Financial security elusive for nearly half of Americans, study says

Grocery shopper

A new report on economic security says the national poverty rate doesn’t tell the whole story of need and hardship among Americans.

An annual report released today by Washington, D.C., nonprofit Wider Opportunities for Women [WOW] found that almost half of all U.S. residents studied were not making enough money to be financially secure.

Economic security is based on the ability to meet basic needs for health, safety and work. That includes paying rent or a mortgage, buying groceries, affording a doctor visit and a way to get around town, among other expenses.

WOW calculates a single employed person with no children must earn $30,500 a year to be economically secure. Double that for a single parent of two children. And for a dual-income household with two children, WOW says they require $74,000 to be secure.

The US economic insecurity rate was 44 percent in 2012, almost three times the national poverty rate.

The overall insecurity rate did not rise for the first year since the onset of the Great Recession—a sign of continuing economic recovery, but rates remain well above pre-recession rates.

The federal poverty rate is on the same slow path to recovery. There was a slight drop in poverty, the first since 2006, but the rate is still higher than before the recession. The U.S. Census Bureau reported in September that the rate dropped from 15 percent in 2012 to 14.5 percent in 2013. According to a CNN Money story, the rate was 12.3 percent in 2006.

And as is the case with many stories of economic hardship, the financial woes were more common among minorities:

  • 75 percent of black and Hispanic children studied were part of families who could have trouble making ends meet.

  • 60 percent of black and Hispanic households were not earning high enough wages to be considered financially secure.

  • 78 percent of black single mothers and 83 percent of Hispanic single mothers experienced wages so low they could not meet the basic needs of their families.

“A measure of economic insecurity provides a much broader and more accurate assessment of the state of the economy and potential policy impacts,”  said WOW President and CEO Amanda Andere. “These stark numbers are important for policymakers and other leaders to consider when making decisions that impact struggling families.”

Reach Halle Stockton at 412-315-0263 or hstockton@publicsource.org. Follow her on Twitter @HalleStockton.