New Data Helps Combat Growing Poverty in California

Self-Sufficiency Standard Gives Local Agencies the Tools to Make A Difference
 
Oakland, CA – Today, the Insight Center for Community Economic Development, in partnership with elected officials and agencies throughout the state, unveiled the newly updated 2011 California Family Economic Self-Sufficiency Standard (Self-Sufficiency Standard) — a county-specific measure of the true cost of living for working families in California. In recent years, theSelf-Sufficiency Standard has become a key tool in helping agencies across California address poverty at the local level. Due to rising costs, stagnant wages and increased unemployment over the last three years, direct service providers, charitable foundations and labor unions throughout the state have turned to the Self-Sufficiency Standard as a tool to help them make better decisions about how to effectively allocate resources to help working families in their own community. 

“The Self-Sufficiency Standard is critical to the work of the United Ways throughout the state; it provides us with a true picture of the needs within the communities we serve, informs how we tailor our approaches to increasing financial stability and helps us measure progress toward our collective goals,” said United Ways of California President and CEO Peter Manzo. “We believe that to build financial stability, you have to see and address all the issues including health, education, and income. For example, SparkPoint financial education centers exemplify this holistic approach by offering multiple services in one location and use theSelf-Sufficiency Standard in one-on-one coaching with clients and to evaluate client progress toward reaching financial stability.”
 
But it’s not just charitable foundations and direct service providers that are using theSelf-Sufficiency Standard to make a difference. During contract negotiations in recent years, the American Federation of State, County and Municipal Employees (AFSCME) used theSelf- Sufficiency Standard to win a higher wage floor for UC service workers by demonstrating how far below theSelf-Sufficiency Standard their workers were being paid.
 
“In 2005, the Self-Sufficiency Standard showed that 93% of service workers at the University of California did not earn a wage high enough to sustain a family of one adult and one child without public assistance,” said AFSCME Local 3299 President Lakesha Harrison. “In 2008, we were appalled to find that UC workers had lost ground, with 96% falling below theSelf-Sufficiency Standard. This information helped us convince UC in 2009 that we needed a statewide minimum wage that is now lifting our families out of poverty.”
 
The Self-Sufficiency Standard is based on the costs families face on a daily basis – housing, food, child care, health care, transportation and other necessary basic costs – and is calculated for 156 different family compositions. Moreover, theSelf-Sufficiency Standard uses geographically specific data to provide a county-specific measure of the true cost of living for working families.
 
In contrast, the Federal Poverty Level (FPL), which is the more commonly-used measure for income adequacy, is a four-decade-old, one-size-fits-all measure based solely on the cost of the basic food budget needed to meet minimum nutritional requirements. Yet, the FPL is used to allocate state and federal resources to local communities and determine income eligibility for many public programs. As a result, many families earn too much to qualify for public programs, and yet do not earn enough to make ends meet.
 
A Comparison of the 2008 and 2011 Self-Sufficiency Standards
 
The 2011 Self-Sufficiency Standard reveals that rising costs over the past three years have significantly increased how much families need to earn to make ends meet.TheSelf-Sufficiency Standard for California has increased by $10,000 to $63,000 a year for a family consisting of two adults, one preschooler, and one school-age child, while the minimum wage has remained the same, leaving families earning well below what they need to make ends meet.
 
Other key findings* include: The cost of individual expenses has gone up since 2008, with significant increases in child care, health care and taxes.Child care costs rose an average of 22% since 2008.
Health care costs climbed an average of 27% since 2008.

At the local level, increases in the overall cost of living fluctuated between 15-25% for the two most populated counties in the Bay Area, Central Valley, and Southern California:

 
Together with stagnant wages, increased unemployment and limited state resources, the rising cost of living has widened the gap between what many working families have and what they need to survive in California. The minimum wage, calculated at $16,640 a year for a full-time job, leaves working families well below the threshold of what they must earn in order to meet their most basic needs.
 
“In light of these challenging economic times, state and local policymakers and agencies need the best tools possible in order to fight poverty and build economic security in their communities,” says Jenny Chung Mejia of the Insight Center for Community Economic Development. “The Self-Sufficiency Standard is exactly the kind of tool that policymakers and local agencies need to make informed decisions about policies, programs and services that impact working families in California.” 
 
Calculated by Dr. Diana Pearce at the University of Washington, the Self-Sufficiency Standard is a peer-reviewed measure that accurately assesses the financial needs of California’s working families. The Self-Sufficiency Standard methodology uses widely accepted and credible national and state data sources such as the U.S. Census Bureau and the U.S. Department of Housing and Urban Development (HUD).Geographically relevant data is used for each county in California, reflecting local market rates for items such as housing, food, health care, child care, and transportation.
 
The newly updated data for every county in California is available online at www.insightcced.org.

*In order to produce comparisons that were indicative of changes to the Self-Sufficiency Standard from 2008 to 2011, the findings in this section are based on data from the two most populated counties of the Central Valley, Southern California, and Northern California (Fresno County, Sacramento County, L.A. County, San Diego County, Alameda County, and Santa Clara County).
 
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The Insight Center for Community Economic Development (formerly NEDLC) is a 42-year old national research, consulting, and legal nonprofit organization dedicated to building economic health and opportunity in vulnerable communities. The Insight Center utilizes a wide array of community economic development strategies including: industry-focused workforce development, individual and community asset building, connecting early care and education to economic development, providing legal support to California’s legal service programs and community-based organizations, and advocating for the adoption of the Self-Sufficiency Standard as a measure of income adequacy and an alternative to the Federal Poverty Level.
 
For more information on the Insight Center and the Self-Sufficiency Standard, please visitwww.insightcced.org or contact Jenny Chung Mejia by phone 213.235.2614, or email atjchung@insightcced.org.

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