VT LEG #352468 v.3
Vermont Basic Needs Budgets
And Livable Wage
Prepared in accordance with
2 V.S.A. § 526
JANUARY 15, 2021
Prepared by the Vermont Legislative Joint Fiscal Office
Prepare for your exams
Study with the several resources on Docsity
Earn points to download
Earn points by helping other students or get them with a premium plan
Guidelines and tips
Prepare for your exams
Study with the several resources on Docsity
Earn points to download
Earn points by helping other students or get them with a premium plan
Community
Ask the community
Ask the community for help and clear up your study doubts
University Rankings
Discover the best universities in your country according to Docsity users
Free resources
Our save-the-student-ebooks!
Download our free guides on studying techniques, anxiety management strategies, and thesis advice from Docsity tutors
Vermont Livable Wage and Basic Needs Budgets for Different Family Types, Study notes of Statistics
The livable wage and basic needs budgets for various family types in Vermont for the year 2020. It includes expense estimates for food, housing, transportation, health care, child care, and other personal expenses for urban and rural areas. The document also calculates the percentage of income needed to meet these basic needs.
What you will learn
- How much does housing cost in Vermont for a family with two adults and two children (one wage earner)?
- What percentage of income is needed to meet basic needs in Vermont?
- What is the livable wage in Vermont for a single person in urban and rural areas?
- What are the monthly and annual expenses for a single parent with one child in Vermont?
- What are the expense estimates for food, transportation, and health care for a single person in Vermont?
Typology: Study notes
2021/2022
1 / 34
This page cannot be seen from the preview
Don't miss anything!
Related documents
Partial preview of the text
Download Vermont Livable Wage and Basic Needs Budgets for Different Family Types and more Study notes Statistics in PDF only on Docsity!
Vermont Basic Needs Budgets
And Livable Wage
Prepared in accordance with
2 V.S.A. § 526
JANUARY 15, 2021
Prepared by the Vermont Legislative Joint Fiscal Office
TABLE OF CONTENTS
- Part I Executive Summary
- Part II Changes from the Last Report
- Part III 2020 Vermont Livable Wage and Basic Needs Budgets
- Part IV Comparisons with Other Income Measures
- Part V Methodology and Sources
- Appendix A – Statute
- Appendix B – Comparison with Living Wage Calculators
Part I – Executive Summary
This is the 13 th edition of the Vermont Basic Needs Budgets and Livable Wage Report. A Basic Needs Budget is a market-based analysis that accounts for estimated monthly living expenses in Vermont. These basic needs budgets include the costs for essential items such as food, housing, transportation, child care, clothing and household expenses, telecommunications charges, health and dental care, renters insurance, life insurance, and savings. The budgets differ based on family size and whether the family lives in an urban or rural part of Vermont. This version of the study will include seven hypothetical family configurations: six that are consistent with the original families chosen in the 1999 report and an additional configuration (single person, shared housing) starting in the 2015 report. All configurations are as follows:
- Single Person
- Single Person, Shared Housing
- Single Parent with One Child
- Single Parent with Two Children
- Two Adults with No Children – both wage earners
- Two Adults with Two Children – one wage earner
- Two Adults with Two Children – both wage earners Tax obligations are then added to annual household expenses. Finally, hourly wage figures are calculated by dividing the total by a year of full-time work. Annual budgets and hourly wages are computed for each of the seven family profiles in both urban and rural Vermont, 14 budgets in total. Vermont Livable Wage Rate The Vermont Livable Wage is defined in statute as the hourly wage required for a full-time worker to pay for one-half of the basic needs budget for a two-person household with no children and employer-sponsored health insurance, averaged for both urban and rural areas. The 2020 Vermont Livable Wage is $13. 39 per hour.^1 The Livable Wage is different from the wage for a single person because it accounts for the economies achieved by multiple-person households. This figure does not, however, include all potential household expenses because it is for families without children. There are seven family configurations presented in this report to show the variation in livable wages for family types. The Basic Needs Budgets and Livable Wage methodology was originally established in 1999 as the result of the Legislative Livable Income Study Committee. Comprehensive improvements to the study methodology were recommended in 2008 by a Basic Needs Technical Advisory Committee. The Legislative Joint Fiscal Committee (JFC) has the authority to update the study methodology and adopted the Technical Advisory Committee’s recommendations. The Joint Fiscal Office strongly recommends that the General Assembly consider the appointment of another advisory committee to comprehensively review, and possibly recommend updates to the statute, methodology and available data prior to the release of the 2023 report. The purpose of the Basic Needs Budgets and Livable Wage calculation is to provide information for the public on what it costs to live in Vermont, based on certain assumptions. This is not meant to be a mandate, but another source of comparative data when considering wage levels in Vermont. (^1) The 2018 Vermont livable wage was $13.34 per hour.
