Even the cheapest city is too expensive for a family on minimum wage

August 27, 2015, 9:54 PM UTC
Retail Operations Inside A Tesco Plc Supermarket Grocery Store
Customers push shopping carts as they shop for goods inside a Tesco supermarket, operated by Tesco Plc, in London, U.K., on Monday, April 20, 2015. Tesco's April 22 results will serve as a reminder of the scale of the task still facing new Chief Executive Officer Dave Lewis after his decision to close dozens of stores, cancel some openings, consolidate head offices and cut prices on hundreds of branded goods. Photographer: Jason Alden/Bloomberg via Getty Images
Photograph by Jason Alden – Getty Images

According to a new paper by the left-leaning think tank the Economic Policy Institute, most families subsiding on minimum-wage jobs would struggle to achieve a modest but secure quality of life, no matter where in the United States they reside.

In Morristown, Tenn., which EPI calculated as the cheapest city for a two-adult, two-child family, an annual family budget amounts to $49,114. In comparison, the federal poverty line for a two-adult, two-child family in 2014 was set at $24,008. Two adults working the federal minimum wage would bring home a total of $30,160 each year–above the poverty rate, but far below the amount needed for a holistic budget.

Meanwhile, in Washington, D.C., EPI found that a two-adult, two-child family has to shell out $106,493 a year. That’s even more than families in New York’s metro area, primarily due to high child care costs.

The report highlights the wide variation in living costs across the country–a diversity that is not accounted for in federal poverty standards.

EPI calculated the budget for families in more than 600 communities and regions by accounting for rent, food, health care, transportation, child care, other necessities and taxes. In the majority of locations, child care costs were higher than rent for two-child families.