Dec 8, 2022

Charles serves as CCLP's Income and Housing Policy Director using data and research to support our efforts to stand with diverse communities across Colorado in the fight against poverty. Staff page ›

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Reintroducing the Self-Sufficiency Standard

by | Dec 8, 2022

Although it is the primary metric used in the United States to evaluate economic need, the official poverty measure no longer provides an accurate picture of what households need to support themselves and their families. At best, the poverty rate gives us a picture of who is struggling the most to make ends meet. We know this by looking at an alternative approach to measuring economic security, known as the Self-Sufficiency Standard.  

The Standard takes what is known as a basic needs budget approach—in other words, it estimates a household’s costs across seven different areas (housing, child care, food, transportation, health care, miscellaneous expenses, and tax, minus tax credits) and adds up those costs to arrive at the hourly, monthly, or annual income needed in order for the household to cover all of these expenses. What also sets the Self-Sufficiency Standard apart from the official poverty measure is that it assumes different costs for different families — both by the age and number of household members, and by the county in which a household lives. This granularity gives us much more accurate estimates that reflect the actual costs of basic needs and variations in cost of living across Colorado. In contrast, the official poverty measure simply assumes basic needs are three times the cost of food, and that those costs are uniform across the state. 

charts comparing the factors in the official poverty measure and the self-sufficiency standard

Comparing the monthly income needs arrived at by the official poverty measure and the Self-Sufficiency Standard for a family of 2 adults, 1 infant, and 1 preschooler living in Douglas County in 2022 illustrates just how different these approaches are—as are the stories they tell about economic insecurity in Colorado.  

The OPM estimates this family would need $2,313 in monthly income to meet their needs—the Self-Sufficiency Standard estimates the monthly income needs of this family would be $9,995 that same year. In other words, a poverty wage for this household would only allow them to cover 23% of their monthly income needs as estimated by the Self-Sufficiency Standard. Indeed, a poverty wage would just barely allow this family to afford the cost of child care or housing and would leave no money left over for other expenses. In 2019, 24.9% of Colorado households with at least one adult between the ages of 18 and 64 with no work-limiting disability had incomes below the Self-Sufficiency Standard for their household type and county. On the other hand, 7.4% of households had incomes below the official poverty measure that same year. 

The Self-Sufficiency Standard estimates the income needed by households without assistance from public benefit programs, such as Medicaid or the Supplemental Nutrition Assistance Program (SNAP). In reality, these work support programs can play an important role in helping Colorado families meet their basic needs. For example, a household consisting of one adult, one preschooler, and one school-age child would need to earn $5,477 per month to cover their basic needs living in Pueblo County. With the support of a suite of work supports and public programs, the income needed by this family can be reduced to $2,590 per month, a much more attainable expectation for a single income household.  

However, these work supports are not available to all who need them. Since most programs use the official poverty measure to determine eligibility, households which may not earn enough to cover their expenses might also not be eligible for the program that would help them cover those expenses. In other cases, enrollment in a program, like the Housing Choice Voucher program, is limited by program funding. The Self-Sufficiency Standard illustrates how a robust and efficient public support program can be an invaluable resource for helping families move to self-sufficiency—and how a meager and inefficient system can fail those same families. 

Since 2001, Colorado Center on Law and Policy has been fortunate to be able to work with the University of Washington, the stewards of the Self-Sufficiency Standard, to publish income need estimates for Colorado. With nearly two decades worth of data, we can look back to see how income needs have changed in Colorado relative to other measures, such as inflation or median earnings. Since 2001, a household consisting of two adults, one preschooler, and one school-aged child has seen their income needs increase by an average of 124% (when averaged across all counties in Colorado). Health care and child care costs outpaced other costs, increasing by 176% and 139%, respectively between 2001 and 2022. Notably, median earnings for workers in Colorado increased by 64% over this same period, meaning that households have seen costs increase faster than incomes. This was true even before the period of high inflation we’ve experienced over the past two years. 

A lot has changed in Colorado since 2018, and we are pleased to be able to release an update to the report after more than two years of tremendous economic and social disruption. As we continue our recovery from the COVID-19 pandemic and navigate the economic challenges that have arisen since, it is fundamental to understand Coloradans’ income needs that is grounded in the actual costs facing our families. Not only does the latest SSS report give us a more realistic picture of who is struggling to make ends meet, it also allows us to understand how costs have changed over time, and where we might intervene with policies or programs to support Coloradans in their journey to self-sufficiency. We hope that this report will serve as a resource for the entire anti-poverty movement in Colorado and look forward to partnering with or assisting any groups or organizations that are interested in learning more about the Self-Sufficiency Standard and how it can be used as a tool to advance economic security for all Coloradans. 

 

Click here to download the Self-Sufficiency Standard report.

