County cost of living at almost $90k

By Dawn Hodson

A recent study by the Economic Policy Institute estimates it takes $88,669 annually or $7,389 monthly for a family of four (two adults, two children) to live in El Dorado County.

The estimated amounts are all in 2017 dollars.

The biggest expense is for transportation at $16,116 including the cost of auto ownership and use and/or transit use.

The next biggest expense is health care at $12,953 including insurance premiums and out-of-pocket costs and assumes families purchase the lowest cost bronze plans on the health insurance exchange established under the Affordable Care Act.

Housing comes in third at $12,805 based on the Department of Housing and Urban Development’s fair market rents, which represent rental costs (shelter rent plus utilities) at the 40th percentile in a given area for privately owned, structurally safe, and sanitary rental housing of a modest nature with suitable amenities.

Food was the fourth biggest expense at $12,750 based on the U.S. Department of Agriculture’s national “low-cost” food plan and adjusted to each area using multipliers from Feeding America’s Map the Meal Gap data. The low-cost plan is the second-least-expensive of the four Official USDA Food Plans and assumes almost all food is bought at the grocery store and then prepared at home. The USDA food plans represent the amount families need to spend to achieve nutritionally adequate diets.

The next biggest expense is child care at $12,480. That estimate is based on the cost of center-based child care and family-based care for 4-year-olds and school-age children as reported by the Child Care Aware of America.  For one-child families, the assumption is the child is 4 years old. For families with more than one child, the assumption the additional children are ages 8, 12, and 16, respectively.

Taxes come in next at $11,255 and are calculated from the National Bureau of Economic Research’s Internet TAXSIM, an online tool that calculates information on federal personal income taxes, state income taxes and federal Social Security and Medicare payroll taxes.

The last big expense is other necessities at $10,310 which includes apparel, personal care, household supplies (which include items ranging from furnishings to cleaning supplies to phone service), reading materials, and school supplies. The costs for these items come from the Bureau of Labor Statistics Consumer Expenditure Survey and use data reported for households in the second (from the bottom) fifth of households in the household income distribution.

County comparisons

However, when comparing different areas in California, El Dorado County is not the most or least expensive area to call home. Among the 58 counties in the state, San Mateo County has the highest cost of living at $156,292. The least expensive area is Merced County at $70,675.

When it comes to incomes, in 2016 the median family income for California was $77,359. (Data for 2017 won’t be released until later this fall.)

In the Sacramento Metropolitan area, which includes El Dorado County, in 2016 the median income was $64,052.

On the high-end of incomes was the San Jose, Sunnyvale, Santa Clara Metropolitan areas where the median income in 2016 was $110,040. On the low-end was the Chico area where the median income was $45,177.

Unfortunately wage growth has not kept up with the cost of living. According to the Economic Policy Institute, “productivity has grown about 75 percent since 1973, while the compensation of the typical worker has grown only about 12 percent.

“Since 1979, the hourly median wage has grown less than 10 percent in real dollars, or an average annual raise of barely 4 cents.”