Roughly a third of Santa Cruz County households are struggling to afford basic needs, according to a new study released Wednesday that estimates the “real cost” of living in California.
The study, spearheaded by United Ways of California, is titled “How Much It Costs to Struggle: The Real Cost Measure in California 2023,” and is in part a response to the official poverty measure that the federal government uses. The study established a “real cost measure,” which factors in nuances missing from the official poverty measure like costs of housing, food, health care and child care. United Way creates a new edition every other year.
“The official poverty measure looked at the cost of food, because that was one of the biggest housing expenses for many families during the 1950s and 60s,” when the federal government developed the official poverty measure, said Henry Gascon, director of policy and program development for United Ways of California. “It’s based on the cost of food and nothing else primarily. It’s 2023 and we still haven’t done anything about that.”
Although real cost measures varied from region to region, one thing stayed consistent: The official poverty measure underestimates the number of people living in poverty or on the brink of it.
In Santa Cruz County, the study found that about 33% of the 80,000 working households are living below the “real cost measure.” That comes out to about 26,000 households. The study also determined that a family of two adults, one preschooler and one school-aged child would need to make about $117,000 annually to make ends meet in Santa Cruz County. The U.S. Census Bureau estimated the county’s median household income as $96,093 in 2021.
“And this is just the bare-bones minimum,” said Gascon. “So the official poverty measure doesn’t really mean much anymore, right?”
Gascon also explained that many retail and agricultural workers are either seasonal employees or do not have consistent hours throughout the year, making saving more difficult and further complicating the climb to meet the real cost measure.
Other findings were equally concerning. The study shows that 96% of struggling households in the county have at least one working adult. “These are not people looking to take advantage of the public benefit system,” said Gascon.
According to the study, 58% of Latino households in the county — about 10,000 households — live below the real cost measure, compared to 25% of white households. Roughly 45% of households with children age 5 and under also live below the real cost measure, along with 60% of single-mother households. Given how expensive housing is in Santa Cruz County, the study also determined that about 40% of households in Santa Cruz County spend at least 30% of their income on housing.
Following Gascon’s presentation, a panel of local officials discussed the findings and potential paths to tackling the problem. About 70 community members and local officials gathered at the Watsonville Civic Plaza for the event. Panelists included Santa Cruz Community Ventures Executive Director Maria Cadenas, Second Harvest Food Bank Santa Cruz County CEO Erica Padilla-Chavez, Community Action Board of Santa Cruz County Executive Director MariaElena de la Garza, Watsonville Community Hospital CEO Stephen Gray, Housing Santa Cruz County Executive Director Elaine Johnson and Santa Cruz County Office of Education Childhood Advisory Council community organizer Diane Munoz.
De la Garza said that even the much more robust real cost measure isn’t able to take into account every financial situation in the area, particularly in the Pajaro Valley and unincorporated parts of the county.
“We know that, through our Community Action Plan process, some families reported making $5,000 in annual income last year,” she said. “We have built relationships with the most vulnerable, who talk to us about their reality due to COVID, fires and floods.”
Cadenas added that society’s economic structure, which she likened to “a game of Monopoly,” is difficult to factor in, too. She noted that the wealth gap is increasing, and just a few families have owned most of the land in Santa Cruz County’s history.
“This is really critical and knowing information, but the reality is that we’re looking at discussion that is beyond the income of the household and cost of living, but at the systems that we have instituted and supported,” she said.
Gray explained how health care is even more expensive in the county than one might think.
“Nobody really knows what they spend on health care. We just say, ‘I don’t know, maybe $1,000?’ But all of the regions are actually at about $10,000,” he said.
In a post-panel interview, Gray told Lookout that because Watsonville Community Hospital is now under a health care district, it can expand its services more than it previously could through community partners and specialty clinics, touching on many aspects of the cost of living problem beyond just direct care.
“Primary care, preventive care, food pantries and working with the housing commission are all things we can get out into the community as part of the health care industry,” he said. “We can continue to expand that to provide better health care access and preventive care so they don’t have to come to the emergency department.”
How else can the county approach the cost of living problem? Housing Santa Cruz County’s Johnson said the community needs to build housing, of course. The county’s Regional Housing Needs Allocation (RHNA), which is set by the state, calls for nearly 13,000 housing units by 2031. Johnson said that it’s important that Santa Cruz County changes its zoning design to make it less restrictive.
“Some of that zoning was designed to keep people out rather than bring people in,” she said, adding that a number of bills that could bring in billions of dollars of housing in the state will appear on the November ballot. “It’s absolutely critical that they pass because it’s going to be one of our biggest answers to the housing crisis.”
And Munoz said it’s vital that the state expands financial support for child care services, which includes increasing the number of slots for children and raising wages for the child care workforce. She added that child care facilities in the new housing developments are important, too, given the scarcity and costliness of such services locally.
But more than anything, Cadenas said she believes that the data and possible solutions point to the fact that a system change is in order.
“These systems were created predominantly by white, affluent men. They were not created by women for women, they were not created by immigrants for immigrants, or by working-class people for working-class people,” she said. “The system is behaving exactly as it was assigned to behave.”
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