Self-sufficiency

From LiteracyTentWiki

Self-sufficiency AleWorkforceDevelopment

[The following is pasted, verbatim, from Wider Opportunities for Women's webpage The Self Sufficiency Standard]

The Self-Sufficiency Standard calculates how much money 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 provides important guidance for policymakers and program providers regarding how to target their education, job training, workforce development, and welfare-to-work resources. It helps individuals choose among occupations for work experience and educational training. It also shows policymakers how subsidizing child care, transportation or health care impacts the wages necessary for working families to make ends meet.

• 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 Standard accounts for the fact that, over time, various costs increase at different rates. For example, food costs, on which the official poverty thresholds are based, have not increased as fast as housing costs. This failure to account for differential inflation rates among other non-food basic needs is one reason that the official poverty thresholds are no longer an adequate measure of the money required to meet real needs.

Back to AleWorkforceDevelopment Definitions

Back to ALEGlossary