[This page intentionally left blank]
[This page intentionally left blank]
Part III – 2020 Vermont Livable Wage
and Basic Needs Budgets
2020 Livable Wage = $1 3. 39 per hour
2020 Basic Needs Budget Wages^4 Family Type Urban Rural Single Person $ 18. 49 $15.7 2 Single Person, Shared Housing $14. 97 $12. 89 Single Parent, One Child $ 3 2.58 $ 2 6. Single Parent, Two Children $41.78 $33. Two Adults, No Children $14.02 $12. 76 Two Adults, Two Children (one wage earner)
Two Adults, Two Children (two wage earners)
(^3) This is the average of the urban and rural rate for Two Adults with No Children. The 2018 livable wage was $13.34. (^4) All hourly wages given are per wage earner.
2020 Vermont Basic Needs Budget
Single Person, Shared Housing
Urban Rural Category Cost estimates are per month Cost estimates are per month Food (^336 ) Housing (^814 ) Transportation (^458 ) Health Care (^147 ) Dental Care (^4 ) Child Care (^0 ) Clothing & Household Expenses (^101 ) Personal Expenses (^94 ) Telecommunications (^93 ) Rental Insurance (^19 ) Term Life Insurance (^0 ) Savings (^103 ) Total Monthly Expenses 2,1 68 1,89 0 Annual Expenses 26,017 22, 682 Federal & State Taxes 5,1 23 4, 127 Annual Income 31,140 26, 809 Hourly "Livable" Wage $14. 97 $12. 89 Average Wage PER Earner Tax Calculations 2020 Tax Year – Single Filer AGI 31,140^ 26,^809 Standard Deduction (^) ( 12 , 4 00) (12, 400 ) Taxable Income 18, 740 14, 409 Federal Tax (before credits) 2,0^53 1,^533 Child Credit - - Dependent Care Credit (^) - - Net Federal Tax 2,0 53 1, 533 VT Standard Deduction (6,^25 0)^ (6,^25 0) VT Personal Exemption (4,^3 50)^ (4,^3 50) VT Taxable Income 20,^540 16,^209 State Tax (before credits) 688 543 Dependent Care Credit (^) - - Renter Rebate - - Net State Tax 688 543 FICA/Medicare (^) 2,3 82 2,0 51 Total 5,12 3 4, 127
2020 Vermont Basic Needs Budget
Single Parent, One Child
Urban Rural Category Cost estimates are per month Cost estimates are per month Food (^514 ) Housing (^) 1, 628 970 Transportation (^483 ) Health Care (^318 ) Dental Care (^23 ) Child Care (^) 1,088 912 Clothing & Household Expenses (^233 ) Personal Expenses (^142 ) Telecommunications (^117 ) Rental Insurance (^19 ) Term Life Insurance (^42 ) Savings (^230 ) Total Monthly Expenses 4, 837 4, Annual Expenses 5 8,045 48, Federal & State Taxes 9,714 6, 774 Annual Income 67 ,759 5 4, Hourly "Livable" Wage $32.58 $ 2 6. Average Wage PER Earner Tax Calculations 2020 Tax Year – Head of Household AGI 67,759^ 54, Standard Deduction (^) ( 18 , 65 0) ( 18 , 650 ) Taxable Income 49,109 36, Federal Tax (before credits) 5,^611 4, Child Credit (2,000) (2,000) Dependent Care Credit (^) (600) (600) Net Federal Tax 3, 011 1, 477 VT Standard Deduction (^9 ,^4 00)^ (^9 ,^4 00) VT Personal Exemption (8,^700 )^ (8,^700 ) VT Taxable Income 49,659^3 6, State Tax (before credits) 1, 664 1, 235 Dependent Care Credit (^) (144) (144) Renter Rebate - - Net State Tax 1,^520 1,0^91 FICA/Medicare (^) 5,184 4, Total 9,714 6, 774
2020 Vermont Basic Needs Budget
Two Adults, No Children (both wage earners)
