Price tag for 'basic economic security' rising, report says

By Carol Morello
Washington Post Staff Writer
Sunday, October 10, 2010; 10:12 PM

A family of four needs an income of $108,000 to be financially secure in Fairfax County, the most expensive area to live in the Washington region. An individual without kids or a car can get by on about $32,000 in the District, the cheapest jurisdiction for singles. And a single parent with one child has to pull in almost $62,000 to make it in Prince George's County.

Those are the conclusions of a detailed cost-of-living analysis by Wider Opportunities for Women, a District-based group that advocates for more job training and financial literacy programs.

In a report being released Monday, the organization calculates how much money is needed to attain what it calls "basic economic security," generally an amount that is three or four times greater than the federal poverty level.

The study, the first of several the group is conducting around the country, grew out of research in which people were asked what would make them feel financially safe.

Most of the people polled described security as having enough to eat, keep a roof over their heads, go to the doctor when they're sick and build up a rainy-day fund, said Joan Kuriansky, WOW's executive director.

The report tries to calculate how much money is needed for the Washington area's residents to reach that goal. It includes tables configured for individuals and families, with separate tables for those who have employer-provided health insurance and those who do not.

The tables include the costs of everything from child care to transportation to work-related expenses like professional clothing. They also include modest monthly savings for emergencies and retirement. But they do not set aside savings for college education or a down payment on a house.

Utilities include a land-line phone, but not a cellphone.

At least one car was considered a necessity in the suburbs, but it was assumed District residents would take public transportation, shaving $220 or more from monthly expenses.

Fairfax County was the most expensive in every category, followed by Montgomery County. The District cost the least for childless singles, but as soon as a child entered the picture, Prince George's County became the cheapest place to live.

In most instances, the biggest monthly expense for working couples with two or more offspring was child care, ahead of housing and taxes.

In WOW's analysis, single mothers are particularly squeezed. In most jurisdictions, the median income for working women who are raising children alone is well beneath WOW's economic security figure. In many of the tables, two working parents earning the minimum wage of $7.25 an hour would each have to work one full-time and one part-time job to reach financial security.

In the two years since the recession officially began, the number of families earning under $25,000 in Washington has crept up in every bracket.

"We're facing a growing gap between the top and bottom, with increasing unemployment and job losses and people making less than they did a couple years ago," said Audrey Singer, a demographer with the Brookings Institution. "There's been a lot of concern about how people can make ends meet in a region such as this one, which has been fairly buffeted during the recession."

By most measures, however, many Washingtonians are well out of financial fear territory. With a median household income of $85,000, according to the latest census data, and an unemployment rate well below the national average, the Washington region is considered the most affluent in the country.

It is also among the costliest.

The Council for Community and Economic Research, an Arlington County-based organization that calculates cost-of-living indexes, estimates it costs about 40 percent more to live here than it does in cities closer to the average, such as Salt Lake City, Las Vegas and Dover, Del.

It lists Washington as the 11th most expensive place to live in the country, just above Oakland, Calif., and behind Nassau County, adjacent to New York City.

"Though we'll never be accused of being a low-cost area, we do reasonably well compared to other major metropolitan regions in the U.S.," said Matt Erskine, senior vice president at the Greater Washington Board of Trade.

He cited another index that lists the region as the seventh most expensive in the nation and 66th internationally.

Because Washington is a relatively costly place, even the highest estimates of how much a family needs to earn are conservative, said Kuriansky.

Montgomery County uses WOW's formula in gathering information for its biannual report on how much income is needed to be "self-sufficient" and live in the county without government assistance.

Its last report, in 2008, said almost $80,000 was necessary for two adults with one infant and one schoolchild.

Today, WOW's new report estimates, that family would need $104,00, including $7,500 for savings.

The study's release coincides with the impending election of a new mayor in the District and his inauguration in January.

The group urged the new administration to focus more resources on programs like job training and financial literacy, and it wants residents of the region to use the cost-of-living tables as a model for saving.

"We believe we're offering not just numbers but a road map for what we can do in the District to enable more residents to be able to move toward more economic security and less anxiety," Kuriansky said.

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