Setting the Standard for America’s Working Families The Family Economic Self-Sufficiency Project and the Self-Sufficiency Standard Presented by: Joan A. Kuriansky, Executive Director Wider Opportunities for Women, Inc., Washington, DC 1001 Connecticut Avenue, NW, Suite 930, Washington, DC 20036

2 Today’s Presentation  Wider Opportunities for Women  Background on the Family Economic Self-Sufficiency (FESS) Project  What the Self-Sufficiency Standard Is and How It Is Calculated  How the Standard Has Been Used

3 Why WOW Launched the FESS Project Our Challenge: How to measure the circumstances and obstacles facing low- income families trying to become economically secure? How to develop programs and policies that increase opportunities for low-income families that move families toward economic self-sufficiency How to affect the public and policy makers about the needs of these families? How to mobilize a community to act with and on behalf of these families?

4 The Family Economic Self- Sufficiency Project The Six Strategies for Self-Sufficiency: Targeting high wage jobs Promoting NTO for women Micro credit IDA Functional Literacy Self-Sufficiency Standard

5 The Family Economic Self- Sufficiency Project Who we are today: 36 State partners with state wide coalitions representing over 2,000 community based organizations, state and local government, employers and labor.

6 What is the Self-Sufficiency Standard? Amount of income required to meet basic needs (including taxes) in the regular “market place” w/o public subsidies or private/informal subsidies Public subsidies = Food Stamps, Medicaid, subsidized child care, etc. Private subsidies = free baby-sitting by a relative, food provided by churches or food banks, shared housing, etc. Lead Researcher: Dr. Diana Pearce, University of Washington

7 How is the Standard Different from the FPL The FPL is based on 2-parent family model assumes only 1 parent works in 2-parent families & no workers in single-parent families.  The Standard assumes that all adults work full-time— includes costs of working, i.e., transportation & taxes, & for families with young children, child care. The FPL is based on the cost of food and assumes that food is 1/3 of the family budget.  The Standard is calculated differently—based on costs of all basic needs, updated annually, allowing costs to increase at different rates.

8 How the Standard & poverty measure are different The FPL only distinguish by family size and number of children  The Standard varies costs by the age of children— especially important for child care, but food and medical care costs also vary by age. The FPL assumes costs are the same, no matter where you live  The Standard varies by geographical location—most important for housing, but also geographic variation in costs of child care, health care & transportation.

9 Assumptions All Adults work full time No family members with special needs No frills budget No one time purchases ( furniture, car, appliances) No savings No loan payments

10 7 Basic Categories of Expenditures Housing: Fair Market Rents set by HUD, including basic utilities Food: USDA Low-Cost Food Plan Child Care: State Child Care Market Rate Survey Transportation: Public Transportation or Costs of owning and operating an average car (Natl. Assoc. of Insurance Commiss. on Consumer Expenditures) Health Care: Average employee premiums and out of pocket costs for employer-sponsored insurance Miscellaneous: 10% of all other costs Taxes: Federal income and payroll taxes, state and local sales taxes minus low-income tax credits.

The Self-Sufficiency Standard for Los Angeles, CA 2003 One Adult One Adult, One Preschooler One Adult, One Preschooler, One Schoolage Two Adults, One Preschooler, One Schoolage Monthly Costs Housing$807$1,021 Child Care$0$672$1,056 Food$182$276$411$565 Transportation$242$248 $475 Health Care$72$219$238$276 Miscellaneous$130$244$297$339 Taxes$295$462$534$583 Earned Income Tax Credit (-)$0 Child Care Tax Credit (-)$0-$60-$105-$100 Child Tax Credit (-)$0-$83-$167 Self-Sufficiency Wage-- Hourly$9.83$17.03$20.07$11.50 per adult Monthly$1,729$2,998$3,533$4,049 Annual$20,751$35,977$42,392$48,590

12 Percentage of Income Needed to Meet Basic Needs, 2002 Maricopa County Arizona – one parent, one preschooler, one school age

13 The Standard Compared to Other Benchmarks, 2002 (Tucson, AZ - one parent, one preschooler, one school age child)

14 The Standard Helps Us Understand  It is not about bad budgeting  It is not just about the poor- a large part of the population falls in the gap  There is little or no cushion when things go wrong  To get by month to month, families often have to make hard choices Run up credit bills or take out usurious loans; forsake needed medical care or obtain free food Many families don’t get by Foreclosure, family stress, substance abuse, domestic abuse

15 The Impact of Work Support

16 “Coming Up Short” National Snapshot of Impact of Wages and Work Supports Minimum wage covers only 34% of costs on average. Subsidized childcare makes a significant difference (can reduce cost by as much as 35%) At $12/hour a family meets only 72% of its costs on average. Key is the interaction between state and federal policy.

17 “Overlooked and Undercounted” Report shows how California families are faring in relation to the Standard - 1/5 of SF Bay Area below SSS; 1/3 rd in L.A. Shows not just who is below the Standard, but what their characteristics are - more than 1/2 Latino households - more than 1 out of 4 households with one full time worker can’t meet basic needs - 78% households with 4 or more children are likely to live below self sufficiency Broadens discussion about whether which policies and programs are working w/ info on who is “making it” and who is not

18 How the Standard Has Been Used To affect policy changes: Assess impact of different work support policies Establish co-payment schedules for childcare assistance Evaluate tax reform policies, sales tax vs change in municipal a income state tax Establish living wage ordinances

19 How the Standard Has Been Used? To affect change in workforce policy:  WOW and NAWB survey-more than 30% of Local WIB’s used self sufficiency measure like WOW’s to affect policy  Expand eligibility for intensive and training services  Assess segments of job seekers who are being served  Direct training money  Goal in economic development/sector projects

20 How the Standard Has Been Used? To assess program effectiveness:  VA Joint Legislative Audit and Review Commission (JLARC) used VA Standard to assess economic outcomes for DSS clients To assist individuals and their caseworkers NYC Head Start and welfare offices Seattle One Stop counselors Philadelphia Office of Aging

21 The Budget Worksheet and Self- Sufficiency Calculators  PA piloted The Self-Sufficiency Standard Budget Worksheet and now there are online Self-Sufficiency Calculators in NYC, IL, and WA  Starts w/ the Self-Sufficiency Standard  Lets individual plug in real costs & subsidies  Tests various wages ability to cover costs

22 How the Standard Has Been Used To affect Public debate: Miami Prosperity Campaign Wyoming Family and Children Initiative The Bay Area “Bottom Line Report” State legislation to institutionalize standard Federal legislation

23 Moving Forward: Public Policies to Promote Self-Sufficiency -Renew investment in job skills training aimed at good paying jobs -Expand access to higher education -Economic development strategies targeted to quality jobs -Increase minimum wage -Expand of public or subsidized health insurance -Streamline application process for public benefits -Tax relief for low-income working families -Stronger regulation of high-cost financial services -Subsidized saving programs -Family leave benefits/unemployment insurance

24 How You Can Be Involved … Contact: Wider Opportunities for Women 1001 Connecticut Ave, NW Suite 930 Washington, D.C (202) Kate Farrar, FESS Program Associate