A family of four in Philly needs to earn $68K just to make ends meet, new report finds

Love Park in Philadelphia (Photo via Flickr Commons)

By Michael D’Onofrio

PHILADELPHIA — If a Philadelphia couple with two school-aged children isn’t taking in nearly $68,400 annually, that family can’t cover its basic needs.

That’s according to the nonprofit PathWays PA’s recently released 2020 Overlooked and Undercounted report, an annual calculation, known as the Self-Sufficiency Standard, of the income needed to meet basic needs without public subsidies and other assistance.

The report, which used 2019 data, found one in four working-age households in Pennsylvania — more than 846,000 — lack enough income to cover the real costs of living, including food, housing, childcare, healthcare, transportation and taxes.

Yet only two-fifths of that figure was classified as poor, according to the report.

The report on PathWays PA’s website said the federal poverty measure was outdated and did not take into account enough data to accurately identify the costs for basic needs, leading to a “gross undercount of those with inadequate income.”

“Not only do governmental statistics underestimate the number of households struggling to make ends meet, but it creates broadly held misunderstandings about who is in need,” according to the report on PathWays PA’s website.

Philadelphia had the highest rate of income inadequacy in Pennsylvania, with 43% of households below the standard. The city’s median household income was $43,744, according to the U.S. Census Bureau.

While Philadelphia contained 13% of the state’s population, the city accounted for 21% of households below the standard in Pennsylvania.

The only counties with income inadequacy rates above 30% were Armstrong (31%), Centre (34%), Indiana (31%), and Lehigh (32%).

Philadelphia’s poverty rate was 24.9%, more than double Pennsylvania’s (12.2%) and the national average (11.8%), according to the most recent data from the U.S. Census Bureau.

The OPM’s poverty threshold for 2019 was $13,300 in annual household income for a single individual under 65 years old; $20,578 for two adults and one child; and $25,926 for two adults and two children.

In Pennsylvania, the highest rates of income inadequacy were associated with single-mothers with children, especially for women of color, according to the report. The report found that 65% of households led by a single mother had income inadequacy in Pennsylvania.

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Statewide, the income inadequacy rate for Black households was twice that for white households. The report found that 44% of Black households in the state were below the Standard compared to 20% for white households. The income inadequacy rate was the highest for Latinos and Hispanics at 55%.

In households with two or more workers, people of color also fared worse than whites.

While 11% of white households with two or more workers did not make enough to cover their basic needs, that figure jumped to 29% for people of color.

The majority of households with inadequate income were white, but Black and other people of color were disproportionately represented among households below the Standard. Blacks make up 12% of the state’s population, whereas whites make up 82%.

Higher levels of education were associated with lower rates of income inadequacy, the report found.

People of color and women also must achieve higher levels of education than white men in order to achieve the same level of income adequacy, according to the report. For example, 23% of households headed by white men with a high school diploma experienced income inadequacy, compared to 71% of households headed by women of color with the same level of education.

The University of Washington’s Center for Women’s Welfare calculated the Standard, which was first used in 2996. The calculation is used in 41 states plus the District of Columbia.

PathWays PA is an advocacy group for low-wage workers.

Michael D’Onofrio is a reporter for the Philadelphia Tribune, where this story first appeared.