CALCULATING A LIVING WAGE IN SONOMA COUNTY

Insight Center for Community and Economic Development
Family Economic Self-Sufficiency Standard by County
http://www.insightcced.org/index.php?page=ca-sss


The Family Economic Self-Sufficiency Standard (Self-Sufficiency Standard) measures how much income is needed for a family of a certain composition living in a particular county to adequately meet its minimal basic needs. It is based on the costs families face on a daily basis - housing, food, child care, out-of-pocket medical expenses, transportation, and other necessary spending - and provides a complete picture of what it takes for families to make ends meet. In contrast, the Federal Poverty Level (FPL) , which was developed in the early 1960's and is used to determine income eligibility for many public programs, is based on the outdated assumption that food represents one-third of a family's budget. The FPL also fails to take into account housing and transportation costs, geography, and, most importantly, child care costs, which are increasingly more expensive. For a family of four-whether in a high cost market like San Francisco, CA or a more affordable market like Baton Rouge, LA-the poverty level is $22,050 in annual household earnings.

Calculated for 156 different family compositions in all 58 California Counties (and 35 other states), the Family Standard is based on credible, publicly available data sources, including:

* Housing costs: US Housing and Urban Development (HUD) Fair Market Rents and National Low-Income Housing Coalition (NLIHC)

* Child care costs: California Department of Education (CDE)
* Food costs: US Department of Agriculture (USDA) low-cost food plan and ACCRA Cost of Living Index
* Health insurance costs: Medical Expenditure Panel Survey (MEPS)
* Transportation costs: U.S. Census and the National Association of Insurance Commissioners.

The Insight Center for Community and Economic Development estimates that in 2008 a self-sufficiency, or 'living wage,' for Sonoma County was $14.90 an hour for two parents working full-time to support two children and to pay for housing, transportation, health care, child care and food (see below)

Click here for a printable version of this chart

The Self-Sufficiency Standard
(from the Wider Opportunities for Women website http://www.wowonline.org)

This section contains information about the Self-Sufficiency Standard created by Wider Opportunities for Women and Dr. Diana Pearce, founder of the Women and Poverty Project at WOW, and a professor at the University of Washington, School of Social Work. In addition, you may download and print copy of the Self-Sufficiency Standard for any of the states that have Self-Sufficiency Standards.

The Self-Sufficiency Standard calculates how much money working adults need to meet their basic needs without subsidies of any kind. Unlike the federal poverty standard, the Self-Sufficiency Standard accounts for the costs of living and working as they vary by family size and composition and by geographic location.

The Standard defines the amount of income necessary to meet basic needs(including paying taxes) in the regular "marketplace" without public subsidies-such as public housing, food stamps, Medicaid or child care-or private/informal subsidies-such as free babysitting by a relative or friend, food provided by churches or local food banks, or shared housing.The Standard, therefore, estimates the level of income necessary for given family type-whether working now or making the transition to work-to be independent of welfare and/or other public and private subsidies.

The Standard provides important guidance for policymakers and program providers regarding how to target their education, job training, workforce development, and welfare-to-work resources. It helps individuals choose among occupations for work experience and educational training. It also shows policymakers how subsidizing child care, transportation or healthcare impacts the wages necessary for working families to make ends meet.

* The Standard assumes that all adults (whether married or single) work full-time and includes the costs associated with employment-specifically,transportation and taxes, and for families with young children, child care.* The Standard takes into account that many costs differ not only by family size and composition (as does the official poverty measure), but also by the age of children. While food and health care costs are slightly lower for younger children, child care costs are much higher-particularly for children not yet in school-and are a substantial budget item not included in the official poverty measure.* The Standard accounts for regional variations in cost. This feature is particularly important for housing. Housing in the most expensive areas of the country costs four times as much as in the least expensive areas for equivalent size units.* The Standard includes the net effect of taxes and tax credits. It provides for state sales taxes, as well as payroll (Social Security) taxes,and federal and state income taxes. Two credits available to working adults, the Child Care Tax Credit (CCTC) and the Earned Income Tax Credit(EITC) are "credited" against the income needed to meet basic needs-thus reducing the income needed to become economically self-sufficient.

* The Standard accounts for the fact that, over time, various costs increase at different rates. For example, food costs, on which the official poverty thresholds are based, have not increased as fast as housing costs.This failure to account for differential inflation rates among other non-food basic needs is one reason that the official poverty thresholds are no longer an adequate measure of the money required to meet real needs.

Self-Sufficiency Standards for the North Bay

The Report by New Economy, Working Solutions (NEWS), "The Limits of Prosperity: Growth, Inequality and Poverty in the North Bay (2005) presents an explanation of self-sufficiency standards for each county in the North Bay based upon WOW estimates. In particular, see pp. 43-55 of the report.

CLICK HERE FOR "THE LIMITS OF PROSPERITY"

(Please note that the chart on Self-Sufficiency standards updates the chart in the "Limits of Prosperity.")