North Carolina Families Struggling to Make Ends Meet Even Before COVID-19 Hit, According to New Data

CARY, N.C., Aug. 18, 2020 /PRNewswire/ -- The United Way of North Carolina and United Ways across the state release the updated Self-Sufficiency Standard for North Carolina 2020, which defines the minimum income needed to support a family without public or private assistance.

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For most workers, the Standard shows that earnings above the official poverty measure are nevertheless far below what is needed to meet families' basic needs. The data is available county-by-county across North Carolina and for more than 700 household configurations. 

"The Federal Poverty Level does not accurately reflect the threshold of need for working families. Many families across North Carolina are working two or more jobs and are still unable to make ends meet," said Laura Marx, President and CEO of United Way of North Carolina. "The Self-Sufficiency Standard outlines clear barebones budgets and sets the minimum income threshold to be financially stable, without public or private assistance."

Marx explains that those with income above the Federal Poverty level may not be eligible for work supports and yet struggle to meet their basic needs. The Federal Poverty Measure is based solely on the cost of food without accounting for housing, childcare, healthcare, transportation and more. Additionally, the Federal Poverty Level does not change based on geographic location or age of those in a household. The Self-Sufficiency Standard takes these variables into account allowing for a broader representation of all counties and family compositions.

The report includes the Our Money Needs Calculator developed in partnership with RTI International. This online tool calculates, by county and household configuration, the minimum income required to meet basic needs without public or private assistance: https://www.unitedwaync.org/our-money-needs-calculator

"Many working families were struggling before COVID-19 hit and essential workers have continued to support their families and communities, often at their own risk. They have done their part to help our state move in the right direction. With children home from school, childcare challenges impacted these same families," said Marx. 

Marx noted that depending on the age of children in the home, childcare alone can account for nearly a third of a family's budget. 

"When one adds housing, together these two items can reach close to 50% of a family's monthly expense," Marx said. "This data highlights the needs of essential workers and others struggling due to the impact of COVID-19 and will help our communities plan for how to invest dollars in local need."

According to the Self-Sufficiency Standard data, over the last 24 years, the threshold for a four-person family consisting of one adult, one infant, one preschooler and one school-aged child, increased on average across all North Carolina counties by 101%, or an annual average of 4.2% per year. However, there is considerable variation by county — ranging from 69% in Rowan County to 161% in Mecklenburg County.

The costs of basic needs in Wake County increased by 139% since 1996, which is significantly higher than the statewide average. In 1996, for the four-person family referenced in the above paragraph in Wake County, they needed about $40,006 per year to meet their basic needs. By 2020, that amount has increased to $95,623 per year — $55,617 more than 1996. In contrast, Stokes County costs, at a basic needs level, increased at a somewhat lower rate of 79%, which is below the statewide average of 101%. 

In conclusion, the University of Washington authors comment:
A strong economy means good jobs that pay Self-Sufficiency Standard wages and a workforce with the skills necessary to fill those jobs. 

Although the Self-Sufficiency Standard determines an adequate wage level without public benefits, it does not imply that public work supports are inappropriate or unnecessary for North Carolina families. For workers with wages below the Self-Sufficiency Standard, work supports for such necessities as childcare, health care, and housing are critical to meeting basic needs, retaining jobs, and advancing in the workforce. 

By utilizing the Self-Sufficiency Standard, North Carolina has the opportunity to lay the foundation to achieve a strong workforce and thriving communities. The Self-Sufficiency Standard is currently being used to better understand issues of income adequacy, analyze policy, and help individuals striving to be self-sufficient. Community organizations, academic researchers, policy institutes, legal advocates, training providers, community action agencies, non-profit organizations, and state and local officials, among others, are using the Self-Sufficiency Standard.

"Understanding the needs of working families enables local United Ways and other nonprofits across our state to develop sustainable solutions and strategies to move families toward financial stability," said Tim Gabel, Executive Vice President of RTI International and UWNC board member. "The Self-Sufficiency Standard research is a real-world example of taking a data-driven approach to measuring need, taking in account both family composition and where they live, along with seven areas of expense. It was a privilege for our staff to support United Way of North Carolina in this effort." 

View or download a full copy of the report at this link:
https://www.unitedwaync.org/selfsufficiencystandard.

About United Way of North Carolina:
United Way of North Carolina is a statewide organization, representing 51 local United Way organizations. Our mission is to increase the capability of the United Way system to improve the quality of human life in North Carolina.

About the Self-Sufficiency Standard:
The Self-Sufficiency Standard defines the amount of income necessary to meet basic needs (including taxes) without public subsidies (e.g., public housing, food stamps, Medicaid or child care) and without private/informal assistance (e.g., free babysitting by a relative or friend, food provided by churches or local food banks, or shared housing). The family types for which a Standard is calculated range from one adult with no children, to one adult with one infant, one adult with one preschooler, and so forth, up to three-adult families with six teenagers. The Self-Sufficiency Standard uses data from a variety of scholarly and credible sources, including the U.S. Census. 

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SOURCE United Way of North Carolina