Real Cost Measure

Struggling to Move Up: The Real Cost Measure in California 2021

Nearly one in three California families are struggling to cover their daily needs, according to a new study released by United Ways of California that defines which families struggle financially in California more accurately than the federal poverty level, and demonstrates that the current policy debates around child care, housing costs, and family tax credits are more urgent than ever.

The study, Struggling to Move Up: The Real Cost Measure in California 2021, finds that the share of families that struggle financially is 250 percent higher in California than what is factored in the federal government’s measure. It amounts to 3.5 million families who are unable to meet basic needs — a situation affecting Latino and Black households at much higher rates than other communities. The federal government uses an outdated formula for calculating poverty —one that fails to take into account how much rent, transportation, healthcare, and other basic needs cost in California.

“This study shows that many more California working families struggle to meet living costs than official estimates, and identifies significant gaps between what it costs for families and their children to live with dignity and what they actually earn,” said Peter Manzo, President & CEO of United Ways of California. “This new perspective should be the yardstick by which we set our priorities, and the study is a wake-up call to local community partners, civic leaders, the business sector, and elected officials that so much more needs to be done to help families not just survive but actually thrive.”

According to the study, the actual cost of living for a family of four (two adults, one pre-schooler and one school-aged child) in Los Angeles County is $95,112 and $77,072 for a similar family in Sacramento County. By comparison, the federal government says those same families would only need $26,500 to be categorized as not living in poverty.