August 31, 2018; Los Angeles Times

The Labor Day holiday, which just passed yesterday, is a time for taking stock of the state of working Americans. As David Lazarus, a local television and Los Angeles Times business columnist, notes, by conventional standards, the US economy is doing well. “Unemployment is near a two-decade low. The stock market is strong. Corporate profits are at record highs.” But, Lazarus points out, even so, many families are struggling to make ends meet, as a new report from the Urban Institute, a Washington, DC-based think tank, illustrates.

The report, titled “Material Hardship among Nonelderly Adults and Their Families in 2017: Implications for the Safety Net,” is authored by Michael Karpman, Stephen Zuckerman, and Dulce Gonzalez. Karpman and his colleagues wrote their report based on a survey of 7,588 adults, aged 18 to 64, who completed a survey form between December 14, 2017, and January 5, 2018. The survey sample is considered comparable to those conducted by the US Census Bureau, such as the Current Population Survey and the American Communities Survey.

Overall, the Urban Institute’s survey asked about four areas of potential material hardship, namely: a) housing (specifically whether the household missed rent or mortgage payments due to a lack of funds and whether it had been forced to move); b) utilities (specifically whether payments were missed due to a lack of funds or had their utilities shut off); c) food insecurity (based on a USDA-designed six-question form); and d) healthcare (specifically whether the household had foregone medical care because of cost or had had problems paying medical bills).

Among the survey findings were the following:

  • An estimated 23.3 percent of those surveyed reported that their household had experienced times of food insecurity, meaning times of “limited or uncertain access to food.” Among families whose income was twice that of the official poverty line or less, more than 40 percent had experienced food insecurity in 2017.
  • Health was another major area of hardship, with 18 percent of those surveyed reporting having problems paying medical bills and 17.9 percent stating that they had an unmet medical need because of cost.
  • Families were better able to meet housing and utility payments, with only 1.1 percent reporting being evicted for nonpayment and 4.3 percent reporting suffering utility shutoffs for nonpayment. Even so, 10.2 percent reporting missing rent or mortgage payments and 13 percent reported missing utility payments for financial reasons.
  • Even among families with working adults, the report found that, “Nearly 20 percent of adults in working families reported household food insecurity, and approximately 17 percent reported problems paying medical bills or unmet needs for medical care.”
  • Overall, the report found that, “nearly 40 percent of nonelderly adults reported difficulty affording food, health care, housing, or utilities in 2017, including over one-third of those in families in which at least one adult worked.”

“It’s certainly surprising and disconcerting that so many people are having difficulty meeting their basic needs,” says Karpman, a co-author of the report. “What we found is that a lot of people have to devote much of their income to fixed expenses like rent or healthcare,” Karpman tells Lazarus, “If they’re hit with a large, unexpected expense, they simply can’t cover it.”

Karpman adds that, “About 20 percent of middle-class people are having trouble, mostly with healthcare.” As Lazarus explains, “That means a family of three making $80,000 a year, or a single person making at least $50,000, may be living paycheck to paycheck—and could be devastated by a single medical bill.”

Benjamin Griffy, an assistant professor of economics at New York’s University at Albany, tells Lazarus that the combination of low unemployment and high financial insecurity speaks to the prevalence of low-wage jobs. Many of the jobs, Griffy notes, “aren’t high-paying jobs, and they aren’t jobs that offer particularly stable employment. And since those are a large fraction of the jobs that have been added, average wages haven’t risen to the degree that we would expect.”

Recent federal policies, such as the Trump administration’s announcement the week before Labor Day to deny federal workers wage increases in 2019, don’t help the situation.

For his part, Lazarus remarks, “There’s no excuse for millions of working people in the richest country in the history of the world being unable to feed themselves or keep a roof over their heads. Nor is there a rational explanation for millions being without health coverage or facing financial ruin in the event of a serious medical problem.” The fact that this is the case, Lazarus adds, is a sign of “a society that has lost its way, in which the comfort of a relative few has become a higher priority than the well-being of the vast majority.”—Steve Dubb