almost half of families are paying nearly a third of their income or more on housing? TOM FUDGE: Luke, it's interesting that Peter brought up the 30% because you have some pie chartsin your report that showed percentage of a family's income that goes to healthcare, that goes to housing. Now you find also the housing is about 30% of the total or is it a little bit less? LUKE REIDENBACH: It's for a single adult and that's because our estimate includes the cost of childcare which I think generally changes the calculus a bit. But sort of in a standard project, for single adults, housing does represent around a third of the budget. In reality how people are actually spending their money, what they are forced to do is a little different and it ends up that because housing is something that you can't not pay for you can't pay your rent it ends up sucking a big chunk of the income. TOM FUDGE: You're listening to Midday Edition on KPBS. My guests are Luke Reidenbach who is on the front the policy and also the California budget Project and lead author of a new report called making ends meet. Peter Brownell is research director for the San Diego based on current quality initiatives. We are talking about the cost of making do in California and in San Diego. Peter, does our region provide enough affordable housing to its residents? I would assume you would answer that by saying no. PETER BROWNELL: No, and that's one of the big issues that I mean, obviously came up as a policy issue here in the city of San Diego around the workforce housing offset credits which would require developers of new retail jobs that pay essentially that create low-wage jobs that people would not be able to afford for the full market cost of housing, to generate more affordable housing and I think both sides, people have come down on either side of the policy which we support. But I think both sides agreed that there's a huge demand for affordable housing and that policy in and of itself me know, we would certainly argue it moves us in the right direction, but there's still a huge unmet demand. I don't have the numbers available off the top of my head but the need for affordable housing in the city and the county is great. TOM FUDGE: Well, Luke, right but, has the California budget Project up a study in the past? And if so, can you compare our latest results to ones you've seen before? LUKE REIDENBACH: We have done in the past but we really can't compare them because we treat every time we do it for example we tweak the health insurance part this time just because so much is happening right now in healthcare reform and we really wanted to do sort of what must estimate of how much it cost to pay for health insurance prior to the implementation of the affordable care act. So because it's very loosely meet it's hard to compare to past versions of the report. TOM FUDGE: You brought up the affordable care act. Let's talk about that a little bit because there is some commentary in your study about the affordable care act, Obama care and how it might affect the lives of low-income people. It sounds like you do believe that is going to help in terms of paying for healthcare. LUKE REIDENBACH: Absolutely right now if you are buying health insurance on your own individual market it can be quite expensive especially if you are older or if you have children or if you have pre-existing conditions sometimes it's nearly impossible. The full implementation of the affordable care act will actually reduce upfront costs for health insurance for a lot of people in California. TOM FUDGE: And yes do you feel there are other things that the federal level that will make life more difficult for low income people? LUKE REIDENBACH: Right, so while we are upbeat about the implementation of the affordable care act and the impact on people's budgets as a positive thing, things are also moving in the other direction. So the across-the-board budget cuts that we call sequestration that has reduced access to affordable housing vouchers for example and also budget cuts at the state level has reduced access to childcare options. So there is sort of this other and here where instead of increasing access to affordable options for families we are actually reducing excess. TOM FUDGE: And Peter would you like to follow-up on that? PETER BROWNELL: Certainly at the federal level we saw a reduction in food stamps benefits that something that impacted families here in my county greatly and some of the families that are in the most need. So I mean programs like that really go a long way and in sort of providing assistance especially with the recession and you've got a lot of people who are out of work or who are underemployed through no fault of their own the federal government just ended the long term unemployment benefits. You know all those things not only do they help the individuals and families the children in the families that are dealing with these problems but they also help with the flow of dollars and the County that allow those families to continue to make purchases to meet their basic needs which help stimulate the economy and create more jobs in San Diego. So I think the federal level we are being shortsighted in terms of cutting off some of these benefits I really hope families and keep the economy growing in a way that it needs to grow. TOM FUDGE: Well Luke Reidenbach are you hoping that certain people read this study and maybe act on it? LUKE REIDENBACH: We think it's at least important to start the conversation. A lot is happening in California, California to just pass the minimum wage increase which we think is a step in the right direction. But more needs to be done you know, first of all one thing is that we actually think there needs to be greater investment in California's workers across the board both short-term and long-term. So really this is not only about increasing affordability of these necessary expenses but also ensuring that wages grow along with productivity and that workers see sort of the wage gains that they should be seen in an economic recovery. TOM FUDGE: You know Luke, one thing I can do and I should have done earlier is ask us to tell us a little bit about the California budget Project because you have a very kind of wonky name, but what do you do? LUKE REIDENBACH: We do have a wonky name, and we are a small nonprofit nonpartisan research organization that is based in Sacramento and we look at decisions made in Sacramento on the California budget and how they affect low and middle-income Californians. TOM FUDGE: Obviously you need to bring a certain kind of attitude to a study like this and what I mean by that, Luke, is that you have to decide in your own mind what constitutes a livable wage, a dignified wage print and I suppose some people would say no, it's got to be higher, some people would say no, you could get by with less than that. What kind of conversations did you have their at the California budget Project to decide that yes, it does take $75,000 a year for a single-family with two kids to live in San Diego. LUKE REIDENBACH: Well, an important caveat to that is we are not assuming any access to public benefits as well. The reality is that the safety net is actually absolutely crucial in ensuring that people have access to housing and have access to food. Like Peter mentioned, California food stamps programs are absolutely important for low-income families. So we don't expect people, the minimum wage to be $30 an hour but we do expect this to start a conversation about our expectations and what people actually need to earn and whether or not the economy is producing the kind of wage gains that people need. TOM FUDGE: What do you think Peter? What would you consider to be a dignified wage, a wage that will make somebody independent in San Diego? You agree with the conclusions of Luke and his group? PETER BROWNELL: I agree with the basic outlines here. We actually work with the insight Center in Oakland to produce similar self-sufficiency standards for San Diego County and is basically a very similar idea. And we expect to have some new numbers coming out this fall and also a report that explores, the population here how many people are and are not earning enough to meet the needs of the budget that we are working on. But I don't take issue with any of the numbers here. I think these are all very reasonable numbers and I think as Luke was saying they start the conversation around what kind of policies we need to adopt to address the difference between what people need and what they are actually making. TOM FUDGE: Luke, you know the good book says the poor will always be with us. Do you disagree? LUKE REIDENBACH: I don't disagree but I think we could do more to help the poor in California. TOM FUDGE: And Peter what about you, will the poor always be with us? PETER BROWNELL: There are always going to be people poorer than others. I think again that there is a lot we can do in terms of policy and that very same good book was suggesting that we keep an eye out and take care of the least among us. So that is all we need to focus on our policies locally at the state and federal level. TOM FUDGE: Finally Luke, are there stories of families are there families in San Diego and California were doing well? Any stories you want to tell on the upside? LUKE REIDENBACH: Well we have been growing for a few years now since the end of the great recession and by our numbers we're seeing that there's significant wage growth for earners at the top. So some workers actually are seeing significant gains in the economy but unfortunately it's mostly high wage earners. TOM FUDGE: Okay well let me thank my guests, they've been Luke Reidenbach and Peter Brownell. Luke is a policy analyst with the California budget Project. And he's lead author of a new report called making ends meet. You can Google the California budget Project and take a look at their study yourself. Luke, thank you very much. LUKE REIDENBACH: Thank you so much for having me. TOM FUDGE: And Peter Brownell is a researcher for the center for research and policy initiatives in San Diego a labor backed group that calls itself a voice for working people and Peter, thank you. PETER BROWNELL: Thank you, Tom.