What is the Self-Sufficiency Standard?
The Self-Sufficiency Standard tracks the true cost of living facing North Carolina families today, using credible and geographically specific data.
As the labor market continues to change, more and more families struggle to stretch their wages to meet the costs of basic necessities. Though these families are often not deemed “poor” by the official poverty measure, they lack enough income to meet the rising costs of food, housing, transportation, health care, and other essentials. The Standard highlights the growing gap between sluggish wages and ever-increasing expenses, clearly illuminating the economic “crunch” experienced by so many families today. By tracking and calculating the true cost of living, the Standard allows for comparisons of geographic differences and family make-up as well as documentation of historical trends.
- In North Carolina, the amount needed to be economically self-sufficient varies considerably by geographic location and family type.
- For families with young children, the cost of housing and child care combined typically account for approximately half of the family’s budget.
- Over the past two decades, cost increases have far outstripped wage increases.
- The federal poverty guideline for three-person families ($21,720 annually) is set at a level well below what is minimally adequate to meet a family’s basic needs.
- Although a quarter of North Carolina workers hold one of the top ten most common occupations in North Carolina, only one of these occupations (registered nurses) have median wages above the Standard for a family of three in Forsyth County.
- Maintaining an emergency savings fund is a crucial step towards economic security.
Frequently Asked QuestionsHow is the Self-Sufficiency Standard calculated?
The Standard is calculated for over 700 family types, using 8 types of expenses that all North Carolinians face.
- Housing – Based on the U.S. Department of Housing and Urban Development Fair Market Rents (FMRs).
- Child care – Calculated from market-rate costs (defined as the 75th percentile) taken from a state-commissioned survey by facility type, age, and geographic location.
- Food – Assumes the cost of nutritious food prepared at home based on the U.S. Department of Agriculture Low-Cost Food Plan.
- Transportation – Assumes the cost of public transportation if 7% or more of workers use public transportation to get to and from work, however no counties in North Carolina meet this level. Private transportation costs are calculated using per-mile costs from the American Automobile Association, the National Household Travel Survey, the National Association of Insurance Commissioners index, and the Consumer Expenditure Survey.
- Healthcare – Costs assume the expenses of employer-sponsored health insurance. Health care premiums are the statewide average paid by workers, for single adults and for families, from the Medical Expenditure Panel Survey. A county index is calculated from rates for the second-lowest cost Silver plan via the federal marketplace.
- Miscellaneous – Calculated by taking 10% of all other costs. This expense category consists of all other essentials including clothing, shoes, paper products, diapers, nonprescription medicines, cleaning products, household items, personal hygiene items, and telephone service. It does not include cable or internet service.
- Taxes and tax credits – Taxes include federal income tax, payroll taxes, and state and local sales taxes where applicable. Tax credits calculated in the Standard include: the federal Earned Income Tax Credit, Child and Dependent Care Tax Credit, and the Child Tax Credit. State tax credits include the North Carolina Child Credit.
- Emergency savings – The amount needed to cover living expenses when there is job loss net of the amount expected to be received in unemployment benefits. The amount calculated takes into account the average tenure on a job and the average length of unemployment of North Carolina workers. In two-adult households, the second adult is assumed to be employed so that the savings only need to cover half of the family’s basic living expenses over the job loss period.
The Standard has been used by government entities, advocates and service providers to assess and to change policies and programs in a number of ways including: as a benchmark for evaluation and program improvement; as a guideline for determining eligibility and need for services; as a counseling tool; to create online calculators; as a public education tool; and as a guideline for wage-setting and living wage campaigns. For more examples of the ways organizations apply the Self-Sufficiency Standard in their work please visit http://selfsufficiencystandard.org/standard-practice.
The Federal Poverty Level (FPL) is a five-decades-old calculation based on the cost of food, and assumes that food is one-third of a family’s budget. The Standard is based on the costs of all basic needs of a working family—not just food, but also housing, child care, health care, transportation, miscellaneous costs, plus taxes and tax credits. Unlike the FPL’s one-size-fits-all model, these costs vary, not just by the size of the family and number of children, as with the FPL, but also by the age of the children, as some costs, particularly child care, differ dramatically by age. Finally, while the FPL is the same no matter where one lives the Standard varies for each county or area in a state.
The Self-Sufficiency Standard calculates the amount of income a given family would need to cover all of their basic needs without public or private supports. “Living wage” ordinances require public entities—such as a city or county government, as well as sometimes private businesses contracting with the government—to pay their employees a “living wage.” Across the country, “living wages” have ranged anywhere from $9.00 to $16.00 an hour, with many requiring businesses to pay a higher wage if health insurance is not provided to the employee. Twenty-nine states plus the D.C. have minimum wage rates higher than the federal minimum wage of $7.25 per hour. The highest, Washington, is $13.50 per hour.
The Standard has been calculated for 38 states, Washington D.C. and New York City. Standards are available for Alabama, Arizona, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maryland, Massachusetts, Mississippi, Missouri, Montana, Nebraska, Nevada, New Jersey, New York City, New York State, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, Washington State, West Virginia, Wisconsin, Wyoming, and the Washington, D.C. metropolitan area.
No. The Self-Sufficiency Standard sets a goal for workers. Achieving self-sufficiency is a process that involves not just finding a job with certain wages and benefits, but achieving income security over time. There are several ways—separately or in combination—that workers can achieve self-sufficiency. They can receive temporary work supports until their wages increase. In addition, they can obtain training and/or education that will prepare them for higher-wage jobs. Finally, they can combine low-wage jobs with self-employment initiatives.
Yes, sometimes it is unrealistic. Yet it is reasonable to hold employers responsible for paying decent wages and providing benefits, such as health insurance and benefits to their workers. At the same time, employers are only one of several stakeholders who have a role in ensuring that families have incomes sufficient to cover their costs. The government has a role in ensuring that job training and education, as well as work supports such as child care assistance, are affordable and accessible to families. Individuals are responsible for taking advantage of opportunities to invest in themselves and their potential.