The Vanishing Surplus: Why California Families are Feeling Twice the Pain
Living in California has always carried a “sunshine tax,” but according to the latest analysis from the Common Sense Institute (CSI), that tax has become a massive financial burden. The study measures “affordability” by tracking surplus income—the money remaining for a family of four after covering housing, taxes, and basic necessities.
In 2019, an average California family enjoyed a surplus of 17.94% of their income. By last year, that figure plummeted to just 10.88%. This 7.1 percentage point drop is more than double the national average decline of 3.2%, signaling that California’s economic squeeze is significantly more aggressive than in the rest of the U.S.
The “Big Two” Budget Killers: Housing and Childcare
The report identifies a direct correlation between high housing costs and high childcare costs, creating a “double-whammy” for working parents.
1. The Housing Weight Housing is the single largest factor in the affordability gap. Nationally, the average household spends 18.5% of its income on housing. In California, that number jumps to 24.4%—the fourth-highest in the country. Compare this to Kansas, where housing takes up only 15.2% of income, allowing their surplus to actually increase by 5% over the same period.
2. The Childcare Cliff California families are also facing some of the highest childcare costs in the nation. While parents in Kansas spend roughly 11.1% of their income on childcare, California parents are paying more than double that at 22.9%.
Where Does California Rank?
California ranks as the third-worst state for declining affordability since the pandemic, trailing only Rhode Island (-8.4%p) and Massachusetts (-8.1%p). These three states share a common struggle: severe housing shortages combined with high demand, which drives up prices across all sectors.
“In high-cost states, the lack of housing supply creates a compounding effect on all other living expenses,” explains Jake Kreamer, Senior Economist at Realtor.com.
The Bottom Line
The 2026 economic landscape shows that “surviving” in California now requires a much higher percentage of a family’s paycheck than it did just half a decade ago. As Zachary Milne, Senior Economist at CSI, puts it: “Housing is the primary driver of the cost-of-living crisis, acting as the most significant financial constraint for consumers today.”
BY HOONSIK WOO [woo.hoonsik@koreadaily.com]
