Wednesday, May 25, 2016

Low-income Americans can no longer afford rent, food, and transportation

Updated by Soo Oh on March 30, 2016

A new Pew Charitable Trusts analysis of data from the Bureau of Labor Statistics shows that in 2013, low-income Americans spent a median of $6,897 on housing. In 2014, that rose to $9,178 — the biggest jump in housing spending for the 19-year period of data that Pew studied.

The cost of other necessities, like transportation and food, also rose, albeit not as dramatically.


"We show in these figures that over time, [lower-income groups] consistently spend more on transportation and considerably more on housing," [relative to income] Erin Currier, the project director at Pew Charitable Trusts, said. "Lower-income renters are spending nearly half their income on rent, while upper-income groups spend about 15 percent on rent. The disparity really shows that lower income families don’t have much slack in their budgets for mobility-enhancing investments like savings and wealth building."


The rise in housing costs was particularly drastic for low-income Americans. For middle and high earners, the increase was noticeable but smaller, about 6 to 9 percent in 2014. Their budgets also had a lot more slack; basic necessities didn't even come close to consuming nearly half their income.


The average upper-income household spent nearly three times as much a month on entertainment spending as its lower-income counterpart.


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