This post was written by Shawn Fremstad, Director of the Inclusive and Sustainable Economy Initiative at the Center for Economic and Policy Research.
Earlier this year, the Obama administration unveiled plans to develop a “supplemental” poverty measure (SPM) based on recommendations made by the National Academy of Sciences in 1995. The SPM makes important technical improvements on the current outdated poverty measure (although, unfortunately, the current measure would remain the “official” one). However, it doesn’t take the much more important step of providing an accurate measure of what it takes to “make ends meet” and be economically secure in today’s economy.
The official poverty line for a family of four is currently a mere $22,000. We don’t know yet for sure where the supplemental poverty line will fall, but previous Census estimates suggest that it will only be a few thousand dollars higher, at best, than the current poverty line. By comparison, the Economic Policy Institute estimates that a four-person family needs just under $50,000 a year, on average nationwide, to make ends meet at a “modest, but safe” level. Similarly, the Commerce Department recently estimated that a four-person family needed at least $51,000 a year to achieve a minimum “middle-class family budget.”
The pay and benefits of direct care work should be judged primarily by whether it is possible for direct care workers, at a minimum, to live, not just above an extremely low “poverty” line, but at a middle-class level that allows them to be economically secure. As Joan Kuriansky and Shawn McMahon of Wider Opportunities for Women have put it: “we require a measure of economic security that allows us to speak in common terms about the following: a destination far enough from poverty thresholds to prevent falling back into poverty; what those currently living above poverty thresholds truly need to make ends meet; who lacks financial stability despite living above poverty thresholds; and the effects of economic insecurity—on individuals, families and local economies.”
For three decades after World War II, the U.S. Department of Labor developed family budget standards that reflected a “modest, but adequate”—and, most importantly, an above poverty—living standard for working- and middle-class families. Unfortunately, these standards were discontinued in the early years of the Reagan Administration. It’s time to bring them back.
What can direct care workers do to make this happen? First, urge President Obama and Labor Secretary Hilda Solis to move beyond the poverty line and adopt a modern standard of economic security, one that accurately assesses what it takes to make ends meet. You should also encourage them to improve the supplemental poverty standard they’re proposing by treating health insurance, basic savings for retirement or a “rainy day”, and education and training as basic necessities that should be reflected in the poverty thresholds.
