One-third of U.S. households with fulltime workers fail to cover their basic costs

35% of families who work full time don’t earn enough for basic necessities such as housing, food, medical care, transportation to work, child care and minimal household expenses

The situation is even more dire for Black and Hispanic families, according to the report. More than half cannot afford basic needs, compared to 25% of white families and 23% of Asian and Pacific Islander families. Inequities remain even when controlling for education and occupation.

“This is contributing to a significant difference in the opportunities that families can provide for their children,” said Abigail Walters, a research associate at the Institute for Child, Youth and Family Policy. “Full-time work doesn’t pay, and families need a raise.”

The report found that 35% of families who work full time don’t earn enough for basic necessities such as housing, food, medical care, transportation to work, child care and minimal household expenses.  For low-income families – those whose income falls below 200% of the supplemental poverty measure, or $52,492 for two adults and two related children in 2020 it’s – 77% who can’t pay the bills despite working full time.

The report found that low-income families working full time would need an additional $23,500 annually – or $11 more per hour – to cover basic expenses. Black and Hispanic families would need about $26,000 more per year. The data used in the report is from 2015 to 2019. Researchers say the situation has likely gotten worse after the pandemic brought on massive layoffs and record inflation rates. Researchers noted that earning more isn’t as easy as changing fields or taking on a second job.

“There are issues with structural racism,” Walters said. “There are significant barriers to getting the better job, whether it’s due to hiring discrimination or being the last hired and first fired, as well as pay gaps.”

Researchers outlined actions employers and policymakers can take to help families:

• Give working families a raise: Employers can help by raising wages, offering more benefits and providing opportunities to advance to higher-paying jobs. Alternatively, policymakers can boost families’ incomes with increased tax credits.
• Fix the child care system: A more affordable child care system would also benefit families struggling to afford the basics. The average annual cost of child care in the U.S. is $10,174, according to the nonprofit advocacy group Child Care Aware.
• Expand paid family and medical leave: Researchers say families should be able to afford medical leave without the threat of losing their job or a substantial portion of their income.

About 80% of families working full time have access to health insurance from their employer if they are white or Asian. If they’re Black or Hispanic, it’s only 71% and 59%, respectively. Employer benefits are less common for low-income families. Less than half of low-income Hispanic families with full-time jobs have access to health insurance from their employers.

“The low wages are not being made up by employer benefits,” said Pamela Joshi, a senior research scientist and the paper’s lead author.

Bailey Schulz / USA Today