Economic insecurity rising, new indicator shows
More than one in five Americans experienced economic insecurity during the recession, meaning they had an economic loss without an adequate safety net to replace that loss, according to a new report from the Rockefeller Foundation. The report also found that economic insecurity has been rising since even before the recession.
"While the Great Recession led to a sharp increase in income instability, the share of Americans experiencing economic insecurity had already been growing for a quarter of a century," said Jacob Hacker, director of the Institution for Social and Policy Studies at Yale.
A separate report from Wider Opportunities for Women found that 45% of Americans are unable to cover their basic expenses, and that some households face economic insecurity even when its members are working.
The Rockefeller Foundation report updates the Economic Security Index, an indicator developed by Hacker. The index measures the share of Americans who see their incomes drop 25% or more after they pay for household and medical debts, and who lack a way to replace that income.
During the most recent downturn, 20.5% of Americans were economically insecure, the index shows, compared to 14.3% in 1986.
While economic insecurity will likely decline as the recovery progresses, the report finds that Americans are more subject to sharp swings in their financial fortunes than they were two decades ago. And if federal unemployment benefits are allowed to expire on Dec. 31, as they will unless Congress renews them, economic insecurity could get worse before it gets better.
-- Alana Semuels
Photo: Men in a bread line. Credit: Kheel Center, Cornell University