Urban Rural Category Cost estimates are per month Cost estimates are per month Food (^670 ) Housing (^) 1, 265 791 Transportation (^917) 1,0 69 Health Care (^345 ) Dental Care (^23 ) Child Care (^0 ) Clothing & Household Expenses (^237 ) Personal Expenses (^189 ) Telecommunications (^185 ) Rental Insurance (^19 ) Term Life Insurance (^39 ) Savings (^194 ) Total Monthly Expenses 4,0 83 3, 745 Annual Expenses 48, 992 44, 938 Federal & State Taxes 9, 334 8, 123 Annual Income 58, 325 53, Hourly "Livable" Wage $28.04 $25. 51 Average Wage PER Earner $14.02 $12. 76 2020 VT Livable Wage $13. 39 Tax Calculations 2020 Tax Year – Married Filing Jointly AGI 58, 325 53, Standard Deduction ( 24 , 8 00) ( 24 , 8 00) Taxable Income 33,525 28, 261 Federal Tax (before credits) 3, 628 2, Child Credit (^) - - Dependent Care Credit (^) - - Net Federal Tax 3, 628 2, VT Standard Deduction (12, 5 00) (12, 5 00) VT Personal Exemption(s) (8, 7 00) (8, 7 00) VT Taxable Income 37, 125 31, State Tax (before credits) 1, 244 1, 067 Dependent Care Credit (^) - - Renter Rebate (^) - - Net State Tax 1, 244 1, 067 FICA/Medicare (^) 4, 462 4, 059 Total 9, 334 8, 123
2020 Vermont Basic Needs Budget
Two Adults, Two Children (one wage earner)
Urban Rural Category Cost estimates are per month Cost estimates are per month Food (^) 1,0 52 1,0 52 Housing (^) 1, 628 970 Transportation (^928) 1, 033 Health Care (^540 ) Dental Care (^68 ) Child Care (^0 ) Clothing & Household Expenses (^297 ) Personal Expenses (^283 ) Telecommunications (^185 ) Rental Insurance (^19 ) Term Life Insurance (^45 ) Savings (^252 ) Total Monthly Expenses 5, 298 4,7 17 Annual Expenses 63,580 56, Federal & State Taxes 8,118 6, 036 Annual Income 71,698 62, Hourly "Livable" Wage $34.47 $30. 12 Average Wage PER Earner Tax Calculations 2020 Tax Year – Married Filing Jointly AGI 71,698^ 62, Standard Deduction (^) (24, 800 ) (24, 800 ) Taxable Income 46,898 37, Federal Tax (before credits) 5,233^ 4, Child Credit (4,000) (4,000) Dependent Care Credit (^) - - Net Federal Tax 1,233 146 VT Standard Deduction (12,^5 00)^ (12,^5 00) VT Personal Exemption (17,400)^ (17,400) VT Taxable Income 41,798^ 32, State Tax (before credits) 1, 400 1, 097 Dependent Care Credit (^) - - Renter Rebate - - Net State Tax 1,^400 1,^097 FICA/Medicare (^) 5, 485 4, 792 Total 8,118 6, 036
[This page intentionally left blank]
Part IV – Comparisons with Other Income Measures
The Vermont Basic Needs Budgets is one type of income benchmark. To put the Basic Needs Budgets and the Livable Wage measures in context, it is helpful to compare them with two other well-known income thresholds, the federal poverty guidelines and minimum wage rates. Federal Poverty Guidelines The federal poverty guidelines are a version of the federal poverty measure developed in the 1960s. These figures are issued each year in the Federal Register by the Department of Health and Human Services (HHS). The guidelines are a simplification of the poverty thresholds used for administrative purposes. Many government programs, both federal and state, determine eligibility using these guidelines. Often programs use a multiple of the federal poverty level to measure need because it is generally recognized that many families with incomes above these guidelines lack sufficient resources to meet basic needs. The 2018 Vermont livable wage exceeds 300% of the federal poverty level. All 2018 Vermont basic needs budgets, except for the rural single adult, shared housing, exceed the 300% threshold. 