Do You Have Economic Security? I Don’t

At least, judging by the Basic Economic Security Tables (BEST) that are tabulated by Wider Opportunities for Women (WOW) and the Center for Social Development (CSD) at Washington University in St. Louis as part of the national BEST Initiative led by WOW.

I’m not even close. And I have a four-year degree. This isn’t really surprising to me — it’s more of a reinforcement of what I sadly know.

According to BEST, a single worker must make at least $30,012 (or $14.21 per hour) to have some economic security (a middle class existence perhaps?). That number is only valid if your job provides employment-based health insurance and a retirement plan. That’s another strike against me — our 401k benefits got scratched when the economy took a hit.

If you are a family of four with two workers and two children, you need to earn at least $67,920 ($16.08/hour per worker), along with employment-based benefits.

These numbers only hold if you live an austere existence with few pleasures that most of us take for granted like eating out, vacations or other discretionary spending.

Modest savings for an emergency and retirement are figured into BEST.

Here are some of the other findings in the annual report:

• Families, the media and policymakers often focus their attention on volatile, rising expenses, such as food and fuel. While such expenses are important in day-to-day life, they are small parts of families’ much larger economic
security challenges. Expenses such as housing, transportation and child care receive less att ention, but are much larger pieces of the economic security puzzle, and can be greatly influenced by policy.
• The largest expense for most BEST families is rent and utilities. Other large expenses include transportation,
child care and taxes.
• Transportation is the largest or second largest expense for small or mid-size 2-worker families that maintain two cars.
• The high cost of quality child care is the greatest threat to many families’ security, and in many places across the country, the cost of child care threatens a second parent’s ability to work and increase family income. In most families with two or more young children, child care is the largest expense.
• A BEST family with two preschoolers pays $1,280 per month for quality child care. Due to the high cost of child care, BEST income needs are nearly as high for a 1-worker family with two preschoolers as for a 1-worker family with five teenagers (who don’t require care).
• For those families who are able to participate in employer-sponsored health insurance plans, health care expenses comprise 4-12% of economic security budgets. The average 2-adult, 2-child family which participates in an employer-sponsored health insurance plan pays a $278 premium each month, and an additional $177 out of pocket per month.

• The large majority of US employers still offer health insurance to their full-time workers. However, a large minority of all US workers, 46%, don’t or can’t participate in employer insurance plans. The average 2-adult, 2-child family which cannot or does not participate in an employer-sponsored health insurance plan pays $224 more per month—$2,687 per year—more than those who do participate in employer health plans.
• Tax credits are critical to many families, as they reduce large BEST families’ taxes by nearly 50%. However, for BEST workers without children, tax credits only reduce tax burdens by 8-13%.
• Ultimately, each family with an income lower than the BEST Index decides which components are most important and how to allocate its spending, but the BEST suggests the trade-offs families face when incomes fall short of the BEST Index. Because the BEST is a conservative estimate of need, if families spend significantly less on an expense than the BEST suggests, they risk consuming at substandard levels or consuming goods and services (housing, food, child care, etc.) of substandard quality.
• To achieve intermediate- and long-term economic security, workers should save for emergencies and retirement,
consistently and over long periods. Doing so makes the burden of saving manageable, allows families to save for several forms of stability, and promotes lifelong and intergenerational economic security.
• The smallest economic security needs are emergency and retirement savings. Retirement savings constitutes
less than 3% of BEST budgets. Emergency savings constitutes 3-4% of most BEST budgets.
• Emergency and retirement savings are an economic security budget’s “low-hanging fruit,” family and community stability that can be obtained through livable incomes, access to employment-based benefits, and innovative policies which promote savings or reduce workers’ basic expenses.
• A family of 1 worker and 2 children with access to unemployment insurance (UI) requires $109-$161 in BEST emergency savings per month.
• Approximately 18% of workers lack access to unemployment insurance (UI), which greatly increases workers’ emergency savings requirements. A BEST 1-worker, 3-person family without access to UI requires an additional $79-$89 more in monthly BEST emergency savings than the same family with access to unemployment benefits.

Find out a lot more in the full report here.

How do you stack up against these numbers?

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