Matt Unrath is the Director of the National Family Economic Security Program at Wider Opportunities for Women.
Nearly half of all Americans lack basic economic security, the ability to stretch their incomes to cover even basic expenses, according to a recent report released by Wider Opportunities for Women (WOW). The report, Living Below the Line, compared the incomes that families of different sizes need to just get by in their local communities, and compared those costs (often 2 to 3 times higher than the minimum wage and the Federal Poverty Line) to what families actually earned. The analysis points to a different image of economic segregation—distinct from the 15% of Americans living in poverty or the popular 1%-99% divide—where 45% of all adults and children studied have trouble making ends meet. The results also underline the critical need for a more accurate understanding of the costs workers face and the incomes they need to care for their families.
To that end, WOW has just launched its new Economic Security Database (www.BasicEconomicSecurity.org), which provides comprehensive information on how much it costs for individuals, families and retirees to cover their basic expenses, including housing, food, health care and transportation. It places reliable economic security data conveniently at the fingertips of policy makers, advocates, service providers, researchers and families.
The Economic Security Database allows anyone to access WOW’s Basic Economic Security Tables™ (BEST) Indexand Elder Economic Security Standard™ Index (Elder Index)for all of the cities, counties, and states for which data is currently available in an easy-to-use online tool.
The BEST Index is a measure of the basic needs and assets workers require for economic security throughout a lifetime and across generations. The BEST measures the local costs of basic expenses and savings needs for 420 different family types at the city, county and state level and determines the incomes families require.On average, a single worker in the US needs to earn just above $30,000 a year to cover these basic costs. A family of four with two young children must bring in almost $68,000 annually. And these figures assume that these households have employment-based benefits.
The Elder Index is a similar measure of well-being that looks at the incomes older adults (based on their housing and health status) need to meet their basic needs, including housing, food, health care and taxes. A single renter in retirement requires just over $20,000 to make ends meet, while an elder couple who rents faces almost $28,000 in expenses.
The BEST and Elder Index data can be used to benchmark wages and household economic security over the life course, evaluate economic and workforce development systems, identify jobs that provide adequate wages, advance the policies and programs that promote savings, improve career and financial planning and contribute to the public understanding of economic security. WOW’s partners across the country are employing WOW’s tools to serve their communities. In DC, the BEST serves as the foundation of a career planning curriculum that serves low income youth and adults. In Mississippi, the BEST supports career planning programs for students in the community college system. In New Mexico, the BEST is used to underline the importance of asset building policies and programs. In California, aging agencies use the Elder Index to measure the status of senior’s economic well-being and inform how they serve their communities’ older adults.
The Economic Security Databaseallows users not only to find data for their county and family type,but to compare their personal budgets to their local BEST Index, compare expenses across locations and family types and download state-and county-specific data.
Both of WOW’s measures capture the important role that wealth and asset building play in building family economic security. In a new analysis, WOW found that the median income in every state fell short of providing what older Americans require to meet their basic expenses in retirement, according to the Elder Index. Social Security and Medicare, while critical,certainly do not provide all that seniors need to cover their basic costs in retirement; personal savings and other supports are critical to ensure that security. For its part, WOW built into its BEST Index the monthly cost of saving for retirement and emergencies to ensure that families can maintain that lifelong security in retirement and during periods of financial emergencies and unemployment. The monthly cost of saving for emergencies and retirement in a BEST table sits right alongside other basic living expenses, like monthly rent payments and food costs. WOW’s measures make this clear: adequate emergency and retirement savings is a constitutive element of economic security.
In addition to bringing needed attention to the importance of saving and asset building to discussions of adequate income and true living costs, the BEST and the Economic Security Database make available important data in a field where savings and asset data are scarce. One of the field’s only barometers of adequate savings or wealth is a common definition of asset poverty–defined as the lack of enough savings for a family to subsist above the federal poverty line for three months. The BEST offers a more aspirational benchmark of security, providing monthly savings targets for retirement, post-secondary education, homeownership and emergencies. The target is also family- and community-specific and can be a critically important tool for all of those in the asset building movement. The BEST clearly documents the challenges families face in stretching their incomes beyond covering basic expenses, which underlines the importance of policies and programs—CSAs, UVRAs, the AFIA, 529s and more—that make saving more accessible and achievable for low-income households.
Additional information about the Economic Security Database, including a step-by-step guide for new users, is available on WOW’s website. If you are interested in learning more about WOW’s data and how it can support your work, or you have questions, please contact Matt Unrath at firstname.lastname@example.org or 202.464.1596. To access the database, please visit www.basiceconomicsecurity.org.