Almost half of US families can't afford basics like rent and food

https://money.cnn.com/2018/05/17/news/economy/us-middle-class-basics-study/index.html

by llamataboot • 7 years ago

45 59 7 years ago

money.cnn.com

fuzz4lyfe3• 7 years ago

If "Nearly 51 million households don't earn enough to afford a monthly budget that includes housing, food, child care, health care, transportation and a cell phone"

Is true does that mean those households do without those things? Or are they subsidized via other methods? Medicare/medicaid for health insurance for example. Such programs often have income maximums that households may be attempting to optimise for.

We often hear about millions not making a living wage but the fact that we don't have millions of corpses makes that claim less effective as it exposes it as rhetoric. Or perhaps millions are dying from exposure and malnutrition as is claimed and I can't find that data.

pnutjam• 7 years ago

They end up shuffling between homelessness, homeless programs, and family / friends.

A good portion of the children pass through the foster care system and the adults end up in jail or prison for various stretches.

It's a very expensive system, and people's lives are wasted even if they are not out right killed.

maxlybbert2• 7 years ago

I’m sure many people do shuffle through homelessness and homeless programs, but it’s certainly not half the country.

Seriously, unless next week’s headline is “millions of Americans have been dying of starvation and nobody noticed,” the article has no connection to reality.

skrebbel• 7 years ago

They end up shuffling between homelessness, homeless programs, and family / friends.

51 million people? A sixth of the US?

perfmode• 7 years ago

debt. going hungry. going without shelter. going without health care. going without cell phone. going without transportation. it's not rocket science. it's just poverty.

oceanghost2• 7 years ago

I live in a poor area of Southern California. I'd say the majority of the town receives state benefits. There are also stands that give away free cell phones and service (some state program). I have no idea how it works, but its there.

fuzz4lyfe3• 7 years ago

I have similar programs near me for all the items mentioned. I wonder if this metric actually means anything, if you did a similar survey in Europe I suspect you'd find many that can't afford private health insurance but since healthcare is often provided by the state that is meaningless as a barometer of human suffering.

danesparza• 7 years ago

I would argue that there are worse things than the sweet release of death.

Living without dignity might be one of them.

That being said, I'm not sure how I feel about having "cell phone" in that list of things that are considered necessities.

zeendo• 7 years ago

Cellphones are cheap computers these days. It's very hard to participate in today's economy, much less its education system, without internet access.

chadlavi• 7 years ago

Land line phones are more expensive, and require a stable address; public phones are scarce and getting scarcer.

Mobile phones are a necessity.

deogeo2• 7 years ago

Cell phone could be necessary for many jobs (like deliveries). And cell phone + mobile data can be a cheaper alternative to computer + landline internet, which is pretty essential nowadays. Even if you argue you can do without, the money you'd spend on transportation to do in person what you'd otherwise do online would outweigh the price of a cell-phone. Not to mention the time you save, which can be used to avoid need to spend on childcare, or bring in more money with an extra job, or by using that time to cook, or... (haste makes waste).

badpun• 7 years ago

I'm guessing there are welfare programs that make up the difference? Subsidised housing, food stamps etc.

helen___keller2• 7 years ago

I strongly recommend viewing the actual source information instead of the cnn article

https://www.unitedforalice.org/home

The 51 million households aren't literally on the verge of starvation, they are "Asset Limited, Income Constrained, Employed" (ALICE) which is similar to being paycheck to paycheck in that they can survive but not thrive:

When funds run short, cash-strapped households are forced to make impossible choices, such as deciding between quality child care or paying the rent, filling a prescription or fixing the car. These short-term decisions have long-term consequences not only for ALICE families, but for all of us.

pxue• 7 years ago

one of the most important key stat is defining housing spend to be "no more than one-third of income"

if you make >3x your rent i'd say you are cruising in life.

amelius• 7 years ago

Also, these people are more wealthy than people (in the same income percentile), say, 100 years ago. This makes me wonder if capitalism always progresses to such a point that a large portion of the population lives in misery.

FabHK3• 7 years ago

Another article discussed here recently claimed that US median worker real wages have barely increased at all over the last 40 years. But, yes, you are right, there was plenty of progress and growth from the 1920s to the 1970s (when the spectre of communism was haunting the world, and the top marginal tax rate in the USA was between 70% and 90%).

nostrademons• 7 years ago

The methodology is described here:

https://www.dropbox.com/s/ne0s04q4wfhuih6/19UW_ALICE_Project...

The standards they use are not lavish (renting an efficiency apartment for a single person or 2BR for family of 3 or more, home daycares, "thrifty" meals), but there are some statistical quirks that make this headline a little misleading. They set the housing budget at "the 40th percentile rent", health care at "average health care expenses", and transportation at "average transportation expenses". This is like saying 40% of households are below the 40th percentile, which is kinda duh.

In practice, families that don't make a lot of money (or that do make a lot of money but want to save up a shit-ton and retire) make do with a bunch of cheap alternative living arrangements. Instead of paying full rent, multiple families double-up or triple-up in a housing unit. Multiple generations live together. Grandma takes care of the kids instead of paying for childcare. They shop in budget produce markets. They just don't go to the doctor and hope it's not serious. They walk to work, and the kids take the bus to school.

bryanlarsen• 7 years ago

Most of your comment is spot on, I thought I'd just nit-pick a bit. In America, it's generally only the rich that have the luxury of walking to work; the rich can afford to live where it's convenient. The poor live where it's cheap, which is rarely close to where they work.

mbostleman• 7 years ago

At least with census data there has been a well known gap for some time between data on income vs. data on consumption, with the latter generally being higher. Census poverty data does not count a number of benefits including food stamps and the Earned Income Tax Credit.

