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Michael Karpman, Stephen Zuckerman, and Dulce Gonzalez May 2019 With the current economic expansion in its tenth year, employment has risen above prerecession levels and real wage growth has increased.1 These economic trends have the potential to reduce poverty and hardship, which could have positive spillover effects on health and overall well-being (Caswell and Zuckerman 2018; Heflin and Iceland 2009; Kushel et al. 2006; Sandel et al. 2018). Yet despite the strong labor market, there has been only modest progress over the past year in families ability to meet their basic needs, according to new data from the December 2018 Well-Being and Basic Needs Survey.2 Nearly 4 in 10 nonelderly adults reported that in 2018,3 their families experienced material hardshipdefined as trouble paying or being unable to pay for housing, utilities, food, or medical care at some point during the yearwhich was not significantly different from the share reporting these difficulties for the previous year. Among adults in families with incomes below twice the federal poverty level (FPL), over 60 percent reported at least one type of material hardship in 2018. In addition to examining how material hardship has changed over time and how it varies by income, this brief highlights economic factors beyond employment that may help explain the persistently high rates of hardship among adults in low-income families and the implications for proposed changes to federal safety net programs. We find the following: The share of adults ages 18 to 64 reporting at least one type of material hardship in 2018 was 38.5 percent, which is statistically unchanged from 2017 (39.3 percent). F R O M S A F E T Y N E T T O S O L I D G R O U N D Despite Labor Market Gains in 2018, There Were Only Modest Improvements in Families Ability to Meet Basic Needs 2 D E S P I T E L A B O R M A R K E T G A I N S , F A M I L I E S S T I L L S T R U G G L E T O M E E T B A S I C N E E D S Between 2017 and 2018, there were modest but statistically significant declines in the shares of adults reporting being unable to pay utility bills (13.0 percent to 11.1 percent), having utilities shut off (4.3 percent to 3.5 percent), problems paying family medical bills (18.0 percent to 16.6 percent), and more than one type of hardship (23.6 percent to 22.3 percent). Nearly 1 in 10 adults (9.3 percent) reported problems paying the rent or mortgage in 2018, over 1 in 5 (23.1 percent) reported household food insecurity, and over 1 in 6 (17.8 percent) reported going without medical care because of its costestimates that were not statistically different from 2017 estimates. Adults in low-income families, those with incomes below 200 percent of FPL, were more than twice as likely as those with higher incomes to report material hardship in 2018. Low-income families disproportionately face economic challenges that are often correlated with employment but may increase the likelihood of facing hardship through mechanisms independent of employment status, including unexpected income losses, inadequate savings, household members with disabilities, lack of health insurance, and high housing costs relative to income. These factors increase exposure to and reduce protection from financial instability among workers and nonworkers alike. These findings underscore that, though employment is a critical determinant of families ability to meet basic needs, it is not the only factor, and additional policies will be necessary to significantly “move the needle” in reducing material hardship. Among the most important federal and state policy choices are those that affect access to safety net programs, which have been found to mitigate hardship among vulnerable individuals and families (McKernan, Ratcliffe, and Iceland 2018). Evidence-based policies that help low-income families save and build assets could also increase their protection from hardship, given that nearly half (47.8 percent) of low-income adults are not confident they could come up with $400 for an unexpected expense, compared with 12.9 percent of adults with higher incomes. With the economy at or near full employment, further progress in improving families ability to meet basic needs will likely depend on approaches to raise and stabilize incomes, offset the cost of essential expenses, and provide a buffer against adverse financial shocks. Data and Methods The Well-Being and Basic Needs Survey (WBNS) is a nationally representative, internet-based survey of adults ages 18 to 64 that monitors changes in individual and family well-being at a time when policymakers are considering significant changes to the safety net. The survey was launched in December 2017 and fielded again in December 2018, with a sample size of over 7,500 adults in each year. The samples for each round include a large oversample of adults with low household incomes to increase the precision of estimates for this