EPI's budget calculator simply uses an algorithm based on housing, food, transportation, child care, health care and other necessities, as well as adding in taxes. Those rough numbers are calculated in each geographic area in order to provide varying benchmarks for different locations, based on the cost of living in those places.
The housing costs, for example, came from the Department of Housing and Urban Development’s (HUD) fair market rents, which represents the 40th percentile of housing prices in that region. That means that 60 percent of two-bedroom apartments in the San Francisco metro area are more expensive than the $1,795/month the EPI budget calculator used. In the Oakland-Fremont area, the HUD 40th percentile projected that a two-bedroom apartment would cost $1,361. These numbers are not averages, which would be slightly higher.
While the other costs are calculated from different guidelines and methodology -- transportation costs are based on the average number of miles driven in that region, according to the National Household Travel Survey and child-care costs came from the annual Child Care Aware of America report -- it was the housing prices that raised the most questions.
The Bay Area has one of the least affordable housing markets in the country, and rents vary drastically by neighborhood and region.
Certainly plenty of neighborhoods in San Francisco have few (or no) options for $1,795. But, some argued for the benefits of their lesser-known and cheaper neighborhoods, and others advocated for hidden gems outside the city.
EPI's board chairman, Richard L. Trumka, is the former president of the AFL-CIO. The board also includes presidents of the United Steelworkers of America, SEIU and the United Auto Workers, as well as a former labor secretary, a current Democratic congressman and a number of professors. The organization's mission is "to broaden discussions about economic policy to include the needs of low- and middle-income workers," according to its website.
The goal of the budget calculator isn't to prescribe a set amount that a family can live on. EPI’s family budgets -- compared with the federal poverty guidelines -- aims to "offer a higher degree of geographic customization and provide a more accurate measure of economic security," says its website.
Is the calculator perfect? No. But, does it help make clear that the poverty line of $23,550 isn't enough in San Francisco? Absolutely.
