Q: What is the Self-Sufficiency Standard for Wisconsin?
A: The Self-Sufficiency Standard for Wisconsin defines the income working families need to meet their basic needs without public or private assistance. Basic needs include: housing, child care, food, transportation, health care, miscellaneous expenses (clothing, telephone, household items), and taxes (minus federal and state tax credits). The Standard is calculated for 70 different family types in each of Wisconsin’s county and sub-county areas.
Q: How is the Self-Sufficiency Standard Different from the Official Federal Poverty Measure?
A: The federal poverty level (FPL) is a 4-decades-old calculation based the cost of food. The FPL also assumes that food is one-third of a family’s budget, no matter where that family lives. The Standard is based on the costs of all basic needs of a working family-food, but also housing, child care, health care, transportation and miscellaneous costs, plus taxes and tax credits. Unlike the poverty standard’s one-size-fits-all model, these costs vary, not just by the size of the family and number of children, as with the FPL, but also by the age of the children. Some costs, particularly child care, differ dramatically by age. The FPL is indexed for inflation every year while the Standard can be updated yearly allowing the cost of each basic need to increase at its own rate. Finally, the Standard is more geographically specific than the FPL, varying by state and by county.
Q: Where Does the Data Come From?
A: In general, for each category, data are collected or calculated using standardized or equivalent methodology; come from scholarly or credible sources, such as the U.S. Bureau of the Census; are updated at least annually; and are age- and/or geographically-specific (where appropriate).
Q: How is the Self-Sufficiency Standard Calculated?
A: First, the basic costs for each family type (which vary by number and age of children, and by number of adults) are added in each county or metropolitan statistical area. Ten percent of this total is added to account for miscellaneous costs. Second, taxes and tax credits are calculated using formulas that are specific with regard to state income and sales tax. Finally, the total income is checked for certain assumptions in the model-such as whether the proper Child Care Tax Credit rate has been used-and adjusted as appropriate.
Q: Aren’t the Self-Sufficiency Wages “too high”?
A: No. Because the Self-Sufficiency Standard is calculated using the real costs of goods and services purchased in the regular marketplace, it reflects the real expenses consumers face. The Standard is a no-frills budget that does not allow for entertainment, carry out or fast food (not even a pizza), savings, or emergency expenses such as car repairs. Obviously, many families lack a Self-Sufficiency level income and manage to survive. If they do, however, it means that they are getting help meeting their needs with public or private subsidies, and/or they are foregoing one or more needs-using less desirable child care, doubling-up or living in substandard housing, obtaining free food or doing without, or not obtaining needed medical care.
Q: Isn’t the Self-Sufficiency Standard Unrealistic for Most Welfare Recipients Entering Employment?
A: No, the Self-Sufficiency Standard sets a goal for welfare recipients. Achieving self-sufficiency is a process that involves not just finding a job with certain wages and benefits, but achieving income security over time. There are several ways-separately or in combination-that welfare recipients can achieve self-sufficiency. First, they can receive temporary subsidies until either their wages increase, or as is the case for child care, their needs decrease. (By definition, preschool children will “age out” of need for full-time care in just a few years.) Second, they can obtain training and/or education that will prepare them for high-wage jobs. Third, they can combine low-wage jobs with self-employment initiatives.
Q: Do You Expect Employers to Pay Workers These Wages?
A: Not entirely. Employers are only one of several stakeholders that have a role in ensuring that families have incomes sufficient to cover their costs. The government has a role in ensuring that job training and education, as well as work supports like child care, are affordable and accessible to families. Individuals are responsible for taking advantage of opportunities to invest in themselves and their potential. And finally, employers are responsible for paying decent wages and providing benefits, such as health insurance, transportation assistance, and benefits to their workers.
Q: What is the difference between a “living wage” and the Self-Sufficiency Standard?
A: The Self-Sufficiency Standard calculates the amount of income a given family would need to cover all of their basic needs without public or private supports. Decent wages are essential to moving families to self-sufficiency incomes. Employers have a responsibility to pay their workers fairly, provide benefits, such as health care coverage, and make career ladders visible to entry-level workers. In some cases, however, wages alone may not be enough for families to reach self-sufficiency incomes. Work supports—like child care and transportation assistance—can play a critical role in helping families make ends meet while they gain experience and skills to move to better paying jobs.
Living wage ordinances require private businesses that benefit from public money to pay their employees a “living wage.” Across the country, “living wages” have ranged anywhere from $6.25 to $12.00 an hour, with many requiring businesses to pay a higher wage if health insurance is not provided to the employee. The Self-Sufficiency Standard for Wisconsin can serve as a strong data source for living wage campaigns as evidence of the real cost of living in a community. It can be used to persuade government officials, business owners and community members about the necessity for living wage ordinances in their community.
Q: How Can the Self-Sufficiency Standard Be Used?
A: The Standard has been used by government, advocates and service providers to assess and to change policies and programs in a number of ways including: as a benchmark to measure effects of programs and policies; to demonstrate the impact of policy alternatives; to identify and help parents move into higher-wage jobs; and to change how welfare and workforce development caseworkers counsel clients.