population. WBNS samples are drawn from the KnowledgePanel, a probability-based internet panel of approximately 55,000 individuals maintained by Ipsos. Survey weights adjust for unequal selection probabilities and are poststratified to the characteristics of nonelderly adults based on benchmarks from the Current Population Survey and D E S P I T E L A B O R M A R K E T G A I N S , F A M I L I E S S T I L L S T R U G G L E T O M E E T B A S I C N E E D S 3 American Community Survey. These weights are poststratified separately to Current Population Survey and American Community Survey control totals for adults with family incomes below 150 percent of FPL and those with incomes at or above 150 percent of FPL. Karpman, Zuckerman, and Gonzalez (2018b) provides further details on the survey design and content. One limitation of the WBNS is its low response rate, which is comparable to other private surveys but much lower than federal surveys. However, previous studies assessing recruitment for the KnowledgePanel have found little evidence of nonresponse bias for core demographic and socioeconomic measures (Garrett, Dennis, and DiSogra 2010; Heeren et al. 2008), and WBNS estimates are generally consistent with benchmarks from federal surveys (Karpman, Zuckerman, and Gonzalez 2018b). There is also likely to be some measurement error in WBNS respondents reporting of annual income and material hardship during the past year for various reasons, including recall bias and social desirability bias. Finally, the WBNS sampling frame excludes adults who are homeless, have low literacy levels, and are not proficient in English or Spanish, which may lead to underreported levels of hardship. Building on a previous analysis (Karpman, Zuckerman, and Gonzalez 2018a), we estimated changes between 2017 and 2018 in seven measures of material hardship covering the year before each survey, grouped into four domains: Housing: (1) The household did not pay the full amount of the rent or mortgage or was late with a payment because it could not afford to pay or (2) the respondent was forced to move by a landlord, bank or other financial institution, or the government. Utilities: (3) The household was not able to pay the full amount of the gas, oil, or electricity bills or (4) the gas or electric company turned off service or the oil company would not deliver oil. Food security: (5) The household was food insecure based on responses to the six-item short form of the US Department of Agricultures Household Food Security Survey Module (USDA 2012).4 Health care: (6) The respondent had unmet needs for medical care because of costs5 or (7) the family had problems paying medical bills. Measures of hardship can provide a more direct assessment of individuals and families material well-being than traditional income-based poverty measures (Ouellette et al. 2014). Though adults are more likely to experience hardship if their incomes are low, studies indicate that only a modest share of the variation in hardship can be attributed to income and that different forms of hardship emerge from distinct processes rather than a single underlying factor such as poverty (Heflin, Sandberg, and Rafail 2009; Mayer and Jencks 1989). Estimated changes in hardship over time are regression adjusted to control for any changes in respondents demographic characteristics in each year of the survey.6 In addition to estimating changes between 2017 and 2018, we compare differences in material hardship reported in December 2018 for the past year between adults with family incomes below 200 percent of FPL and those in families with incomes at or above 200 percent of FPL. 4 D E S P I T E L A B O R M A R K E T G A I N S , F A M I L I E S S T I L L S T R U G G L E T O M E E T B A S I C N E E D S We compare levels of hardship among adults in low-income families by the presence of a working adult in the family at the time of the survey. We also focus on factors that are correlated with family employment status but may also affect the risk of experiencing material hardship through other mechanisms independent of employment. These factors may affect workers and nonworkers alike through their impact on financial needs and resources or exposure to and protection from unanticipated expenses or loss of income. Our analysis examines four measures that a previous analysis found to be associated with hardship among low-income parents living with dependent children (Karpman et al. 2018): large, unexpected declines in family income during the previous year, which may owe to job loss but could also result from involuntary reductions in work hours or loss of public benefits lack of confidence in the ability to come up with $400 for an unexpected expense within the next month one or more household members with a disability 7 lack of health insurance coverage for part or all of the previous year We also estimate differences by family income in the share of adults with a housing-cost