Families With Children Need How Much…? What Economic Security Really MeansBy Megan Curran
October 13, 2010
You may be surprised to know that since the 1960s, the standard federal poverty level has been calculated solely by multiplying a family’s food expenses by three. To put this inadequate measurement perspective, in 2009, the federal poverty threshold for a family of three was $17,098. However, a recent Washington Post article highlights a new report by advocacy group Wider Opportunities for Women (WOW), which breaks down what it really takes for a family with children in the D.C. metro area to be self-sufficient.
What is self-sufficiency?
As evidenced by the rather spartan calculations of the existing federal poverty line, all families incur regular, basic expenses that are not currently captured in the U.S. poverty measurement. The WOW report creates what they call the Basic Economic Security Tables Index (BEST) which goes beyond cash income to define the essential components of economic security: housing, utilities, food, transportation, child care, essential personal and household items, health care, and taxes – all of which combined allow families “to work, to make ends meet, and to save for emergencies and retirement”.
When a comprehensive account of family expenses was measured, the WOW report found that “the typical single parent [in the D.C. region] lives well below the Index.” The recession and high unemployment have clearly taken a toll. But families with children face even more financial hurdles. The WOW report notes that the biggest monthly expense for working parents with two or more children is not something like housing or taxes, but child care.
It’s all relative
By focusing the initial BEST report on the D.C. metro area, the WOW economic security index also demonstrates another important point that the current federal poverty measurement fails to capture: poverty is relative.
In Prince George’s County, Maryland (which borders Washington D.C.), a single parent with one child requires $62,000 a year in order to be self-sufficient according to WOW’s calculations. However, as the article suggests, the cost of living in close proximity or within D.C. tends to be almost 40% higher than in cities closer to the U.S. average, such as Salt Lake City, Utah; Las Vegas, Nevada; or Dover, Delaware. In these locations, the self-sufficiency index may require a smaller annual income for the same size household. This makes sense, given that the cost of housing, transportation, taxes, and more vary across the country.
But compare this to the Census Bureau’s current federal poverty threshold for a single parent with one child: $14,787. This same figure applies to every geographic area in the U.S. -- with significant implications for which families are then able to qualify for economic and social supports intended to bolster the security of lower-income households.
Where do we go from here?
In order to build economic security for our nation’s families across the country, WOW highlights the importance of “good incomes and good jobs”, supported by workforce education and training and improvements in public assistance programs that will support these workers and their families as they move forward.
However, given the fact that child-specific costs outpaced the costs of housing and taxes for many families, we also need to ensure that vital work and family supports, such as high quality child care, are affordable and accessible in all areas of the country.
WOW’s new report also demonstrates the importance of modernizing the U.S. measurement of its poverty levels. Earlier this year, President Obama announced that the Census Bureau will release a new supplemental poverty measure in fall 2011, although the specifics of how the new measurement will be calculated have not yet been released and the new measure will not be used to calculate eligibility for public assistance programs.
Basic economic security is something every family strives for and deserves. Accurately measuring what it takes for families to achieve that security is a necessary first step.