When Joyce Peach started working... her welfare benefits ceased. With her new $24,000-a-year position, she was no longer eligible for public subsidies.
In fact, her salary surpassed the federal poverty level by almost $10,000. But nevertheless, Peach found that her paychecks failed to cover basic needs for her and her teenage daughter.
So she left that job after a year, landing a $26,800-a-year job... But the extra $2,800 didn't forestall her financial unraveling.
She realized she was better off financially when she was on welfare. "I didn't have to worry about how I would pay rent, the bills or buy food. I had economic security."
The baffling reality of Peach's situation is borne out in "The Basic Economic Security Tables for the United States," a report prepared by Wider Opportunities for Women... The study was conducted to determine how much income is actually needed to attain economic security without government assistance.
For Peach's family size, $24,000 a year can't buy economic security; neither can $26,800. She and her daughter would need $42,504 to be secure, according to the BEST Index report. The federal poverty guideline for a household of two, meanwhile, is currently $14,710.
According to the report, in order to be financially secure, single workers would need $30,012 a year; single parents with two children would need $57,756; and two-parent households with two children would need $67,920.
The current poverty level is $10,890 for a one-person family...
The BEST Index aims to gauge what is needed for economic security, not just survival, so it includes expenses like housing, utilities, food, health care, transportation and child care. They even include savings for retirement and emergencies.
By the BEST Index's standards, Linsey Graff appears to be on the cusp of self-sufficiency. The 26-year-old architect is single and earns about $30,000. But she works two jobs, and says she is often exhausted and broke.
"I break even every month," the Buffalo resident said. "I can cover all of my bills, but then there's nothing left."
She said she has no money for emergencies or contributing to retirement savings.
"I'm working just to pay bills, and that's my life right now," she said.
Graff has no credit card debt, but she makes hefty monthly student loan payments for her college education, which includes a master's degree from UB.
Money worries plague her, along with fears of unexpected expenses, such as car repairs.
For people like Peach and Graff, financial security can appear to be an elusive goal. The BEST study points out that improved wages, stronger economic development and financial education are all needed to improve the lives of working people.[*]
-excerpts from an article by Emma Sapong of The Buffalo News
[*economic reality was ignored for WOW's BEST Index study...]