Example-As a Benchmark to Measure Effects of Programs and Policies: In Massachusetts the Standard has been used to evaluate whether families are making ends meet. The Massachusetts Family Economic Self-Sufficiency Project (MASS-FESS)-the Massachusetts arm of the Family Economic Self-Sufficiency Project led by the Women’s Educational and Industrial Union-released a report on how families are faring in relation to the Standard. It estimated the number of families with incomes above and below the Standard. MASS-FESS generated the estimates by comparing Census household income data to the Standard and adjusting for inflation and for the area in which the community is located. By supplying a clearer picture of who is making it and who is not, the report broadens the discussion about whether welfare reform in Massachusetts is really working.
One in four Massachusetts’ families had an income below the Standard. These families were working hard, yet still struggling to get by. The report showed that single-parent families had the most difficulty making ends meet-they were about twice as likely to have incomes below the Standard as two-parent families.
Example-Demonstrating the Impact of Current and Proposed Public Policy Alternatives: The Pennsylvania Family Economic Self-Sufficiency Project-the Pennsylvania arm of the Family Economic Self-Sufficiency Project and led by the Women’s Association for Women’s Alternatives-used the Standard to assess how increasing child care co-payments change a family’s ability to cover its costs. The report modeled not only the existing and proposed co-payments but also the interactive effects of other potential income supports, such as Food Stamps and Medicaid, for a low-income family in the Philadelphia area.
The report demonstrated that at each income level the proposed changes in child care subsidies would increase parental co-payments. The proposed changes would have a substantial impact on a family’s wage adequacy, especially for families with incomes above the federal poverty line, yet below the Self-Sufficiency Standard.
Example-Targeting Higher-Wage Sectors of the Economy: A project outside Philadelphia, Pennsylvania, shows how the Standard can be used to decide in which sectors of the economy to direct job training resources. As part of the Pennsylvania Family Economic Self-Sufficiency Project, the Women’s Association for Women’s Alternatives, in partnership with the Delaware County Legal Assistance Association, the Delaware County Office of Employment and Training, and Wider Opportunities for Women is involved in a project to direct employment-related resources toward moving low-income workers into the jobs that pay Self-Sufficiency Wages, and are in demand by employers and the community-thus better connecting low-income job seekers to good jobs.
The Standard is a key component in this strategy, which identifies well-paying jobs in sectors that are growing, but have too few trained workers. The Standard is used as a benchmark against which to compare the wages of various jobs to determine whether they will provide workers enough income to cover their costs. The Standard is used with an analysis of the current local labor market supply and demand; an assessment of the job training and education infrastructure; and an evaluation of the skills and location of current or potential workers.
Example-Changing How Welfare and Workforce Development Caseworkers Counsel Clients: The Pennsylvania Family Economic Self-Sufficiency Project piloted the first Self-Sufficiency Standard Budget Worksheet for Pennsylvania. The worksheet is now also being used in D.C. and being developed in New York City and South Dakota. This innovative worksheet starts with the figures in the Self-Sufficiency Standard and then lets an individual plug in her actual costs and see if different wages will allow her to meet her needs. It also incorporates various subsidies, depending on eligibility, which reduce costs and make a given wage more adequate for meeting a family’s needs. The Worksheet, initially developed as a “paper-and-pencil tool, is now an interactive computer-based program for frontline welfare and workforce development caseworkers to use as a career counseling tool. The worksheet informs both counselors and clients about available subsidies and supports.
Q: Does the Report have Implications for Federal Reauthorization of the Welfare Law?
A: Yes. As Congress considers reauthorizing the welfare law, it has the opportunity to use the Self-Sufficiency Standard to change the welfare discussion: from one just about reducing the number of people on the welfare rolls, to one about the quality of life for people on and off the rolls. The Standard can be used to demonstrate the importance of access to education and training; to demonstrate why new workers need work supports by showing how wages and supports-like child care, food stamps, health care-fit together to help families on their path to economic independence; and to assess whether states are meeting the federal law’s goal of moving families to self-sufficiency.
Q: Who Produced the Report?
A: The Self-Sufficiency Standard for Wisconsin was produced through a partnership of Wider Opportunities for Women (WOW), Dr. Diana Pearce at the University of Washington, and the Wisconsin Women’s Network (WWN). WWN convened the Wisconsin Self-Sufficiency Standard Advisory Committee-a committee that has worked on report’s production and who will implement the Standard in the coming months and years.
This work is part of the national Family Economic Self-Sufficiency project, convened by WOW, to provide state-level advocates and governments with tools to help them strengthen government investments in low-income families.
Q: Have Other States Calculated Self-Sufficiency Standards?
A: Yes. WOW and the University of Washington have worked with state-level groups in a total of 35 states and the District of Columbia to develop Self-Sufficiency Standards. These states are: IA, CA, DC, TX, NC, PA, IL, LA, MA, IN, NY, NJ, CT, SD, WI, CO, WA, UT, KY, MD, MT, OK, NV, AZ, WV, TN, GA, VA, FL, MO, NE, DE, AL, MS and HI. Across the country, state-level coalitions have used the Standard to change policies and programs to help families move out of poverty and to economic self-sufficiency.
For more information about or copies of The Self-Sufficiency Standard for Wisconsin, contact the Wisconsin Women’s Network at: 608-255-9809 or email@example.com