How Much is Enough? Basic Family Budgets for Working Families

by Jared Bernstein

With the advent of welfare reform and renewed interest in working poverty, policy analysts and advocates for the poor have become interested in the question, what is an adequate family income for a working family? This report examines this issue. It reviews and critiques the current U.S. poverty measure and argues that it is not conceptually up to the task of answering the question posed above. At the heart of the report is a detailed analysis of each of the items that goes into basic budgets for working families, including food, housing, child care, health care, and transportation. The authors identify best practices from the literature in deriving the cost estimates of these necessities, and discuss the strengths and weaknesses of various approaches and data sources. The report concludes that given the wages available to low-wage workers, and the costs of decent housing, suitable child care, and other work-related expenses, many low-income working families will not be able to earn enough to meet their essential consumption needs. This finding provides a compelling rational for policies to raise wages in the low-wage sector and expand subsidies to support work.

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Published May 1, 2000