BUFFALO, N,Y. -- A University at Buffalo School of Social Work
professor is helping redefine the country's definition of being
poor with research that shows the dramatic difference between
achieving "basic economic security" and the federal government's
Yunju Nam, PhD, assistant professor at the UB School of Social
Work, is one of three lead authors for research that concluded with
the Basic Economic Security Table or BEST Index, a report prepared
jointly by Wider Opportunities for Women (WOW), the Center for
Social Development (CSD) at Washington University in St. Louis and
the UB School of Social Work.
The BEST report concludes that single workers need more than
$30,000 a year for economic security. Single-parents with two
children need nearly twice the income ($57,756) to cover basic
expenses and save for emergencies and retirement, while dual-income
households with two children require $67,920.
These figures are well above -- sometimes several times --
traditional measurements like the poverty line and minimum wage
designed to show what workers require for a basic standard of
living. The 2010 national poverty level is $10,830 for a
single-person family and $18,310 for a family of three.
The report, released April 1, has attracted widespread attention
in the mainstream media, including substantial articles or
treatments in the New York Times, CBS MoneyWatch, the "Today Show,"
the Atlantic, the Huffington Post and the San Francisco Chronicle.
Many of the articles have concentrated on how low-wage jobs, which
are often reported by the U.S. Department of Labor as evidence of
employment growth or possibilities, fail to pay enough to meet
these basic needs.
The BEST Index is different from the federal poverty measure in
that it takes into account actual spending for necessary items
(e.g., food, housing, transportation and child care) for a family
to meet its basic needs. In contrast, the federal poverty measure
is calculated based solely on food cost. Accordingly, BEST captures
changing economic needs in a rapidly changing contemporary economy,
the researchers say.
The BEST Index also differs from other "economic well-being"
indexes in that it aims to capture what is needed for household
stability and development rather than focusing on subsistence, Nam
explains. Therefore, the BEST Index includes saving components such
as emergency savings, retirement savings, education savings and
homeownership savings that are essential for long-term economic
security and household development, she points out.
"Meeting basic monthly living expenses alone leaves a family
short of genuine financial stability," says Nam. "Workers must
develop assets to attain both short-term and lifelong economic
security. However, past policy and scholarly discussion on economic
well-being measures focused solely on consumption needs. The BEST
therefore provide a new perspective on economic needs by showing
how much workers need to meet both consumption and saving needs for
According to the BEST, the amount of savings needed for a
family's long-term security is moderate if a family saves regularly
for long-term. Emergency savings are a small part of BEST budgets
(3-4 percent). Retirement savings of $73 per month per worker or
$56 per couple greatly increases the chances of maintaining basic
economic security in retirement.
"The problem is many families do not make enough income to meet
their basic consumptions and saving needs, especially among
single-parent families," according to Yung Soo Lee, one of the lead
authors of the BEST at the CSD. "In addition, low saving rates in
the United States indicate that even families with enough income do
not save enough for their long-term economic security and
To solve problems of low income and low saving rate, Nam says
policy intervention is essential.
"I believe that the BEST Index is the first step for the policy
paradigm change, a shift from focus on consumption to emphasis on
long-term economic security and development," she says. "By showing
how much a family needs for their basic consumption and asset
accumulation for long-term development, the BEST sets a new and
higher standard for social and economic policy in the United
The index is intended for use by policymakers, researchers and
policy advocates concerned with national policy needs and with
changes in workers' and families' needs over time. The savings
components incorporated in the BEST suggest the importance of asset
building for household development and stability.
WOW is a nonprofit group based in Washington, D.C., advocating
economic independence and opportunity equality for women and their
families. CSD is a research institute whose aim is to create and
study innovations in public policy for individuals, families and
communities, especially for disadvantaged groups.
The University at Buffalo is a premier research-intensive public
university, a flagship institution in the State University of New
York system and its largest and most comprehensive campus. UB's
more than 28,000 students pursue their academic interests through
more than 300 undergraduate, graduate and professional degree
programs. Founded in 1846, the University at Buffalo is a member of
the Association of American Universities.