How Family Finances Are Being Squeezed

Costs are rising faster than incomes for the typical Washington family

Higher costs for rent or home ownership, health care, child care and higher education have far outpaced the (very) modest increases in a typical family’s income over the past decade.

Housing

Housing has become far less affordable in Washington, as median rental costs and home prices continue to exceed increases in median family income. After inflation, median monthly rent in Washington has climbed 33 percent ($330/month) since 2007 – from 14.7 percent ($1005/month) to 18.0 percent ($1335/month) of median family income.

Among Washington’s 5 most populous counties, median rent climbed: 48 percent ($552/month) in King, 37% ($365/month) in Clark, 36% ($405/month) in Snohomish, 28% ($286/month) in Pierce, and 15% ($123/month) in Spokane.[17]

Tableau

Would-be homebuyers aren’t finding it easy, either. The usual definition of an “affordable” mortgage is one that is about 2.6 times total income. But that threshold is far out of reach for most middle-income families.

Even at the depths of the Great Recession, the median (typical) house in Washington was priced at 3.3 times median family income — and prices have climbed dramatically since: today, the median cost of a house is 4.1 times more than median family income.

There are local differences, but the upward trend is consistent. In 2005, a prospective home buyer in Spokane County would have found median prices were 2.8 times median family income; today, median prices are 3.4 times that amount. In King County, median home prices are now 5.6 times, and in Snohomish County 4.7 times, higher than the local median family income. [18]

Tableau

Transportation

As affordable housing has become more expensive in urban areas, more people have been forced to live further from work, and face the higher time and money costs of a longer commute. The number of Washingtonians with a commute over 45 minutes increased 38.6 percent between 2006 and 2018 – while the number with a commute of less than 15 minutes decreased by 1.8 percent.[19]

Change in Number of Total Commuters by Average Commute Time, Washington, 2006-2018

0-15
minutes
15-29
minutes
30-44
minutes
45+
minutes

Total
Percent Change -1.8% +13.4% +20.4% +38.56 +14.3%
Numeric Change -14,697 137,347 116,043 165,046 +403,739

Source: American Community Survey 1-year estimates, Travel Time To Work For Workplace Geography

Child Care

High quality, affordable child care is critical for working parents earning a living. In a two-parent household, only a fraction of Washington’s jobs pay enough for one parent to support an entire family – and for single working parents, child care is the only way to hold down a full-time job. It is just as important to an unemployed parent, as it provides time to attend school or get job training, or look for work. Employers rely on it as well – without child care, much of the labor market would dry up.

But despite its importance to Washington’s economy, families and communities, child care is growing less affordable. Average monthly costs for all ages of child care are taking up an increasing share of a typical family’s income.[20]

Tableau

Health Care

Economic, family and community health all depend on having access to affordable health care. Timely medical care reduces costs for workers and families, improves health outcomes and productivity, and reduces fiscal burdens and the risk of bankruptcy.

As the federal Affordable Care Act and related state legislation have come into full effect, the number of uninsured Washington residents has declined by 49 percent: 532,500 fewer people were uninsured in 2017 than in 2009. However, costs related to health insurance (deductibles, copayments and coinsurance) are rising.

Tableau
Tableau

Higher Education

Washington’s 34 community and technical colleges and 6 universities collectively serve an estimated 240,000 full-time equivalent students.[21] Baby Boomers were able to work a summer minimum-wage job to pay for their tuition. However, in the 1980s, legislators began steadily cutting state investment in higher education. Today, the cost of a degree from one of Washington’s public colleges or universities often requires loan amounts that cause the state’s young people to postpone marriage, homeownership, children, and the American Dream.

Tableau

Footnotes

[17] Sources: Median Family Income: American Community Survey 1-year estimates (Table S1903); Rent: American Community Survey 1-year estimates (Table GTC2514).

[18] Sources: Median Family Income: American Community Survey 1-year estimates (Table S1903); Home prices: Runstand Department of Real Estate, University of Washington. Except for Housing (own), inflation adjusted using CPI-U-RS.

[19] 2017 and 2006 American Community Survey 1-Year Estimates, Travel Time to Work for Workplace Geography (B08603)

[20] Kids Count Data Center, costs for Licensed Care Center and Family Child Care Home, and American Community Survey, Median Income in the Past 12 Months (S1903). Inflation-adjusted using CPI-U-RS.

[21] EOI estimate based on actual enrollments to date, “Higher Education FTE Student Enrollment History by Academic Year”, accessed 6/27/18: http://fiscal.wa.gov/Workloads.pdf.

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