WASHINGTON, D.C. — From a holiday celebration to a family road trip or even a meal at the local diner, most middle- and lower-income families may find it necessary to take on debt just to enjoy even the most basic quality of life activities, according to new research by the Ludwig Institute for Shared Economic Prosperity (LISEP).
“A trend of stagnant wage growth accompanied with accelerating inflation has pinched middle- and lower-income families to a level where even the most meager quality of life expenditures have been squeezed out of the household budget,” said Gene Ludwig, LISEP chairman. “Forget a family vacation — family pizza night is a stretch for most American families.”
Today LISEP released the white paper “The First Rung Up the American Dream Ladder: An Analysis of the Cost of Basic Recreational Activities for American Families” with the announcement of LISEP’s new Minimum Quality of Life (MQL) Index. The MQL identifies seven basic common recreational activities and tracks their cost over time, weighted by family type and size. Costs are based on government and industry-reported data, with activities selected based on historical preferences of American families, or to serve as proxies for similar activities. The MQL index includes a budget for eating out, a television subscription, basic adult sports equipment, children’s school sports, Minor League Baseball tickets, a three-day family vacation, and an end-of-year holiday budget.
LISEP found that the cost of these minimal recreational activities has increased 38% between 2001 and 2021 for the average American family, and more than 50% for a family with three children. The Consumer Price Index (CPI) for recreation grew by 19% in comparison during the same period. Effectively, this means a typical family at the median income level would not be able to afford core necessities and the most basic level of recreation in any of the last 20 years.
LISEP determined that for a two-parent, two-child family, the minimal cost for recreational activities in 2021 would be $4,911. Based on LISEP’s research for the development of the True Living Cost (TLC) Index, the cost for basic necessities (housing, food, etc.) has grown 45% faster than the CPI indicates. When the cost of basic necessities is combined with MQL’s recreational basket, the budget would top out at $79,466 — significantly beyond the median household income of $70,784 for a two-parent, two-child family.
“In simple terms, this means that the average American family struggles just to make ends meet, putting even the most basic quality of life expenditures out of reach,” Ludwig said.
By MQL category, from 2001 to 2021 the cost of children’s sports jumped the most (82%), primarily due to school participation fees. This is followed by family vacations (up 60%), eating out (57%), a minor-league baseball game (29%), winter holiday budget (13%), and adult sports equipment (7%). But the cost of a television subscription service is actually down 32% over that time, primarily due to the recent proliferation of more affordable online streaming options.
“A society cannot collectively grow and thrive if a majority of the population struggles with basic needs — and cannot even consider the basic wants,” Ludwig said. “This is one area where the private sector can, and should, step up, and it is very much in their best interest to do so. Some companies have recognized this and offer a monthly stipend for gym memberships, sports equipment, and other health and wellness expenditures. Encouraging a better quality of life makes good business sense, with the result being a healthier, happier society and a more productive workforce.”