Economic security means not just hovering above the “official” federal poverty line, but having enough money to build a more stable and prosperous future. To be truly economically secure, and leave poverty behind for good, people need enough money to be able to pay for the basics like rent, food, child care, health care transportation, and taxes, and enough money to develop savings and assets.
The measure typically used to assess whether people have enough money to live is the Federal Poverty Line – an outdated metric developed in 1964. The Poverty Line is calculated using only the cost of food, which is assumed to be one-third of a household’s budget. It does not consider other critical costs such as housing or child care, and it does not vary based on geography, or the ages of children in the household. For a family of four – whether they live in a high cost market like San Francisco, CA or a more affordable market like Baton Rouge, LA – the poverty line is $22,050 in annual household earnings. A more realistic measure of wage adequacy is the Family Economic Self-Sufficiency Standard (or the Standard). The Standard is a comprehensive measure of how much it costs for working families to live, adjusted for regional differences in prices and the ages of the children in the household.
The Insight Center was one of four organizations that started the Family Economic Self-Sufficiency Project, an innovative, nation-wide effort to gain support for proven strategies to help low-income families reach economic self-sufficiency. The Family Economic Self-Sufficiency Project was catalyzed by the welfare reform debates in the 1990s. At the time, there was considerable discussion about getting people off of welfare and into self-sufficiency, but the data to answer the question as to what it takes to be economically self sufficient did not exist. We felt we needed a realistic measurement in order to understand how these – mostly women and children – were faring without cash aid and what it would take for them to be truly economically secure. Thus, we worked with our national partner, Wider Opportunities for Women in DC, The Women’s Foundation and CFED, to develop the Self-Sufficiency Standard and launch the Family Economic Self-Sufficiency project nationally and here in California where the program is known as CFES, or Californians For Economic Security.