2020 Health and Human Services (HHS) Federal Poverty Guidelines (48 Contiguous States and Washington D.C.) Yearly Rates with Percentage Multiples Size of Family Unit 100% 125 % 150% 175% 200% 250 % 300 % 4 00% 1 12,760 15,950 19,140 22,330 25,520 31,900 38,280 51, 2 17,240 21,550 25,860 30,170 34,480 43,100 51,720 68, 3 21,720 27,150 32,580 38,010 43,440 5 4,300 65,160 86, 4 26,200 32,750 39,300 45,850 52,400 65,500 78,600 104, 5 30,680 38,350 46,020 53,690 61,360 76,700 92,040 122, 6 35,160 43,950 52,740 61,530 70,320 87,900 105,480 140, 7 39,640 49,550 59,460 69,370 79,280 99,100 118,920 15 8, 8 44,120 55,150 66,180 77,210 88,240 110,300 132,360 176, Each Add’l Person: 4,480 5,600 6,720 7,840 8,960 11,200 13,440 17, SOURCE : https://aspe.hhs.gov/poverty-guidelines Minimum Wage The minimum wage was established in 1938 as part of the Fair Labor Standards Act. Minimum wage increases are passed at the will of Congress and generally have not kept pace with inflation. The federal minimum wage is currently $7.25 per hour effective July 24, 2009. States also mandate minimum wage rates, and employees in Vermont are entitled to the higher of the two minimum wages. The Vermont minimum wage was $ 10. 96 as of January 1, 2020. On January 1, 20 21 , it increased to $11.75 and on January 1, 2022 , it will increase to $12.55. Each year thereafter, the minimum wage rate will increase by the lesser of: 1) 5% or 2) the percentage increase of the Consumer Price Index, CPI-U, U.S. city average, not seasonally adjusted. The 20 20 Vermont livable wage, as well as all basic needs budgets, exceeds the 20 20 Vermont minimum wage.
Single Parent with One Child (Rural) Expense Monthly Annual % of Budget Food (^514) 6,167 11.2% Housing (including utilities) (^970) 11,645 21.2% Transportation (^536) 6,429 11.7% Child Care (^912) 10,944 19.9% Personal & Household Expenses (^492) 5,906 10.7% Health & Dental Care (^341) 4,092 7.4% Insurance & Savings (^251) 3,017 5.5% Expense Budget 4,017 48,200 87.7% Taxes 564 6,774 12.3% Overall Budget 4,581 54, Percentage of Income Needed to Meet Basic Needs in Vermont Vermont Basic Needs Income Compared to Other Benchmarks Food 11% Housing (including utilities) 21% Transportation 12% Child Care 20% Personal & Household Expenses 11% Health & Dental Care 7% Insurance & Savings 6% Taxes 12% $17,
Federal Poverty
Level (2020)
Full-Time at VT
Minimum Wage
2020 Basic Needs
Budget, Rural
VT Median Family
Income (2-person)
2019 adj.
Annual Income ($)
Two Working Parents with Two Children (Rural) Expense Monthly Annual % of Budget Food (^1052) 12,629 14.8% Housing (including utilities) (^970) 11,645 13.6% Transportation (^1033) 12,393 14.5% Child Care (^1486) 17,832 20.9% Personal & Household Expenses (^777) 9,328 10.9% Health & Dental Care (^608) 7,296 8.5% Insurance & Savings (^378) 4,535 5.3% Expense Budget 6,305 75,659 88.5% Taxes 816 9,793 11.5% Overall Budget 7,121 85, Percentage of Income Needed to Meet Basic Needs in Vermont Vermont Basic Needs Income Compared to Other Benchmarks Food 15% Housing (including utilities) 14% Transportation 14% Child Care 21% Personal & Household Expenses 11% Health & Dental Care 9% Insurance & Savings 5% Taxes 11% $26,
Federal Poverty Level (2020) Full-Time at VT Minimum Wage (2020) 2020 Basic Needs Budget, Rural VT Median Family Income (4-person) 2019 adj. Annual Income ($)