What it is and Why it Works
The Self-Sufficiency Standard calculates how much income working adults need to meet their basic needs without subsidies of any kind. Unlike the federal poverty standard, the Self-Sufficiency Standard accounts for the costs of living and working as they vary by family size and composition and by geographic location.
The Standard defines the amount of income necessary to meet basic needs (including paying taxes) in the regular “marketplace” without public subsidies-such as public housing, Food Stamps, Medicaid or child care-or private/informal subsidies-such as free babysitting by a relative or friend, food provided by churches or local food banks, or shared housing. The Standard, therefore, estimates the level of income necessary for a given family type-whether working now or making the transition to work-to be independent of welfare and/or other public and private subsidies.
- The Standard assumes that all adults (whether married or single) work full-time and includes the costs associated with employment, specifically, transportation and taxes, and for families with young children, child care.
- The Standard takes into account that many costs differ not only by family size and composition (as does the official poverty measure), but also by the age of children. While food and health care costs are slightly lower for younger children, child care costs are much higher-particularly for children not yet in school-and are a substantial budget item not included in the official poverty measure.
- The Standard accounts for regional variations in cost. This feature is particularly important for housing. Housing in the most expensive areas of the country costs four times as much as in the least expensive areas for equivalent size units.
- The Standard includes the net effect of taxes and tax credits. It provides for state sales taxes, as well as payroll (Social Security) taxes, and federal and state income taxes. Two credits available to working adults, the Child Care Tax Credit (CCTC) and the Earned Income Tax Credit (EITC) are “credited” against the income needed to meet basic needs-thus reducing the income needed to become economically self-sufficient.
The Self-Sufficiency Standard Tool Kit: How the Standard Can Be Used
The Self-Sufficiency Standard is relevant to a range of issues and arenas, providing crucial information about wage adequacy to help design strategies for self-sufficiency. The Standard can be used in a variety of settings-from the welfare client choosing the best path out of poverty for herself and her family, to organizations weighing investment in various education and training opportunities, to state-level policymakers facing critical policy choices on tax policy, subsidies, welfare-to-work programs, economic development plans, education and training.
At a time when many policy and programmatic decisions are being made at the state and local levels, the Standard provides a tool and a means to evaluate many different options. The discussion below should be seen as a partial list, as new uses and applications of the Standard continue to emerge.
The Self-Sufficiency Standard as a Policy Tool
The Self-Sufficiency Standard has a number of uses in the development and evaluation of policy in different areas. The Standard is a key component, for example, in the Targeting Higher-Wage Employment Strategy. This strategy uses the Standard to assess the ability of various jobs, occupations and sectors to provide self-sufficiency wages for workers. When combined with analysis of the current local labor market supply and demand (to determine jobs that have expanding but unfilled openings), an assessment of the available job training and education infrastructure, and an evaluation of the skills and location of current/potential workers.
The Standard has also been used to evaluate the impact of proposed policy changes such as restructuring subsidy programs, changing co-payment schedules or implementing policy reforms. With the Standard it is possible to not only show the direct impact of policy changes on family incomes, but to model the interaction effects of taxes, tax credits, and, where applicable, subsidies.
The Standard can also be used to target education and job training investments and can help make the case for investing in various types of post-secondary education. Education and training beyond high school provides access to a wide range of jobs paying self-sufficiency wages, and the broad range of skills that enable workers to move into jobs created by rapidly developing new technologies.
The Self-Sufficiency Standard as a Guideline for Wage-Setting
By determining the wages needed to meet basic needs, the Standard provides information for setting minimum and living wage standards. It was used precisely this way by the Center for the Child Care Workforce, which developed specific guidelines for each county/school district in California for child care workers’ salaries. It has also been used by private agencies, such as community action agencies, to evaluate the adequacy of their own salary schedules.
The Self-Sufficiency Standard as a Benchmark for Evaluation
The Standard can be used to evaluate outcomes for a wide range of programs that result in employment, from short-term job search and placement programs, to programs providing extensive education and/or job training. Such evaluations can help redirect resources to the types of approaches that result in improved outcomes for participants.
The Self-Sufficiency Standard as a Counseling Tool
The Standard can be used as a counseling tool, to help participants in work and training programs make choices among various occupations and jobs. The Pennsylvania Family Economic Self-Sufficiency (PAFESS) Project has worked with over 1,200 case managers and social service administrators across the state to use the Self-Sufficiency Standard as a counseling tool to demonstrate the real costs of becoming economically independent. Through use of the Standard, PAFESS has encouraged social service providers to talk about higher-wage and nontraditional jobs and the importance of career ladders with their clients.
The Self-Sufficiency Standard Budget Worksheet and Calculator
The Standard has also been used to develop the Self-Sufficiency Standard Budget Worksheet, completed in Pennsylvania, which is a tool that counselors and clients can use to “test” the ability of various wages to meet a family’s self-sufficiency needs. The Worksheet facilitates a dialogue between counselor and client around choice of an initial job, job training opportunities and career paths. With the information provided by the Standard, clients can make informed decisions about what kinds of training would most likely lead to self-sufficiency wages, which jobs would best provide the resources they need, and what types of Microenterprise or Individual Development Account strategies may, alone or together with paid employment, provide a path to self-sufficiency for themselves and their families. Organizations in New York City, the State of Illinois, and Seattle-King County have transformed the Budget Worksheet into an online tool known as a Self-Sufficiency Calculator, broadening access to this critical tool.