Data on Peoria’s Cost of Living raises questions, ire

Despite Wall Street booming, inflation easing, prices improving, and joblessness falling, it still can seem like a financial struggle to make ends meet.

That may not be our imagination, according to new research.

Last month:

* the Dow Jones and the S&P set record levels, and the Nasdaq came within 0.4% of its all-time high,

* the labor market is strong and wages are up,

* in the Labor Department’s Consumer Price Index for Illinois, released in mid-February, gas prices fell 5.2%,

* utility prices were down 5.6% and

* dairy prices fell 1.2%.

 

However, such numbers reflect a big picture, and a new, comprehensive measurement of financial well-being reveals challenges at local levels, potential difficulties some tie to financial differences between the top and the rest of us.

The most recent Federal Reserve’s Survey of Consumer Finances (SCF) released in November showed “some increase in income inequality over this period.”

Released every three years, the SCF showed one of the largest three-year increases in income inequality in the survey’s modern history, worsening a trend that started in the early 1980s. The top 5% of earners in 1980 received about 16.5% of all income; now the top 5% gets 23.5%. Meanwhile, the bottom 40% in 1980 received about 14.4%, but now gets 6.4%.

Such a gap could present itself in what a household needs to have a modest but adequate standard living. In Peoria County, that’s shown in the Economic Policy Institute’s “Family Budget Calculator,” which breaks down what families in every U.S. county must have. A home with two adults and two kids requires $8,417/month, or $101,008, EPI shows.

In Peoria County, the break down is $912 (housing), $1,006 (food), $1,384 (child care), $1,454 (transportation), $1,857 (health care), $1,125 (taxes), and $679 (other necessities, such as clothes, personal-care items, furnishings, phone service and school supplies).

EPI’s more granular-level statistics come from detailed research such as the U.S. Department of Housing and Urban Development, the Department of Agriculture’s “Official USDA Food Plans: Cost of Food at Home at Four Levels,” the National Database of Childcare Prices, the Center for Neighborhood Technology’s Housing and Transportation Affordability Index, the Kaiser Family Foundation’s “2023 Health Insurance Marketplace Calculator” and the Department of Health and Human Services’ Medical Expenditure Panel Survey, and the National Bureau of Economic Research’s TAXSIM modeling program.

“There are many indicators of family/individual well-being,” said Dr. Joshua Lewer, Economics and Finance Department Chair at Bradley University and Acting Associate Dean for Future Initiatives. “These data could serve to supplement Cost of Living estimates.”

EPI’s Director of Data Management and Analysis told the Community Word that what sets EPI’s calculator apart is using contemporary resources instead of decades-old templates.

“The federal poverty line is based on a measure from the ’60s, which is largely unchanged aside from being updated for inflation. There is also no geographic variation,” said Zane Mokhiber. “The federal poverty line for a family of four is $30,000 for 2023, which is much lower than our budget estimates for every single county and metro area in the U.S.  The [Census Bureau’s] Supplemental Poverty Measure is a much better measure, as it takes geographic variation into account (among many other factors). However, it still underestimates what it takes to get by – no matter what part of the country you look at.”

Variations between counties exist, of course. In the Tri-County area, Tazewell County residents need $100,417/year, and in Woodford, it’s $107,401, the increase driven mainly by higher housing and transportation costs. Nearby, McLean County, with the Twin Cities and colleges, is comparable to Peoria, at $102,688, with slightly higher costs estimated for housing, transportation and health care, but a few predominantly rural counties have understandably lower costs: $91,951 in Bureau County, $91,643 in Knox, and $92,583 in Mason.

Other Illinois counties: Cook County residents need $106,066, EPI says; Winnebago (Rockford) is $94,784/year, and the Quad Cities metro area (encompassing Henry, Mercer and Rock Island Counties in Illinois, and Scott County in Iowa) requires $94,438.

Elsewhere, using population of a county’s major city as a gauge, two counties provide some comparisons to Peoria (population about 112,000): In Lafayette, La. Parish, where the city of Lafayette is about 122,000, residents need $95,091/year, with child care, health care and taxes lower than Peoria. In Montgomery County, Tenn., home of Clarksville (pop. 170,000), residents need $88,365/year, also with lower health care and taxes.

What’s difficult-to-impossible to determine is how public assistance influences social costs. For instance, if a substantial number of people use public transportation, rely on family for child care, or are eligible for Medicaid or subsidized housing, that may affect data on collective costs.

After digesting all the numbers and factors, maybe there are no good answers.

But at least there should be good questions.

 

The interactive link to EPI’s Family Budget Calculator is https://www.epi.org/resources/budget/