Recent articles

HEALTH:
HEALTH FIRST COLORADO (MEDICAID)

To maintain health and well-being, people of all ages need access to quality health care that improves outcomes and reduces costs for the community. Health First Colorado, the state's Medicaid program, is public health insurance for low-income Coloradans who qualify. The program is funded jointly by a federal-state partnership and is administered by the Colorado Department of Health Care Policy & Financing.

Benefits of the program include behavioral health, dental services, emergency care, family planning services, hospitalization, laboratory services, maternity care, newborn care, outpatient care, prescription drugs, preventive and wellness services, primary care and rehabilitative services.

In tandem with the Affordable Care Act, Colorado expanded Medicaid eligibility in 2013 - providing hundreds of thousands of adults with incomes less than 133% FPL with health insurance for the first time increasing the health and economic well-being of these Coloradans. Most of the money for newly eligible Medicaid clients has been covered by the federal government, which will gradually decrease its contribution to 90% by 2020.

Other populations eligible for Medicaid include children, who qualify with income up to 142% FPL, pregnant women with household income under 195% FPL, and adults with dependent children with household income under 68% FPL.

Some analyses indicate that Colorado's investment in Medicaid will pay off in the long run by reducing spending on programs for the uninsured.

FOOD SECURITY:
SUPPLEMENTAL NUTRITION ASSISTANCE PROGRAM (SNAP)

Hunger, though often invisible, affects everyone. It impacts people's physical, mental and emotional health and can be a culprit of obesity, depression, acute and chronic illnesses and other preventable medical conditions. Hunger also hinders education and productivity, not only stunting a child's overall well-being and academic achievement, but consuming an adult's ability to be a focused, industrious member of society. Even those who have never worried about having enough food experience the ripple effects of hunger, which seeps into our communities and erodes our state's economy.

Community resources like the Supplemental Nutrition Assistance Program (SNAP), formerly known as Food Stamps, exist to ensure that families and individuals can purchase groceries, with the average benefit being about $1.40 per meal, per person.

Funding for SNAP comes from the USDA, but the administrative costs are split between local, state, and federal governments. Yet, the lack of investment in a strong, effective SNAP program impedes Colorado's progress in becoming the healthiest state in the nation and providing a better, brighter future for all. Indeed, Colorado ranks 44th in the nation for access to SNAP and lost out on more than $261 million in grocery sales due to a large access gap in SNAP enrollment.

See the Food Assistance (SNAP) Benefit Calculator to get an estimate of your eligibility for food benefits.

FOOD SECURITY:
SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS AND CHILDREN (WIC)

Every child deserves the nutritional resources needed to get a healthy start on life both inside and outside the mother's womb. In particular, good nutrition and health care is critical for establishing a strong foundation that could affect a child's future physical and mental health, academic achievement and economic productivity. Likewise, the inability to access good nutrition and health care endangers the very integrity of that foundation.

The Special Supplemental Nutrition Program for Women, Infants and Children (WIC) provides federal grants to states for supplemental foods, health care referrals, and nutrition information for low-income pregnant, breastfeeding and non-breastfeeding postpartum women and to infants and children up to age five who are found to be at nutritional risk.

Research has shown that WIC has played an important role in improving birth outcomes and containing health care costs, resulting in longer pregnancies, fewer infant deaths, a greater likelihood of receiving prenatal care, improved infant-feeding practices, and immunization rates

Financial Security:
Colorado Works

In building a foundation for self-sufficiency, some Colorado families need some extra tools to ensure they can weather challenging financial circumstances and obtain basic resources to help them and their communities reach their potential.

Colorado Works is Colorado's Temporary Assistance for Needy Families (TANF) program and provides public assistance to families in need. The Colorado Works program is designed to assist participants in becoming self-sufficient by strengthening the economic and social stability of families. The program provides monthly cash assistance and support services to eligible Colorado families.

The program is primarily funded by a federal block grant to the state. Counties also contribute about 20% of the cost.

EARLY LEARNING:
COLORADO CHILD CARE ASSISTANCE PROGRAM (CCCAP)

Child care is a must for working families. Along with ensuring that parents can work or obtain job skills training to improve their families' economic security, studies show that quality child care improves children's academic performance, career development and health outcomes.

Yet despite these proven benefits, low-income families often struggle with the cost of child care. Colorado ranks among the top 10 most expensive states in the country for center-based child care. For families with an infant, full-time enrollment at a child care center cost an average of $15,140 a year-or about three-quarters of the total income of a family of three living at the Federal Poverty Level (FPL).

The Colorado Child Care Assistance Program (CCCAP) provides child care assistance to parents who are working, searching for employment or participating in training, and parents who are enrolled in the Colorado Works Program and need child care services to support their efforts toward self-sufficiency. Most of the money for CCCAP comes from the federal Child Care and Development Fund. Each county can set their own income eligibility limit as long as it is at or above 165% of the federal poverty level and does not exceed 85% of area median income.

Unfortunately, while the need is growing, only an estimated one-quarter of all eligible children in the state are served by CCCAP. Low reimbursement rates have also resulted in fewer providers willing to accept CCCAP subsidies.