Economic Insecurity - NYTimes.com

Economic Insecurity - NYTimes.com

November 22, 2011, 6:30 AM
Economic Insecurity
By MOTOKO RICH
With the Census Bureau fine-tuning its definition of poverty, a group of “near poor” has emerged — those who are not officially poor but are perilously close to it.

Another way of putting that is to look at “economic security,” the amount of income necessary to cover basic expenses without relying on public subsidies.

A new report from Wider Opportunities for Women, a nonprofit group that previously produced an index of what it takes to do more than survive while working, shows that 45 percent of United States residents live without economic security. That means they are not earning enough income to cover basic expenses, plan for important life events like college or save for emergencies like unexpected health bills.

“What does it take for households in this country to get by and be able to plan for their own futures based on the work that they do?” said Donna Addkison, president and chief executive of Wider Opportunities for Women. “We’re really looking at not just the lowest of the lowest income households but that slice of households that live somewhere above the poverty line but are constantly in danger of being thrown into financial catastrophe, and that’s a much larger slice of the American public than we are currently talking about.”

Although the study uses median incomes on a national basis, Wider Opportunities and its research partners are working on tables that define what economic security would mean on a state-by-state basis. Obviously, the income needed to cover basic expenses would be higher in New York City than in Omaha.

The report showed that 55 percent of children live in households where families do not earn enough to achieve economic security. Even among those households with two full-time workers, 22 percent of those families with children earn less than is necessary to guarantee economic security.

The most vulnerable households are those led by single mothers, as well as African-American and Hispanic households. Only 18 percent of households headed by single mothers are living with economic security, while two-thirds of Hispanic households and 62 percent of African-American households are not earning enough to cover basic needs and saving requirements.

Part of the problem, Ms. Addkison said, is that so many jobs pay low wages. According to the report, less than 13 percent of the jobs that the Labor Department projects will be created by 2018 will pay wages that will be sufficient to allow families to keep their heads above water.

“We have a construct in this country that if you work full time and keep your nose clean and live by the rules, you will get that full-time job that allows you to take care of your family,” Ms. Addkison said. “And what we’re finding is that workers who are working full time or the equivalent are still struggling.”