Raise Illinois Coalition Releases New Study that Shows the Real Costs of Supporting a Family in Illinois

Economic Policy Institute's New "Family Budget Calculator" Demonstrates that It Is Impossible for Families Living On Minimum Wage Jobs to Make Ends Meet

CHICAGO, July 11, 2013 /PRNewswire-USNewswire/ -- Raise Illinois, a statewide coalition working to increase the state's minimum wage, released an important new study today that demonstrated the real costs for Illinois' families to live modest, economically secure lives which are currently impossible for minimum-wage workers to achieve.

The Economic Policy Institute (EPI) report, "What Families Need to Get By: The 2013 Update of EPI's Family Budget Calculator" explained that the dollar amount necessary for a family in Illinois to attain an economically stable position is much higher than conventional estimates. The study looked at six different family types – single and two parent households, with either one, two, or three children – and broke down the family living costs in specific cities and regions in Illinois.  The EPI report looked at costs for housing, food, child care, transportation, health care, other necessities and taxes.

EPI's Family Budget Calculator by region and family type: http://www.epi.org/resources/budget/

OVERVIEW: What Families Need to Get By: The 2013 Update of EPI's Family Budget Calculator (EPI Issue Brief #368) http://www.epi.org/publication/ib368-basic-family-budgets/

METHODOLOGY: Economic Policy Institute 2013 Family Budget Calculator: Technical Documentation (EPI Working Paper #297)

http://www.epi.org/publication/wp297-2013-family-budget-calculator-technical-documentation/

EPI's Family Budget Calculator used data and analysis to demonstrate the sheer level of inequality in Illinois and across the country.  For example, for a single parent with three children living in Chicago, EPI estimated that a parent would require $79,277 per year just to have a modest and secure living. And although there are cost differentials between cities, EPI calculated that a single parent with three children in Springfield required $77,143 per year. 

The study noted that monthly child care costs are the largest individual expenses for a single parent, three children family at $1,779 per month in both Chicago and Springfield.  In addition to raising the state's minimum wage, advocates said that providing quality, affordable child care could greatly assist working families and give a substantial boost to low-income parents.

"Clearly, a substantial number of working families don't have incomes even remotely close to what families need to create a stable environment," said Michelle Young, President of Action Now, a Raise Illinois coalition partner releasing EPI's study.  "Having a modest and economically secure income, compared to making minimum wage, is the difference between being able to afford healthy food at home and sending kids to school hungry."

Elise Gould, EPI director of health policy research and the study's main author, said, "The actual amount of money a family needs to provide the most basic necessities exceeds the official poverty threshold, which stood at $23,364 for a single-parent, three-child family in 2012, for all six family types in all 615 family budget areas studied in EPI's national report."

Even in the best of economic times, many parents in low-wage jobs will not earn enough through work to meet basic family needs. Annual wages for one full-time, full-year minimum-wage worker in Illinois is about $17,160 a year, far below what is necessary for a one-parent, one-child family to live on in the least expensive family budget area in the state, which is the Quad Cities (Davenport / Moline) at $44,537 per year according to EPI.

"The fact that hardworking families are struggling to make ends meet, even with minimum-wage jobs, makes clear how crucial it is for state lawmakers to support raising the minimum wage," said Kimberly Drew, from Heartland Alliance for Human Needs & Human Rights. "It is, without a doubt, the most immediate and substantial investment Illinois can make in the lives of working families to give them a boost."

"Over time, the federal minimum wage has fallen so significantly below increases in the cost of living that its purchasing power is 13 percent less than in the late 1970s," according to Ralph Martire, Executive Director of the Center for Tax and Budget Accountability. "Meanwhile, wages overall for low- and moderate-income families have been flat or declining for three decades. This has hurt the U.S. and Illinois economies, which are dependent on consumer spending to grow. Increasing the state's minimum wage, and then indexing it to inflation, is one sure fire way to both help low-income working families make ends meet and spur job growth by fueling consumer spending."

SOURCE Raise Illinois