Modest life for families in Honolulu costs $78K

A family of four must earn nearly $78,000 a year just to live modestly in Hono­lulu, a new study showed.

The 2013 Family Budget Calculator released by the Economic Policy Institute, a Washington, D.C.-based nonprofit, estimates a household with two adults and two children would need to earn more than triple the federal poverty level of $23,283 "to attain a secure yet modest living standard" in Hono­lulu.

"Therefore, a family would need to earn $54,537 more (than the poverty line) each year to reach a level of economic security," the authors of the study, Hilary Wething and Natalie Saba­dish, wrote in an email to the Star-Advertiser.

That translates to $6,485 a month for housing, food, child care, transportation, health care and other necessities and taxes.

Tammy Lopez, resident manager at Halawa View Apartments, said her family of four has a total household income of just over $78,000 and must live on a tight budget to stay afloat. That’s even with the free rent that comes as part of her job.

"In my situation I don’t have to pay rent, so I can’t imagine families that have to pay rent and are still making it," Lopez said. "I cannot afford to send my children to private school, and I’m going to have to depend on scholarships to get them into college. By no means am I living a luxurious life."

The highest monthly costs in Hono­lulu were housing, estimated at $1,314, child care at $1,315 and health care at $1,349. The share of a monthly budget a Hono­lulu family spends on housing is 20.3 percent, much higher than the U.S. median family budget of 14.4 percent, the authors noted. Child care costs are the most variable of the family budget components, ranging from $725 per month for families in Hono­lulu with one child to $1,905 for families with three children.

"It became obvious that the three main areas that make up the bulk of the costs for our families are housing, child care and health care," comprising between 55 percent and 60 percent of the total budget, said Grace Fong, interim director of the University of Hawaii Center on the Family. "That’s a major factor for any of the families."

"It is clear that even in the best of economic times, many parents in low-wage jobs will not earn enough through work to meet basic family needs," the authors said.

A full-time, full-year worker paid $7.25 per hour (the minimum wage) will earn about $15,080 a year before taxes, the study said.

"I can’t imagine how families would live on that," said Ivette Stern, Kids Count project director at the Center on the Family.

"When you have housing taking a huge part of the budget, that means there is less resources available for other things. Families may not necessarily have a lot of options in what type of child care they use, they may not be able to buy all the school supplies or enroll kids in extracurricular activities — all things that are healthy for their development."

The Center on the Family said the most recent 2011 data show that the economic situation of Hawaii families has gotten worse since the recession more than five years ago.

"Several years out of the recession, we still see the number of children that are in poverty increasing," Stern said. "Families are spending more than a third of their income on housing. We had a lot of families already living on the edge. We’re still seeing conditions getting worse. Families are still struggling to come out of that deep hole."

The study found the lowest-cost city was Marshall County, Miss. where a family of four would need an annual budget of $48,144. A family in the most expensive place, New York City, would need $93,502.

EPI’s Family Budget Calculator measures the income a family needs to attain a secure yet modest living standard by estimating community-specific costs of housing, food, child care, transportation, health care, other necessities and taxes. The budgets were calculated for 615 U.S. communities and six family types, either one or two parents with one, two or three children.

The full report, titled "What families need to get by," is available at www.epi.org/types/report.