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Staying Afloat in Tough Times
What States Are and Aren't Doing to Promote Family Economic Security

Authors: Sarah Fass, Jodie Briggs, and Nancy K. Cauthen
Publication Date: August 2008

This is an excerpt from the full report.

These are challenging economic times for America’s families. Low- and moderate-income workers are seeing their wages stagnate or decline, while the cost of basic necessities continues to rise. The economy is losing jobs, unemployment rates are rising, families are losing their homes, and food and gas prices are skyrocketing.

Forgotten in the policy discussions about these new economic realities is the profound effect that economic hardship can have on children. Ongoing exposure to economic hardship, especially when children are young, can compromise their development – limiting their opportunities, academic achievement, and future health and productivity. Research consistently shows that, on average, families need an income of about twice the federal poverty level to make ends meet. Currently, 39 percent of America’s children are living in families with low incomes, that is, incomes under twice the federal poverty level, or roughly $42,000 for a family of four in 2008. This kind of widespread economic hardship has the potential to hinder our nation’s competitiveness in the global economy.

The good news is that policy can make a difference. Staying Afloat in Tough Times highlights some of the ways that state-level policy can help families both avoid and cope with economic hardship. It also identifies some of the limits on what states can do in the absence of stronger federal policies.

The report tracks three categories of state policy choices that affect the ability of low-wage workers to achieve financial security:

  • Work Attachment and Advancement.

    Employment is a critical component of family economic security. Work support policies such as child care assistance, public health insurance, and benefits for the unemployed promote employment and help parents stay in the labor force and get ahead.

  • Income Adequacy.

    Income is the most basic building block of family economic security. It provides the means through which families pay for their everyday needs, such as housing, food, transportation, and child care. Policies that promote income adequacy include those that boost and supplement low wages, reduce tax burdens, and provide access to paid leave.

  • Asset Development and Protection.

    Savings and assets can help families survive a crisis, plan for the future, and improve living standards. State policies can help low-income families develop assets as well as protect assets that families have already accumulated.

This report focuses only on policies that benefit individual families (as opposed, for example, to broader job creation and economic development strategies) and only on those policies for which 50-state data sources are available.

Before presenting the report’s findings, we begin with a discussion of why state policies to promote family economic security are especially pressing at this time – economic hardship threatens an increasing share of the nation’s families, with implications for their children and for our nation’s future.

State Family Economic Security Profiles

This report is accompanied by a set of individual state profiles that highlight the policy choices each state has made, along with demographic data on how families are faring economically across the states. Each state profile also provides links to 50-state tables of all policy and demographic information that can be viewed and downloaded. See your state’s family economic security profile.