Prosperity – in this economy? For most families, a new study finds, they need a six-figure income.
To fully participate in today’s economy and “thrive to thrive,” families need to earn between $96,000 and $150,000 per year, depending on the number and ages of family members living in the household. For singles without children, about $64,000.
The findings are part of a study released Monday by the Urban Institute, an economic policy think tank. The group created an estimate to measure what it costs for families to “thrive, not just survive.”
“Standard economic measures like the poverty rate or the unemployment rate don’t really speak to the struggles that millions of families face,” said Mary Cunningham, senior vice president for research at the Urban Institute, during a webinar about the study Tuesday.
To account for this, the study considered a comprehensive set of factors in its analysis, such as the cost of food, health care, childcare, clothing and retirement savings, as well as income from work, benefits, transfers, tax credits and more. The measure was designed to show a realistic picture of the income and expenses of a typical family.
Whether Americans meet this new measure of financial stability is a coin. The Urban Institute says 49% of Americans earn less than the amount needed for economic security based on their family composition.
In contrast, the latest data from the Census Bureau shows that the average household earns about $84,000 – well below the Urban minimum threshold – and only 10.6% meet the official definition of poverty.
Parents are in survival mode
The picture is especially bleak for parents. Urban’s findings suggest that many families with children are treading water.
$144,700 is needed for a two-parent family with children to be considered financially stable, but the median income for those households is $133,400. Overall, 56% of parents do not meet the Urban limit.
Single parents are in a worse situation. A single parent with one child needs an income of $84,100 to achieve stability, but the average income is just $56,700. The gap widens when one parent has many children. About 90% of single parents earn less than the Urban Limit.
This study adds to a growing body of research on the financial strain of raising children in the US
In the latest American Family Survey, an annual study conducted by Brigham Young University, more than 7 in 10 Americans now say raising children is unaffordable, a huge jump from 58% the year before.
Of course, affordability is a global concern right now, and not just among parents.
“Americans are worried about paying their bills,” Cunningham said. “At best, many pass when they really want to move forward.”
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