About the New York City True Cost of Living

This is the seventh time the New York City True Cost of Living (formerly the New York City SelfSufficiency Standard) has been calculated. The previous calculations were done in 2000, 2004, 2010, 2014, 2018, and 2021. Due to the considerable variation in cost of living across the region, the TCL is calculated for seven geographic areas in New York City, dividing the five boroughs as follows: the Bronx, Northwest Brooklyn, Brooklyn (excluding Northwest), North Manhattan, South Manhattan, Queens, and Staten Island.

The New York City True Cost of Living is a measure of the cost of all basic needs, in a given place, for over 700 different family types without any public or private assistance. The True Cost of Living benchmark is a set of basic needs budgets.15 For example, the food budget contains no restaurant or take-out food, even though Americans spend an average of 44% of their food budget on take-out and restaurant food.16 Likewise, it does not include costs for socialization activities, like recreation, vacations, or entertainment expenses. While not included in the TCL basic needs budget, socialization activities are important factors in improving mental health. The TCL does not include retirement savings, education expenses, or debt repayment, nor does the TCL address “assetbuilding” strategies. The Census documents that over 55% of Americans hold unsecured debt, including credit card, student loans, and medical debt which can have high, burdensome interest rates.17

While the TCL does not include public assistance, this exclusion does not imply that households should not rely on critical supports. As shown by the data in this report, due to structural inequities that maintain the cycle of poverty, many families struggle to make ends meet on earnings alone. Work supports (subsidies or assistance) help families achieve economic stability, so that they do not need to short-change their basic needs, such as scrimping on nutrition, living in overcrowded or substandard housing, or leaving children in unsafe or non-stimulating environments (see “The Importance of Work Supports” on page 39 section for more information).

*2014 was the first year that Brooklyn was calculated for two areas, so the general Brooklyn TCL is used for the percent change over time. **U.S. Census Bureau, American Community Survey (ACS). 2000, 2004, 2008, 2010, 2014, 2018, 2019, 2021. Detailed Tables. B20002. Median earnings in the past 12 months by sex for the population 16 years and over with earnings in the past 12 months. Retrieved from data.census. gov. 2021 data is the latest available and is updated using the Employment Cost Index.

Table 1 details how the annual wage needed for two adults, one preschooler, and one school-age child in all five boroughs of New York City has changed over the last 23 years. The rise in TCL wages since 2000 is attributed to a rise in costs for all basic needs, with housing, transportation, and food costs increasing at the highest rates. Housing, in particular, has dramatically increased since the last time the TCL was calculated in 2021. For example, for a family of two adults with a preschooler and school-age child, the cost of housing increased by 19% in Queens in just two years. Child care costs have also increased drastically since 2021, with the same family experiencing a 22% increase in the cost of child care. In contrast, over the same period of time, median earnings have only increased by nine percentage points, leaving a large gap in a family’s ability to cover rapidly increasing costs.

This gap is further illustrated in Figure A which compares the NYC True Cost of Living for Queens, the Bronx, and Kings County (Northwest Brooklyn) (see notes) with New York City median earnings and the federal poverty guidelines. The federal poverty guidelines have increased by 76% since 2000, while median earnings have increased by only 71% in the same period. However, costs have seen a far more dramatic increase with the TCL reflecting a 188% increase in Northwest Brooklyn (see note below Figure A about the method for calculating Brooklyn from 2000 to 2014), a 125% increase in Queens, and a 123% increase in the Bronx.

Understanding the patterns in cost increases, particularly in the last two years, provides context to understanding the True Cost of Living that is benchmarked with household income in the 2021 American Community Survey. The data analyzed in this report, utilizing the 2021 American Community Survey 1-year dataset and the 2023 NYC True Cost of Living, reveals that half of all working-age households (see “Limitations” on page viii) are struggling with basic costs of living. Situating this data with historical findings shows a dramatic 14 percentage point increase since the 2021 Overlooked and Undercounted report. This massive jump in the income inadequacy rate warrants additional analysis. Holding costs the same (instead of using the 2023 True Cost of Living, we utilize the 2021 True Cost of Living used in the previous report), we still calculate that a 41% income inadequacy rate, indicating that nine out of the fourteen percentage point increase in households struggling to make ends meet can likely be explained by increasing costs. Table 2 documents the percentage of households below the True Cost of Living by borough. Household earnings are not keeping pace with growing costs across the city, but this is particularly acute in North Manhattan (Morningside Heights/Hamilton Heights, Central Harlem, East Harlem, and Washington Heights/Inwood) where the percentage of struggling households has increased by 18 percentage points since the last calculation. The Bronx continues to see the highest rate of income inadequacy across all five boroughs

*The years 2000 through 2014 use an aggregate for the Brooklyn TCL, years 2014 through 2023 are specifically for Northwest Brooklyn. **Median earnings are the average of all boroughs. U.S. Census Bureau, American Community Survey (ACS). 2000, 2004, 2008, 2010, 2014, 2018, 2019, 2021. Detailed Tables. B20002. Median earnings in the past 12 months by sex for the population 16 years and over with earnings in the past 12 months. Retrieved from data.census.gov 2021, data is the latest available and is updated using the Employment Cost Index.

As illustrated in Figure B, the percentage of households falling below the Official Poverty Measure also experienced a large increase of four percentage points since the 2019 calculation. In other words, the outdated, low poverty line (around $30,000 for a family of four across the United States) shows more than 146,000

Figure B. Percentage of Households Above Poverty and Below TCL: NYC 2012, 2016, 2019, & 2021

households fell below the OPM since the last report. Figure B also documents the 10 percentage point increase in households above the poverty line but below the NYC True Cost of Living (from 24% previously to 34% now).

Examining specific variables in this analysis reveals other explanations for the dramatic increase, which will be explored throughout the report. However, a significant change is the increase in the proportion of households with no workers and the decrease in households with two or more workers. The 2021 ACS dataset reflects a period of time where the unemployment rate had dropped in half from the pandemic peak in May 2020 but was still in recovery. However, when we control for the potential loss of hours worked due to the pandemic by looking specifically at households with one full-time, year-round worker, we still find that the income inadequacy rate increased from 34% to 40% over this time period. This data reveals that while many workers lost their job due to pandemic related layoffs or left the workforce to care for children, household income has not kept up with the true cost of living.

The lingering effects of the pandemic related to job loss and the increasing costs of living in the New York City region has left half of working-age households struggling to make ends meet. The demographic characteristics of these households will be explored throughout the rest of this report.