How much does a person or family need to earn if they’re going to break the cycle of poverty and build a Cycle of Success?
For more than 50 years, our country has been calculating poverty based on one number: the monthly cost of food. Back in 1963, food was typically the single biggest cost a family faced, so that made sense. But the pressures on today’s household budgets come not just from food, but also from housing, transportation, childcare, healthcare and more. We need a new way to calculate how much a person or family really needs in order to be financially stable.
And now we have one—the South Carolina Self-Sufficiency Standard. It’s a localized measure of cost-of-living, updated for the modern working family. Rather than using only the monthly cost of food as its basis, as the Federal Poverty Level does, the Self-Sufficiency Standard is based on all major budget items for working adults, including housing, childcare, food, healthcare, transportation, taxes, and other miscellaneous costs. And it calculates these costs regionally.
So since rent varies from city to city, the Self-Sufficiency Standard uses localized average rent costs rather than a state average. It also calculates childcare costs based on a child’s age, so childcare for an infant is calculated differently than childcare for school-age children. While the Federal Poverty Level assumes a two-person household with one stay-at-home parent, the Self-Sufficiency Standard has 70 different family models to choose from so that working families can be sure the information they get from using the Self-Sufficiency Standard applies to their specific circumstances.
How could this be useful for a working family?
Well, say John Doe was offered a job at BMW, but he’s been living in rural Greenwood County and doesn’t know what the cost of living will be in Greenville. Now he’ll be able to calculate exactly how much he needs to make using a cost-based model to determine whether or not accepting the job and making the move makes good financial sense.
This standard can also be very useful for lawmakers trying to recruit new industries to South Carolina. Using the calculations of the Self-Sufficiency Standard, lawmakers would know exactly what kinds of wages are needed in specific parts of the state, and could tie tax credits to new businesses’ willingness to meet or exceed the levels set by the standard.
On Jan. 20, United Way volunteers and staff will travel to Columbia to introduce the brand-new South Carolina Self-Sufficiency Standard to legislators. Now, every community in the state will know exactly how much residents need to earn to be financially stable. This will help working families make financial decisions about where they live and what kinds of jobs to take, as well as help young people determine what types of education to pursue in order to earn the kind of income needed to live in any county across the state.
For more information on the Self-Sufficiency Standard, please click here or join us in Columbia on Jan. 19 in the State House Lobby to hear more about the Self-Sufficiency Standard in South Carolina. You can register for this event by clicking here.