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The Self-Sufficiency Standard
Studies, In the mid-90s, a series of studies started appearing, under the name Self-Sufficiency Standard. The title refers to the point that for a young family to be self-sufficient, it needs to be able to meet its own needs without depending on relatives for housing, childcare or other essentials. How much does that cost, for families of various configurations in various parts of the country, to meet their most simply defined needs? The SSS studies are done one state at a time, or occasionally, for a metropolitan area that encompasses parts of several states. In a few cases, the second and even third studies have been conducted for the same area. Each uses a consistent methodology to calculate a no-frills cost of living. The lifestyle it provides is below the level most of us would define as the bottom of middle class. It assumes that all adults are employed full-time. In the body of each study, tables provide monthly and annualized costs of living for four typical configurations of family:
In the appendices, costs for other configurations of families are provided. Further, because some of the costs of living vary greatly from one geographical area to another, the costs are calculated on a local basis. The body of the study typically includes a table for each of three cities and one or two of the rural counties. (The appendices will list similar data for every metropolitan area and rural county in the state.) Before we describe what this no-frills lifestyle does include, let's name what it doesn't provide for. It doesn't provide for savings, debt repayment (whether it be student debt or credit-card debt, or even interest payments), birthday gifts, Little League, babysitting other than work-day childcare. It doesn't provide for diapers, furniture, dry cleaning, a car payment (it assumes an older, paid-off car for each adult, except where public transportation is the norm), any meals not prepared at home, or charitable contributions. Having said what it doesn't include, here's what the Self Sufficiency Standard does include, and the assumptions it uses. Five expense categories, plus miscellaneous and taxes, are calculated. Here are the assumptions:
To the subtotal of these five costs is added an allowance of 10% of that sum for Miscellaneous, which is assumed to cover clothing, shoes, paper products, non-prescription medicines, laundry, dry cleaning, cleaning supplies, non-prescription medicines, personal hygiene items, diapers, cribs, car seats, furniture, telephone service, union dues, bank fees, toys, school supplies, haircuts, and everything else. This is a very conservative assumption, to put it mildly. Finally, Taxes are calculated, based on local tax structures, to represent the amount that someone netting the subtotal of the preceding 6 categories would be paying out. The methodology also shows the earned income tax credit, child care credit and child tax credit, where applicable. The sum of these seven categories is the Self-Sufficiency Standard, the amount of income needed for a family of a specific configuration in a particular place, to meet its most simply defined needs. Notice that it doesn't assume that the family can get into public housing (for which the waiting lists are often years long or are not accepting newcomers) or Section 8 (ditto). The SSS, then, is a localized measure of a no-frills, bare-bones lifestyle. All one's basic needs are being met, but there are none of the extras that most Americans think are part of a middle-class lifestyle. Here are links to at least some of the studies. Choose one for a state you know. Read one in detail, and get to understand how it is set up, and then skim a couple others (looking primarily at the first five or so tables). Choose a state you think of as poor, and others you think of as high-income. Take a look at Louisiana's, though its data is from a few years before Katrina.
A single study collects SSS data for 10 cities:
COMING UP SHORT — A Comparison of Wages
and Work Supports in 10 American Communities
at http://wowonline.org/docs/dynamic-CTTA-43.pdf Some others exist, too, with similar but not identical methodologies:
and these national reports: Economic Policy Institute's Basic Family Budgets at http://www.epi.org/content.cfm/bp165 (2005), How Much is Enough: Basic Family Budgets for Working Families at http://www.epinet.org/books/HowMuchIsEnoughFINAL.pdf (2000) and Hardships in America http://www.epinet.org/books/hardships.pdf (2001) See also the list at http://www.epinet.org/content.cfm/issueguides_poverty_budgetsbystate and information at http://linux1900.dn.net/initiatives/fes/pubs/sss_and_other_budgets.pdf For a summary table of recent (2000-2005) Self-Sufficiency Standard study data, see More from the Self-Sufficiency Standard Studies When you read these studies, you may find it difficult to remember that the lifestyle that (in 2003) cost
As you read these studies, look for a couple of pieces of information:
and consider these questions:
Finally, think about the question of what society's response should be to this.
Wealthandwant applauds those who want to help, and advocates moving directly to the last of these responses, while not neglecting efforts to help those we currently afflict.
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... because democracy alone hasn't yet led to a society
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