The Real Cost Measure was developed by advocates to capture what an annual budget looks like for a family in California meeting all of their basic needs, which include: food, housing, healthcare, child care, and transportation. These areas of need were elevated in conversations with First 5 LA program officers and Regional Network Grantees as being directly impacted or exacerbated by the pandemic, revealing the necessity for systemic reforms. When thinking about the real cost to support essential workers and their families in Best Start, it is important to understand each of these areas and their relationship to one another. Improving food access requires an understanding of income limitations for high rent-burdened families to purchase healthy food; access to quality healthcare may be impeded due to the lack of public transportation infrastructure or other means of transport. Using the Real Cost Measure as a framework for understanding where to direct investments ensures that a holistic approach guides future planning and directly connects with the needs of families.
Annual Budget
This graph illustrates what an annual budget looks like for a family of two adults, one preschooler, and one school-age child living in Los Angeles County compared to the county median household income. The median household income of $64,251 is clearly insufficient to meet the basic needs of most families with children. Several First 5 LA program officers and Regional Network Grantees noted that financial insecurity is increasing among families due to the pandemic.
Why this matters: The Real Cost Measure resets the baseline for what expected costs are for a family with children. While it does not capture the varying costs of living within Los Angeles County, it helps reframe the mental model around the needs and costs of a family’s fundamental needs.
Households Earning Below Real Cost Measure
Across all fourteen Best Start geographies, over one-third of these families earn less than enough to meet their basic needs. If we are serious about the success of Los Angeles County and its residents, we must get serious about meeting the real costs of our essential workers.
Households in L.A. County by Race Earning Below Real Cost Measure
Why this matters: Significant racial disparity exists among families who earn less than the Real Cost Measure. Over 600,000 Latinx families earn an income below the Real Cost Measure, making these families the largest racial group to live on less than what is required to meet one’s basic needs. Latinx families also make up the majority of families living in the Best Start geographies. In total, it is not sustainable for almost one million Angeleno families to earn incomes below the real cost of living for L.A.
Economic Impact of the Covid-19 Pandemic
Economic insecurity is one of the most pressing community priorities across all five of the Best Start regions. Constrained income makes it harder for families to provide for all the fundamental needs of children as outlined in the Real Cost Measure. Focusing on WIC families provides an additional perspective, as these families are already in higher need and a significant portion of them are essential workers.
WIC Families Became Unemployed Due to the Pandemic
Across all five Best Start regions, nearly one-third of WIC families became unemployed as a result of the pandemic. Many families that remained employed experienced reduced hours, which resulted in limited income. At least two-fifths of WIC families in the Best Start regions worked less due to Covid.
Why this matters: Loss of employment makes it harder for WIC families, who were already earning incomes below the real cost of living in Los Angeles, to provide for their families. Economic security is crucial to meeting the basic needs of families, such as child care and food access.
