Los Angeles Times
May 18, 2004
Though Far From Poor, a Family Struggles Daily
Two incomes put the Basurto clan well above the poverty line. Yet despite frugal living, they’re middle class in name only.
By Geoffrey Mohan
(Rudy) Basurto is 48 years old. He makes about $20 an hour building cabinets
but can’t afford to buy a home in his Highland Park neighborhood. He has no health insurance, no pension plan and little savings.
Basurto’s family is far from poor, by the official measure. The federal poverty level for a family of five is $21,959. Last year, Rudy and his wife, Maryellen, together earned more than twice that: $45,000.
By the local cost of rent, by what it takes to commute to work, by the price of food at the local store, by the cost of clothing and healthcare, a family like the Basurtos would need more than $40,000 to make ends meet in Los Angeles. Families with younger children and day-care expenses would need closer to $70,000.
That estimate, called a self-sufficient income, is an emerging measure of economic health seldom used in the calculus of poverty.
Policymakers still measure progress in the war on poverty using the federal
poverty level, despite decades of quarrels over its shortcomings. Developed
in the 1960s, the poverty level is based on a food survey from 1955. It tells only how much is too little to live on, not how much is enough to get by on.
“What it means is there are a lot more people without an adequate income in
California than the federal poverty level would indicate,” said Diana Pearce, director of the Center for Women’s Welfare at the University of Washington and a pioneer in calculating self-sufficiency.
By the federal benchmark, 13% of Californians are poor, according to the Census Bureau. By the self-sufficiency standard, 30% don’t make enough to get by.
One reason why the wage-earning middle class increasingly can’t afford California is that wages, adjusted for inflation, have been stagnant for two
decades. In the same time, the percentage of income needed to pay for rent,
healthcare and child care has spiraled.
Economists call this “alligator economics,” because wages are a horizontal or falling line, while costs rise like an alligator’s upper jaw.
The Basurtos, and many thousands of others, live in that jaw.
http://www.latimes.com/news/local/la-me-middle18may18,1,1991378.story?coll=la-home-local
Comment: Our current policies on health care coverage and access fail to adequately serve those caught in the jaw of alligator economics. Numerous simulations have shown that tax credits designed to expand the current system of private plans will never ensure that everyone falling short on self-sufficiency standards would be covered. It is possible to mandate coverage through a public program for those not covered by private plans. But that is the most expensive way to ensure universal coverage, and it falls far short on equity in both funding and access. We can do much better at a significantly lower cost.
Let’s extricate health care from the jaws of alligator economics by establishing our own universal, comprehensive and equitable public program of health insurance. That would bring us much closer to the goal of self-sufficiency for everyone.
