THE

PILLARS

HIGH COSTS OF LIVING

The citizens of Los Angeles County and most of California are no strangers to the high costs of living. Throughout the county, citizens need a substantial amount of money in order to obtain a minimum standard of living. In most comparisons, cost of living is determined by how costly it is to reside in one city versus another. Here, we will be analyzing vital expenses and remaining take-home pay.

The first diagram provides an 8-year overview of average monthly income in Los Angeles County alongside the average monthly costs of the top four vital expenses.

8-Year Change in Income vs. Vital Expenses

MONTHLY INCOME

Monthly income considered here is the average take home amount after deduction of all federal and state taxes.

TRANSPORTATION

Transportation includes vehicle payment, car insurance, and gasoline.

RENT

Rent includes the average 1-bedroom monthly rent plus the average monthly cost of renter's insurance.

HEALTH/WELLNESS

The combination of health and wellness includes medical insurance, food, and groceries.

UTILITIES

While utility situations may vary by household, this most often includes electricity, water, natural gas, sewage, and garbage pickup.

REMAINING

This includes remaining funds after all vital expenses for the month have been paid.

The cost of rent tops the charts as ultimately the leading cause of homelessness. Studies have shown that while many of the homeless have full time jobs, own cars, have phones, and can afford health care and wellness services, they live on the streets or in their vehicles due to the exorbitant cost of rent and the impossibility of purchasing a house. Costs of most vital expenses in Los Angeles sit well above the US average but rent expenses soar far higher than minimum wage and most low-paid workers can afford.

The second diagram is the 8-year change in average annual income across Los Angeles County. $31,200 annually is equivalent to an earning of $15 per hour full time, the current minimum wage in California.

8-Year Change in Average Annual Income

When considering this information, there are three options.

 

 Raising the minimum wage.

In California, the minimum wage is $15 per hour, equivalent to $31,200 per year full time; $2,600 monthly. Raising this is an ongoing discussion but $15 hourly is certainly not livable. The average rent is $2,426 in 2019, leaving $174 at month's end. An overall maximum living wage of $31,200 annually is not sustainable for an independent citizen in Los Angeles.

Lowering the average cost of rent.

Rent is a huge burden on thousands of Los Angeles citizens. While many are able to afford the high rent expenditure, many simply cannot make this work and are forced to live homeless. This can be mended - there needs to limits on how high rents can rise and incentives need to be provided to property owners who are willing to lower rent for low-income citizens.

Developing more affordable housing.

With the growing population of low-income individuals and families in Los Angeles, more affordable housing needs to be available. Low income housing is presently available but it's not nearly enough.

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