Should City Government Report New York’s True Cost of Living?
Three proposed changes to the City Charter intended to address structural racism and persistent inequality, brought by New York City’s Racial Justice Commission, are on the ballot this November. We zero in on one of them, requiring adoption of a “true cost of living” measure, with the commission’s chair, who is also the CEO of the major social services non-profit FPWA.
Urban Matters: Let's start with some basics. What does the Racial Justice Commission mean by a ‘true cost of living’ for New Yorkers -- and why is this a matter of racial justice?
Jennifer Jones Austin: The commission means to identify the actual income needed in New York City to meet essential needs including, but not limited to, housing, food, childcare, transportation, and other necessary costs, and without considering public, private, or informal assistance – in other words, what it costs for families today to make ends meet. Unless you truly understand what it costs to live and thrive, you cannot effectively measure who does not have the adequate resources to do so.
This is a matter of racial justice because you cannot address or hope to eliminate poverty in America if you do not appreciate the inextricable link of poverty with race in America, or the disproportionate impact poverty and its corollaries have on persons and communities of color.
UM: Eligibility for many benefits, like Medicaid and the Supplemental Nutritional Assistance Program (SNAP), is pegged to what's called the Federal Poverty Level. The commission’s report finds it inadequate and out of date. Why?
JJA: The Federal Poverty Level measures what it costs for a family to buy basic nutritional needs, as measured in the 1960s and subsequently adjusted for inflation. That is all it measures. It does not consider shelter costs, utilities, healthcare costs, childcare costs, taxes, or any of the other myriad things on which households need to spend money. It is widely acknowledged to be a woefully unrealistic tool for assessing the means and needs of individuals and families with low incomes today. Further, it’s not location-adjusted. It is the same for a family living in New York City as for someone living in a rural county Upstate or in Nebraska or anywhere else in the country. For example, the poverty guideline for a family of four in 2022 is just $27,750 annually, across all 48 contiguous states.
The FPL not only undercounts poverty but also drastically limits eligibility for benefits programs. The result is that countless New Yorkers struggling day to day to make ends meet are deemed ineligible because they are considered ‘not poor enough.’
UM: Let’s go back to your point about not counting public benefits or other assistance as income. Why not? Don't things like housing vouchers or subsidized child care or reduced transit fares help New Yorkers meet true costs of living?
JJA: They may help in the short term, but no one should have to rely on these benefits to get by. Income and wages should be sufficient to cover the costs of caring for oneself or one’s family without supports, and the trauma that sometimes comes along with their utilization.
Measuring the true cost of living (TCOL) entails creating a more realistic picture of the cost of a decent standard of living beyond mere survival. We wanted to create a benchmark rooted in an equitable assessment of the resources required to live with dignity. It should be used to evaluate the extent to which wages and benefits are – or are not – measuring up. It should be used as a guide to inform policymakers and urge, not just our city but also the nation, to enact transformative changes to institutions, such as our benefits system, that have for too long relied on unjustly low measures of what people ‘deserve.’
Income supports are critical components of a thriving society, but, when possible, they should be temporary and do what they purport to do – actually help people get back on their feet as opposed to locking them in a cycle of spending down and ‘benefits cliffs.’ The true cost of living should measure the costs of living in New York, not necessarily the various ways people meet those costs. Only by creating this baseline will we adequately be able to measure what are the correct levels for setting eligibility requirements for the various income supports so many New Yorkers rely on.
UM: But the way the proposed Charter change is written, the true cost of living would be reported in addition to the standards setting benefits eligibility, but wouldn't replace them. So, what effect would it really have? What would keep it from being just another government report that gets published and then ignored?
JJA: It would result in an accurate count of how many people are unable to meet basic needs, and can help shape the conversations about wages, income supports, and other benefits that can truly help close the gap between where New Yorkers are and where they need to be to reach economic security. It could be used as an effective tool towards more fair wages and to inform the design and eligibility of poverty alleviation programs, as well as benchmarking the programs’ extent and effectiveness.
Even farther-reaching, a TCOL measure would also be a first step towards building a fair, inclusive, and equitable recovery from the pandemic and beyond. Without a comprehensive measure of what it costs to live with dignity in our city, how can we expect to affect sustainable change? What we do know is that that in the Bronx, for a family of four, you need about $85,507 a year to cover costs, but from 2016 to 2020 the average median household income was only $41,895 – far below what we know it takes to make ends meet.
UM: Final question: If this measure passes, every year starting in March 2024 the City would publish an updated true cost of living estimate. What do you think that will reveal?
JJA: First, it would reveal and document how costly it is to live in our city. It would allow all New Yorkers, both those who feel economically secure, and those who do not, to reflect on what it truly costs to thrive. Additionally, it would more accurately reflect how many of our neighbors face economic hardship, and it would show that economic insecurity affects a broad swath of New Yorkers, irrespective of employment status or the receipt of public benefits.
Publishing an updated TCOL measure every year will empower New Yorkers to achieve social well-being and economic security. By reporting on an updated measure annually, New York City will be paving the way for the rest of the nation to hold ourselves to a standard of accuracy and transparency in all things, starting with the measure of poverty.
On November 8th, registered voters will have the opportunity to vote on ballot measures that would lay the foundation for all New Yorkers to have equity in power, access, and opportunity. Each proposal would have a long-lasting impact on the way New Yorkers live and work, and the third ballot measure speaks explicitly to the issue of TCL measurement.
Jennifer Jones Austin is the chair of the New York City Racial Justice Commission and CEO of FPWA.
Photo by: Wikimedia
