What is poverty?  The Census Bureau  has just released a new  study of poverty in America defining the wage levels to be considered as poverty level.  For a family of three it’s $17300 and for a family of 4 $21834.  They also have developed a calculator to figure a family budget by state and city so no matter where you live you can figure a budget for what a minimum existence should cost.   Keep in mind please that every bodies budget would be different but for comparison purposes their calculator will do just fine. Here’s the budget for Sacramento:

For the discussion here we will use Sacramento California as our model city.

Sacramento–Arden-Arcade–Roseville, CA HUD Metro FMR Area

Two Parents, One Child

Item Cost

Monthly Housing $982

Monthly Food $514

Monthly Child Care $557

Monthly Transportation $447

Monthly Health Care $243

Monthly Other Necessities $360

Monthly Taxes $261

Monthly Total $3363

Annual Total $40350


NOTE THE FOLLOWING DATA IS DERIVED FROM THE 2000 CENSUS.  Even though the numbers are almost 10 years old they are close because as posted earlier incomes have actually decreased  in the last decade .

Social Indicators

Educational Achievement: Marital Status:

(among people 25 years or older) (among people 15 years or older)

Less than 9th grade: 24.4% Never married: 37.6%

9th-12th grade (nongrad): 18.2% Married: 46.9%

High school graduate: 26.5% Separated: 2.2%

Some college: 20% Widowed: 6.5%

Associate degree: 5.3% Divorced: 6.8%

Bachelors degree: 4.2% Stability/Newcomer Appeal:

Graduate/Professional: 1.4% Same home 5+ years: 55.8%

High school or higher: 57.4% Social and economic indicators

based on 2000 Census sample data.

Bachelors or higher: 5.6%

Green = Above U.S. Avg Red = Below U.S. Avg

Red bkg. = Above U.S. Avg Green bkg. = Below U.S. Avg

Economic Indicators

Household Income Occupation

<$10,000 14.3% (among employed persons over 16)

$10,000-$14,999 8.3% Mgt./Professional 17.5%

$15,000-$24,999 22.1% Service 24.2%

$25,000-$34,999 14.5% Sales/Office 27.1%

$35,000-$49,999 16.1% Farm/Fishing/Forestry 1.7%

$50,000-$74,999 14.8% Construction/Extraction/Maint. 11.3%

$75,000-$99,999 6% Production/Transportation 18.2%

$100,000-$149,999 2.8% Unemployment/Poverty

$150,000-$199,999 0.2% Unemployed 6.3%

$200,000+ 0.9% Below Poverty Line 37%

Median Household Income: $28,598

A quick comparison for a family of 3 a Sacramento family needs $40350 for a Basic Family Budget.  The Median Household income for Sacramento is $28598 which leaves them short $11392 per year or $949 per month. Since the Median is the center of the work force half are at or below the bare existence budget.  The problem gets a lot worse if you add the second child.  You need $48407 per year or $4034 per month leaving you $19804 per year short or $$1650 per month short.

The real scary part is this.  If you accept the basic budget presented here a family of 4 needs $48407 per year to live on a basic budget.  Fully 75% of the work force is at or below this amount of money per year.

I think now you can begin to understand why their is so much credit card debt out there , they needed the money to just get by on.  Yeah , I know your wondering where all the SUV’s came from ,or the big houses and those are a problem I’m not going to take up here, because I truly don’t see how this was doable for many folks, yet it appeared to be happening.

My only point in this post is this.  Even if a family was living on a basic budget the two adults together are averaging $12.10 an hour.  If we are even going to consider a recovery based us spending (we are 70% of the GDP ) we are going to have to increase wages a bunch.  Some have suggested that doubling the minimum wage would be a good place to start. Yep $14.50 an hour would bring even the minimum wage workers up to the basic budget level and since it would raise everybody else with it the two adult earner would get into the $24 per hour bracket and could start to have a much better life.  Imagine , they would be able to actually save for retirement , or for their children’s education or maybe even add a beer or two or a good bottle of wine and if your of mind a little weed to the monthly budget.

Is it doable, you bet it is.  How do we start on the road to this goal. First off you have to buy American, you have to back import tariffs , you have to stop outsourcing of jobs , you have to start making the effort to bring this change.  The Power That Be will not do it for you , they are doing just fine.  You have to do it.

Explore posts in the same categories: CHECKBOOK ECONOMICS


  1. Junior Says:

    I live in Sacramento with my girlfriend. We make roughly $75,000 per year between the two of us, have no outstanding debt, yet we’re living paycheck to paycheck. I can’t imagine what it’s like for a family of three or four, especially with your kids begging you to buy everything they see on TV. It’s crazy.

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