Almost a third of California households struggle to pay bills

LOS ANGELES — Almost one in three California households struggles to make ends meet and people of color are disproportionately affected by the state’s high cost of living, according to a new study by United Ways of California.

The report found that 3.2 million California households do not earn enough income to pay for food, rent, health care and other essentials “to maintain even an adequate level of economic security.”

United Ways used a Real Cost Measure that goes beyond the federal poverty line and centers on a household budget that also includes the cost of child care, transportation and out-of-pocket health expenses and taxes. As a result, this index shows a poverty rate for California double that reported by the U.S. Census Bureau.

“Things that are surprising is that half of households with young children have income below the poverty level,” said Pete Manzo, president and CEO of United Ways, which represents 34 United Way organizations in California. “Children are our future but the poverty rate is much higher for them. If you had households led by single mothers with young children, the poverty rate is 76 percent or three out of four.”

There are no comparisons to other states or to the U.S. as a whole but United Ways hopes to eventually expand its real-cost research to show a national comparison.

In some California counties, the “real cost of living” can exceed the federal poverty level by 300 percent. In San Diego County, for example, the household budget for two adults with one infant and one school-age child is $57,759 or 248 percent above the federal poverty line.

Five of the poorest neighborhood areas are in Los Angeles County, including Watts, South Central Los Angeles, Bell Gardens and Huntington Park. Contra Costa County, in northern California, had the highest number of neighborhood clusters with low poverty rates

“We want to get people thinking about how do families actually live in a place like Los Angeles,” Manzo said. “Some people argue there’s no way that you need $60,000 to live in L.A. County.”

But housing costs are so high that what may seem like a good income elsewhere doesn’t go far here.

Research by the Southern California Association of Non-Profit Housing found that in the city of Los Angeles, the average rent for a two-bedroom, one-bath apartment is $2,197 a month for a total annual cost of $26,364, which would eat up almost half of a $60,000 income.

“What’s surprising to a lot of people is how much it costs to meet basic needs,” Manzo said. “There’s no fluff in the (real cost) budget. No dining out. No savings.”

Nine out of 10 families in poverty are working, he said.

“There are more and more of these reports coming out on the state of the California economy,” said Larry Gross, executive director of the Coalition for Economic Survival, a Los Angeles non-profit. “They all essentially speak to the same facts. We’re facing economic catastrophe here and the hardest-hit are always low-income communities and people of color.”

More than half of Latino households and 40 percent of African American households have incomes below the real cost measure, compared to 28 percent for Asian Americans and 20 percent for whites.

Immigrants in particular are disproportionately affected: 60 percent of households headed by a non-citizen struggle to make ends meet.

The shortage of affordable housing is so dire that the Los Angeles City Council is considering legalizing rental units that do not now have a city permit, as long as they don’t violate health and safety standards.

“The California dream people are looking for has become the California nightmare,” Gross said. “It’s clear that more and more people are in homes they can’t afford to pay.”

Two-thirds of renters in Los Angeles are spending more than half their income on rent. As a result, Los Angeles County has seven of the 10 ZIP codes in the nation with the worst overcrowding.

“People are forced to double up and triple up because they can’t afford the rent,” Gross said.