Yesterday, we talked about how DC is a tale of two economies ‘ a city that offers strong employment opportunities for those with advanced job skills but few opportunities to those who are struggling to find even low-wage work.
But beyond the difficulty of finding a job, is the difficulty many residents in DC face of having that job cover their basic needs.
It’s no secret that DC is an expensive place to live. The Economic Policy Institute (EPI) estimates that a family of three in DC needs to earn $63,204 a year just to cover basic necessities like housing, food, health care, child care and transportation.[1] No savings, no emergencies, no birthday presents — just the basics.
So how well do wages earned by DC residents serve to meet a basic family budget? Not great if you have a low- or even moderate-income.
- DC workers in the bottom quarter of the wage distribution earn about $27,900 a year, enough to cover just 44 percent ‘ less than half ‘ of what it takes to meet the basic needs for a family of three. Compared to the largest cities in each state, DC ranks third worst for affordability at low-wages. Only residents in New York and Honolulu are worse off, but not by much.
- If you earn the median wage in DC about $47,000 a year, your earnings cover 74 percent of the basic family budget, still not enough for even the most basic needs. That makes DC the eleventh worst city for affordability at the median wage. (The median is the midpoint: half of DC workers earn below the median wage and half earn more)
- But if your wages are in the 75th percentile, or around $80,040 a year, you might just be in luck. Your earnings cover 126 percent of the basic family budget, meaning it’s pretty likely that you can afford the basic necessities and maybe some extras like a savings account or birthday presents. DC ranks as 28th worst for affordability at the higher wage.
With Labor Day just behind us, it’s important to remember that jobs are essential, but jobs also need to pay enough to make ends meet. The huge gap between wages and cost of living also demonstrates why work supports, things like health insurance, paid sick leave, and the Earned Income Tax Credit are important. Some jobs just don’t pay enough to live on. It’s what Labor Day creators, and many others, have worked to change.
[1] See: http://www.epi.org/content/budget_calculator/. All figures are adjusted for inflation to 2009 dollars.