burdendefined as paying more than 30 percent of monthly household income toward rent, mortgage, and utility payments8which may increase the risk of housing instability and limit the availability of resources to meet other basic needs. Findings The share of adults ages 18 to 64 reporting at least one type of material hardship in 2018 was 38.5 percent, which is statistically unchanged from 2017 (39.3 percent). There were modest but statistically significant declines in the shares reporting being unable to pay utility bills, having a utility shut off, problems paying family medical bills, and more than one type of hardship. In December 2018, nearly 4 in 10 adults reported that they or their families had difficulty paying or were unable to pay for housing, utilities, food, or medical care in the past year (figure 1). This estimate was not significantly different from the share reporting at least one of these types of material hardship in 2017, after controlling for the demographic characteristics of adults in the sample for each year. However, the share of adults reporting more than one hardship in the past year declined from 23.6 percent to 22.3 percent, a reduction that was marginally significant. D E S P I T E L A B O R M A R K E T G A I N S , F A M I L I E S S T I L L S T R U G G L E T O M E E T B A S I C N E E D S 5 FIGURE 1 Material Hardships in Past 12 Months Reported by Adults Ages 18 to 64, December 2017 and December 2018 URBAN INSTITUTE Source: Well-Being and Basic Needs Survey, December 2017 and December 2018. Notes: Estimates are regression adjusted. Unmet need for medical care includes general doctor care, specialist care, prescription drugs, tests, treatment and follow-up care, dental care, mental health care or counseling, and substance use treatment or counseling. Food insecurity is based on the six-item short form food security module and includes those with low or very low household food security. */*/* Estimate differs significantly from 2017 at the 0.10/0.05/0.01 level, using two-tailed tests. There were also modest improvements in several of the individual measures of hardship. The share of adults reporting that they were unable to pay utility bills fell from 13.0 percent in 2017 to 11.1 percent in 2018. Reported utility shutoffs declined during this period, from 4.3 percent to 3.5 percent. In addition, the share of adults reporting problems paying family medical bills decreased from 18.0 percent to 16.6 percent. Nearly 1 in 10 adults reported problems paying the rent or mortgage in 2018, over 1 in 5 reported household food insecurity, and over 1 in 6 reported going without medical care because of its costestimates that were not statistically different from 2017 estimates. Other than utility-related and medical bill issues, most other hardship measures were statistically unchanged in 2018. Nearly 1 in 10 adults (9.3 percent) surveyed in December 2018 reported that their household was unable to pay the full amount of the rent or mortgage or was late with a payment at some point during the past yearnot significantly different from the 10.2 percent of adults reporting these challenges in 2017 (figure 1). The share reporting household food insecurity held constant at 23.1 percent,9 as did the share reporting an unmet need for medical care because of costs, at 17.8 percent. 39.3%23.6%10.2%1.1%13.0%4.3%23.1%18.0%17.7%38.5%22.3%*9.3%1.6%*11.1%*3.5%*23.1%16.6%*17.8%Any hardshipMultiple hardshipsProblems paying rent or mortgageEvicted/forced to moveProblems paying utility billsUtility shutoffFood insecurityProblems paying family medical billsUnmet need for medical care because of costsDecember 2017 December 20186 D E S P I T E L A B O R M A R K E T G A I N S , F A M I L I E S S T I L L S T R U G G L E T O M E E T B A S I C N E E D S Between 2017 and 2018, the share reporting being evicted or forced to move increased from 1.1 percent to 1.6 percent, though many adults who experience housing instability (e.g., those who are homeless or doubled up with other family members) are likely missing from the panel from which the survey sample is drawn. Adults in low-income families were more than twice as likely as those with higher incomes to report material hardship in 2018. In December 2018, 61.1 percent of adults with family incomes below 200 percent of FPL reported material hardship in the past year, compared with 28.3 percent of adults with higher incomes (figure 2). Low-income adults were more than twice as likely as adults with higher incomes to report more than one hardship in the past year (39.2 percent versus 14.8 percent). One in six (16.7 percent) low-income adults had problems paying the rent or mortgage in 2018, and over 40 percent reported household food insecurity, approximately triple the rates for adults in higher-income families. Differences by income level in problems affording medical care were smaller, but low-income adults
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