Majority of Americans lack economic security, study finds

More than half of American households do not have the resources to pay their monthly bills and have enough money left over for savings, according to a new gauge on the cost of living in the U.S.

A recent report from the Urban Institute introduced a new measure, dubbed the True Cost of Economic Security Line (TCES), that takes into account a comprehensive set of costs that modern families face alongside the resources available to them, and found that 52% of people in the U.S. are economically insecure and unable to thrive. 

The findings show that three out of five children live in families with resources falling below the TCES line, compared with 49% of adults ages 18 to 64 and 46% of adults ages 65 and older.

The vast majority of people in single-parent families fall below the TCES line, the study determined, and half of all people living with two adults (under age 65) and two children lack the resources to cover their costs.

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The study was commissioned by the National True Cost of Living Coalition, which was formed this year by anti-poverty agencies concerned about the nation’s inability to both accurately measure what it costs individuals and families to live in America today and to govern accordingly. They say the TCES is more accurate than traditional measures used by the government.

“Despite an improving economy, far too many Americans continue to struggle to plan beyond their next paycheck,” the coalition said in a press release. “It is a disconnect brought into stark relief by this month’s election, with voters voicing widespread dissatisfaction about their financial situation even as traditional economic indicators suggested progress.”

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The group argues that traditional measurements of economic need, such as the federal Official Poverty Measure (OPM), focus only on subsistence and deprivation, failing to distinguish between what it costs for families to afford their most basic needs and what it costs for them to save enough for the future — whether it’s to start a family, buy a home, cover tuition or pay for emergency expenses. 

“This is not a new problem,” says David Jones, CEO of the Community Service Society of New York (CSS) and co-chair of the National True Cost of Living Coalition. 

“Low-income and increasingly many middle-class Americans have been struggling financially for decades, but we have not had the right measure to account for it, leaving segments of our population and their struggles largely unseen,” he said. “What is new — and historic — is our ability to measure the scale of these challenges accurately.”

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The TCES captures a fuller picture of a family’s finances by considering both costs and available resources, according to its developers.

“With this measure, we can use it to see how many people are struggling economically, see how that varies by people of different demographic groups and living in different locations, [and] understand the reasons why they’re struggling,” the Urban Institute’s vice president on income and benefits policy, Gregory Acs, said in a presentation on the study last week.

“Are there certain costs that are prohibitively high for certain families in certain places? To what extent are resources a challenge as opposed to costs?” he asked rhetorically. 

“Once we sort of see who is struggling and why they’re struggling, that should help policymakers at federal, state, and local levels [to] identify policies, programs, practices that can support and empower families to help them meet the true cost of economic security.”