LUmBULtERA5• 7 years ago

"For instance, in Seattle's King County, the annual household survival budget for a family of four (including one infant and one preschooler) in 2016 was nearly $85,000."

An $85,000 "budget" is needed for a 4-person household's "survival" in King County? Otherwise they're dying? Maybe United Way's underlying data explains this better, but CNN's conclusions don't seem well explained or supported.

Edit: What's weird is if you look into the ALICE project's website, their number appears to be $74,052, not $85,000. [0]

Also definition of Survival Budget is on that page, but the definition of "survival" is a bit different than a standard dictionary.

[0] https://www.unitedforalice.org/washington

CabSauce• 7 years ago

"households don't earn enough to afford a monthly budget that includes housing, food, child care, health care, transportation and a cell phone"

Literally the first line of the article.

Brendinooo5• 7 years ago

Yeah, but dig into the specifics. OP's link allocated $586 a month for food - my family is bigger than the example, and we spend about half of that on groceries. We'll eat out to make up some of the difference, but if we're getting fast food once or twice a week, I wouldn't say we are in a "survival" scenario.

Child care is also assumed here, but is not necessary in a two-parent home. Take that off the board and you free up around $15k, as well as some of the tax money as well. And does that tax estimate include the $2k/kid child tax credit?

What is "Miscellaneous"?

The hourly wage assumes a 2000-hour work year. So theoretically two people could work $15.50/hour jobs and meet this requirement, or you could knock the food budget in half, drop child care, and get the total hourly wage down to $21.50 an hour. That could be one parent working 20 hours a week at $10/hr and another working 40/week at $17/hr. Or someone could earn extra hours to get some spending money. I do that to supplement my family's income.

I dunno. "Survival" is such a strong word, and I'm really skeptical that it applies here.

akvadrako• 7 years ago

I’m not sure why you’d expect any reasonableness from CNN. It’s clear they only care about clicks and focus on the outrage segment.

llamataboot• 7 years ago

I'm not sure whether you are arguing in good faith or not, so I'd say just bypass all the 'survival' stuff you are stuck on and essentially replace it with 'middle class'.

Now you may also be pedantic and say that middle-class is supposed to be the middle, so 50% is about right.

But what you can't argue with is that nearly half of Americans simply cannot build any wealth or get out of any debt and likely can't meet the basic standards of education/transportation/food/housing that we used to assume was the birthright of any American (1).

And that this is much higher than it used to be, and it is getting worse. And that literally most of the basic working class of the US - nurses aides, childcare workers, etc are often literally one missed paycheck away from the street.

1) May not apply depending on skin color

LUmBULtERA5• 7 years ago

nearly half of Americans simply cannot build any wealth or get out of any debt and likely can't meet the basic standards of education/transportation/food/housing that we used to assume was the birthright of any American

If one takes the median household income in the United States $75,938[0] in 2017, you're asserting that it is literally impossible ("simply cannot") to design a budget to build wealth, get out of debt, and those other items you mention? Some families are certainly in a dire circumstance, but I disagree that the median family can't build wealth and meet those other items if they budget responsibly.

[0] https://fred.stlouisfed.org/series/MEFAINUSA646N

Brendinooo5• 7 years ago

I don't think you can just swap out the word "survival" with "middle class". Survival is a really powerful word, "the state or fact of continuing to live or exist, typically in spite of an accident, ordeal, or difficult circumstances." So the claim is that you need $85k in King County in order to continue to live.

This isn't pedantry. If people are scraping by in that area with less family income, then this metric is flawed and either the numbers should be revised or it should be renamed.

maxlybbert2• 7 years ago

“Almost half of US families can’t afford basics like rent or food” is simply false.

“Almost half of US families are middle class or below” isn’t a crisis, and implies that more than half of US families are upper class.

“Almost half of US families have little to no disposable income” may be accurate and a serious problem, but doesn’t get enough clicks.

This reminds me of the charity that published a press release saying the Great Barrier Reef had died, only to have scientists dispute the press release and call it unhelpful.

abstractbarista• 7 years ago

I am always curious of the discretionary spending when these reports come out. And they never seem to talk about it. What percentage of their income is going to things not needed to survive?

I don't want to make rash assumptions, but it sure seems like many people "live paycheck to paycheck" but still buy alcohol, watch Netflix, etc. I realize they've made the choice to be that way - as opposed to being pinched into it. Of course others are truly screwed, and simply must find ways to increase income.

Miner49er4• 7 years ago

How's that different then a standard definition of survive? Everything listed there is needed to survive.

LUmBULtERA5• 7 years ago

If that's the case, you're literally saying that families of 4 in King County earning less than $85,000 are dying. I don't think this is the case.

Brendinooo5• 7 years ago

"Technology" is a cell phone budget. Could you survive without a cell phone?

Plenty of families have a child care budget of zero dollars, and survive.

If the alternative was death, could you cut your housing budget in half by sharing a place with someone, or by renting out a spare room?

chungleong2• 7 years ago

According to https://www.givingwhatwecan.org, an income of $85,000 in the US would put a household of four in the top 3.5% of the world's population.

sdinsn• 7 years ago

Which is irrelevant.

shijie• 7 years ago

This is quite a disingenuous title for CNN. The actual study reference in the article (and not even directly, one must go to the linked website and dig around for it) identifies a new subgroup of the US population that are "asset-limited, income-constrained, and employed," or ALICE.

Nowhere does it say in the study that these people cannot afford rent and food.

These people's financial stability is more tenuous, yes, but they can afford rent and food. What a silly and dishonest conclusion made by CNN.

sys_64738• 7 years ago

"asset-limited, income-constrained, and employed"

AKA have no savings and have minimum wage jobs. The USA needs universal healthcare for all.

Almost half of US families can't afford basics like rent and food

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