California or the Golden State is known as a country full of opportunities. It is believed that California provides a chance to thrive to all families and individuals. However, this isn’t true and there are many Californians who can’t meet their basic needs. So, what is the living wage in California?
A living wage is an amount a person needs to earn (before taxes) in order to cover all basic household expenses, including healthcare, food, housing, childcare, and transportation. This rate is based on full-time work or 2,080 hours per year. It has been estimated that an individual in California needs to earn $12.30/hour on average so they can cover the basic living expenses. However, this rate has a tendency to rise and reach more than $25/hour.
It has been concluded that the living wage rate differs based on household types and county. Hence, there is a significant gap between a region’s minimum wage and its living wage. The actual cost of living in California, of course, varies significantly by region.
The main premise among people who protest and support a higher minimum wage is the fact that an individual who works a full-time job shouldn’t live in poverty. Thus, the minimum wage has to be so high that it ensures you don’t live in poverty.
For example, let’s take Los Angeles County into account and a household with one adult. The new minimum wage is $15/hr. So, it means that an individual will make $31,200 a year (121% of the living wage). On the other hand, the county living wage is $25,878 a year ($12.44 an hour). Hence, let’s take a closer look at a typical cost in Los Angeles County for the chosen household.
It is estimated that a household with one adult has the following yearly expenses:
- transportation: $4,054 a year
- housing: $10,752 a year
- food: $3,607 a year
- childcare: $0 a year
- healthcare: $2,099 a year
As San Francisco County has the highest estimated cost, it has been estimated that a two-working-parent family needs roughly $111,000 per year to make ends meet.
On a statewide level, it is determined that a family with two working parents and two children needs roughly $76,000 annually to cover basic necessities, while a two-parent family with one working parent needs about $59,000 per year. Moreover, a single-parent family with two children needs approximately $66,000 per year to cover basic expenses, on average, while a single adult requires nearly $28,000.