For the Monitor
Tuesday, March 29, 2016
If you’ve ever been out for hike, you know it can happen. You’ve been trudging along for a few hours and the top of the mountain finally seems within reach. Yet, after climbing farther, you realize it was only a false summit hiding the true peak; you’ve actually still got a long way to go to reach your goal.
When it comes to ensuring greater economic security, New Hampshire has a false summit problem, too. At 9.2 percent, New Hampshire’s poverty rate was the lowest in the nation in 2014, the most recent year for which such data is available. However, because of flaws in the way the federal government measures poverty, that relatively positive news hides just how much further New Hampshire must go before everyone in the Granite State can truly make ends meet.
Consider that, in 2014, the income level at which a single person was no longer considered poor in our country was just over $12,300. For a family of four, the corresponding threshold was a little more than $24,000. All it takes is a moment’s reflection on the expenses we incur in our own lives each day to appreciate just how low those thresholds are – and by extension, how inadequate federal poverty statistics are for understanding what it really takes for Granite State families just to get by.
Analysts at the Economic Policy Institute, a Washington, D.C.-based think tank, have devised an alternative measure of need that provides a more comprehensive assessment of the incomes families need to be able to secure life’s necessities. Referred to as a “basic family budget,” this measure seeks to remedy the two principal shortcomings of the federal poverty threshold. It reflects not only the actual costs families encounter in purchasing basics like food, clothing, shelter, health care and child care, but also geographic variations in those costs.
EPI’s findings for New Hampshire are revealing. Under its basic family budget calculations, a single person living in the Concord area needs an income of close to $31,600 per year to be able to afford rent, groceries and other essentials. That’s more than 2½ times the income at which the same person would be considered poor. The gap is even larger for families. The basic family budget for a two-parent, two-child family in the Concord area amounts to about $67,932 – almost three times the official poverty level.
EPI’s research also underscores how much more expensive it can be to live in the Granite State than in other places across the country. For example, EPI devised basic family budgets for 618 distinct communities across the country. For a family of three, only about one out every five of those communities had a higher cost of living than in Concord and other parts of the state.
In its new paper, “Taking the measure of need in the Granite State,” the New Hampshire Fiscal Policy Institute explores EPI’s basic family budget findings for four key family types in various regions of the state and builds upon the data to try to understand whether jobs here in New Hampshire allow families to meet their basic needs.
To be sure, wages and salaries can be higher here in New Hampshire than elsewhere, but it’s likely that a significant share of the jobs available in the state leave workers unable to achieve a modest standard of living. Based on EPI’s research, as well as data from the Occupational Employment Statistics survey, NHFPI estimates that about one-third of all jobs in New Hampshire pay less than what a single person would need to reach his or her basic family budget; as many as two-thirds of all jobs fail to pay enough for a single parent with one child to do so. Indeed, the typical wage in some of the most common jobs in the state – whether retail sales positions, waiters and waitresses, janitors, or cashiers – simply is insufficient to enable workers to secure even just the basics.
Unfortunately, a single solution to the challenges facing working Granite Staters does not exist. Rather, in the years ahead, the task before policymakers will be to identify and to implement a combination of reforms to help families make ends meet, both by bolstering incomes and by bringing the costs of basic necessities within closer reach. That kind of comprehensive strategy should aim to help people acquire the skills and education they need to find and to keep a job, remove barriers to full participation in the workforce, and ensure that everyone receives a fair day’s pay for a fair day’s work.
The journey toward economic security is an endless climb for far too many Granite Staters. They work tirelessly each day, but remain unable to meet their most immediate needs, much less achieve their longer-term financial goals – saving for retirement, sending their kids to college or purchasing their own home. New Hampshire’s future will depend upon our ability to clear the path and ensure that economic stability remains achievable and within reach.
(Jeff McLynch is executive director of the New Hampshire Fiscal Policy Institute based in Concord.)