What is the Average Salary Needed for Basic Living in the USA?

The average salary can often be misleading due to its upward skewing by higher earners. As a result, many Americans find themselves in a precarious financial situation, barely a few hundred dollars away from a crisis.

When it comes to determining an adequate salary for basic living in the USA, several key factors must be considered including location, family size, and lifestyle. Below, we explore these aspects and provide general guidelines to help individuals understand the financial landscape in the country.

Factors Influencing Basic Living Salaries

Here are some critical factors that influence the average salary required for basic living in the USA:

Federal Poverty Level

The federal poverty level for a single person in 2023 is approximately $14,580 annually. This benchmark is often considered the minimum income needed to cover basic necessities such as housing, food, and healthcare.

Living Wage

A more realistic measure for achieving a basic standard of living is the living wage, which accounts for the cost of living in various areas. According to the MIT Living Wage Calculator, the living wage for a single adult with no children ranges from around $16 to $25 per hour, depending on the state and city. This translates to an annual income of approximately $33,280 to $52,000.

Cost of Living

The cost of living varies significantly across different regions in the USA, affecting the salary needed for basic living. For example, in high-cost areas like San Francisco or New York City, a salary of $70,000 or more may be necessary to afford basic living expenses. Conversely, in lower-cost areas such as certain parts of the Midwest or the South, a salary of $40,000 to $50,000 may suffice.

Personal Experiences and Regional Variations

From personal experience, I have found that making more than $30,000 per year can offer a comfortable living, but this varies greatly depending on location.

For instance:

In Italy, €1500 a month (or about $13,000 annually) can provide a decent standard of living. In Portugal, €1500 a month can be considered quite a good salary. However, in London, €1500 a month would be barely sufficient, indicating a stark contrast in cost of living between countries.

The same principle applies within the USA, reflecting significant regional differences:

A salary of $50K might be considered adequate in Ohio, but exceptional in Mississippi. However, in densely populated areas like New York, San Francisco, or Seattle, $50K might barely meet the federal poverty level, which is approximately $14,580 for a single person.

Conclusion

In summary, while a minimum of around $14,580 is the federal poverty level, a salary in the range of $33,000 to $52,000 is often considered necessary for a basic but decent standard of living, with adjustments based on specific location and personal circumstances.