About one in five Pennsylvanians experienced a significant loss in income in 2010 without an adequate safety net, according to a study released Thursday that measured so-called "economic insecurity."
"Economic Insecurity Across the American States," which was conducted by the Rockefeller Foundation and Yale University professor Jacob Hacker, said households qualified as "economically insecure" if they had a 25 percent decline in available income, from either direct income loss or out-of-pocket medical expenses, and did not have enough wealth to compensate for their losses.
The percentage of residents whose households fit that criteria was calculated as the state's Economic Security Index, or ESI. A state's ESI is a measure of the "ups and downs its citizens face in a week economy," the study said, and communicates what simple household incomes or unemployment statistics cannot.
Data from the study, which measured the time period from 1986 to 2010, was primarily extrapolated from the March supplement to the Current Population Survey, which the federal government uses to estimate poverty and unemployment. Although national rates of economic insecurity have been compiled in previous studies, this is the first year that Economic Security Index has been calculated for individual states.
In 2010, Pennsylvania's ESI was 19.9 percent. Although that number was slightly lower than the national average, ranking Pennsylvania 27th, it is a record level of economic instability for the state since 1986, when measurements began. Roughly 2 million Pennsylvanians experienced economic insecurity in 2010 compared to 1.2 million in 1986, although that number also reflects a growing state population.
The study noted that Pennsylvania has lower concentrations of people who tend to be at higher risk for economic instability -- such as those without a college degree, who are black or Hispanic, or who are single parents -- which could explain its relatively low rates.
West Virginia, Ohio and New York also all experienced record rates of economic insecurity in 2010. West Virginia's ESI, 22.15, put it in the bottom fifth of all states. Like Pennsylvania, Ohio and New York were both near the national average.
Nationwide, New Hampshire had the lowest ESI in 2010 and Mississippi the highest, with nearly a quarter of its residents qualifying as economically insecure. Northeastern and Midwestern states tended to fare better than those in the South and West.
Jacob Hacker, one of the study's authors, explained that the ESI is a "relatively conservative" measure, since it takes into account only those who have lost income over the course of a year. A household that lost 25 percent of its income in 2009, for example, and lost an additional 10 percent the next year, would not have its members counted as economically insecure in 2010.
The findings, he said, are evidence of the broad impact the Great Recession has had.
Nearly every state experienced record levels of insecurity during the Great Recession or in the years immediately following it, and all states had experienced a significant increase in economic instability since 1986.
Economic instability during and after the recession "has affected people across the income and educational spectrum," Mr. Hacker said. Even Americans who hold a college degree, though they fare better than their counterparts with less education, have "surprisingly high" levels of instability.
Mr. Hacker and the Rockefeller Institute are calling for action from the federal government.
"We need to strengthen protections for individual families who face a major income loss," he said.
On a national level, he said, the study is evidence that "every state needs help."businessnews
Molly Hensley-Clancy: email@example.com or 412-263-1410.