Wednesday, June 30, 2010

Guest Commentary: The Self-Sufficiency Standard for Pennsylvania as a More Comprehensive Alternative to the Federal Poverty Level

Marlon D. Satchell, MPH
Project Director
Jefferson School of Population Health

A recent Philadelphia Inquirer article highlighted the release of The Self-Sufficiency Standard for Pennsylvania 2010, written by Diana Pearce, PhD, director of the University of Washington Center for Women’s Welfare. This standard was prepared for PathWays PA, an organization that advocates for efforts to benefit low-wage workers throughout Pennsylvania. For the past 30 years, wages in the United States have stagnated, while income inequality has grown. The Self-Sufficiency Standard was developed in 1996 as a more comprehensive method of determining family economic stability and changes in the economic needs of families from year to year.

The Self-Sufficiency Standard presents sobering facts about the cost of meeting a family’s most basic needs, without relying on public or private assistance. The 2010-2011 Self-Sufficiency Standard of $60,000 for a family of four is in stark contrast to the unrealistic and outdated Federal Poverty Level estimate of $22,000.

In contrast to the Federal Poverty Level, which focuses on the cost of food and uses that to gauge all other expenses, the Self-Sufficiency Standard takes into consideration factors such as housing, child care, food, healthcare, transportation, taxes, geography, and family composition. Further compromising the Federal Poverty Level is that it only measures need for households in which there is only one wage-earner, thus negating the necessity of child care. The exclusion of families with two working adults also ignores the difficulties that such families have meeting their economic needs. It also excludes the essential but growing costs of housing, healthcare, and transportation.

Another important factor about the Self-Sufficiency Standard is that it calculates a standard for a number of different family compositions, and reflects the varying needs of families with and without more than one working parent, and families with children of different ages. The standard calculates the variations in economic needs and responsibilities at the state, county and local level as well. As an example, the standard for a family of four in Montgomery County is over $73,000, which is considerably higher than that for Philadelphia County. As a result, far more detailed information about the relative weight of household expenses across the country and across individual states can be used to more accurately assess the status of families living in those areas, and determine the range and scope of the services that they may need. Finally, the Self-Sufficiency Standard is updated every two years, allowing for policy-makers and other users to have current, up-to-date information on populations in need.

Ultimately, the Self-Sufficiency Standard is a far more comprehensive tool that can be used by employers, advocates, and legislators to assess wages, provide career counseling, and create programs that lead to self-sufficiency for working families. The enormous gap between the Self-Sufficiency Standard and the Federal Poverty Level serves as a clarion call that the existing standards by which the Federal Poverty Level is developed are profoundly out-of-date. The Federal Poverty Level conveys a lack of understanding of who needy families are, and the necessities they must pay for. The Self-Sufficiency Standard is therefore shown to be a far more comprehensive and realistic tool that reflects the changing times and the different hurdles that working families now face.

The full report, including information on methodology, data sources, the authors’ assumptions, and ways in which the data has been used can be found here.