Families struggle far above the poverty line

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Most of us know that life is expensive—but some might be surprised to realize how much. According to the Economic Policy Institute (EPI), a family of four (two adults and two children) needs an annual income of $73,526 to “secure a decent yet modest living” in the Twin Cities. The EPI research is a rare opportunity to see how the cost of living stacks up in over 600 different municipal areas nationwide. Here are some of the average monthly expenses in the Twin Cities:

  • Housing: $920
  • Food: $754
  • Transportation: $607
  • Health care: $1,524
  • Child care: $1,432

Now compare this to minimum wage. Large employers in Minnesota are subject to the federal minimum wage of $7.25 an hour. At full-time this is $15,080 annually. Even with two working parents, minimum wage comes less than halfway to meeting the “decent yet modest” standard. In fact, two full-time workers both need to make $17.67 an hour to reach $73,526.

While other areas of the state are less expensive, the costs still far exceed minimum wage. In rural Minnesota, the annual cost of living is estimated at $65,217. That’s an hourly wage of $15.68 for two full-time workers.

To some people these wages may sound perfectly attainable, but there are many jobs in which they’re not. Workers such as cashiers, daycare workers, home-health aides, custodians, restaurant employees, and others are often hard-pressed to reach a living wage. Why should their children’s healthy upbringing and secure future be at risk? How can we provide the wages and other economic supports these families need to overcome poverty’s obstacles?

The support systems we currently provide fall far short of raising families to a “decent yet modest” standard, primarily because families get cut off from assistance before their incomes reach a sustainable level. For instance, the annual income limit for children to enroll in Medical Assistance is $35,352 for a family of four; for SNAP (food support) it’s $38,040. Families whose incomes are deemed too high for most assistance programs may still be far from economically secure.

There are a few approaches Minnesota could take: raising the minimum wage; increasing economic supports and access to them; or creating more affordable options for housing, health care, and other necessities. Each has its pros and cons. What’s clear is that we can’t wait to take action, because every day we delay is another day that children’s futures are at risk.

To explore the cost of living for other family sizes and regions, check out the EPI’s Family Budget Calculator.