A study released by researchers at Yale shows that West Virginians are more likely than residents of most other states to suffer from economic insecurity.
The study also shows that economic insecurity has been steadily rising throughout the country since at least the mid-1980s, though it declined in 2011 as households paid down debts.
The Economic Security Index report issued by the Rockefeller Institute and Professor Jacob Hacker, director of the Institution for Social and Policy studies, measures the proportion of the population who lost at least 25 percent of their income – after medical and debt service costs – during one year and who do not have adequate savings to make up the difference.
The most recent report shows that West Virginia ranks eighth highest of the lower 48 states in economic insecurity, with more than one fifth of residents experiencing insecurity in 2011. While this represents a 0.8 percent drop over the 2010 level – slightly smaller than the 1.3 percent decline in national economic insecurity – the overall trend shows a striking increase in insecurity since 1986.
The relative size of the population that was economically insecure is 25 percent larger than it was in 1986 in West Virginia, which closely mirrors the national trend.
“This translates into roughly 323,000 West Virginia residents (out of a population of 1.5 million) who experienced large economic losses in 2010, as opposed to 248,000 in 1986, reflecting a rise in insecurity and a relatively stable population size,” notes the previous year’s report
The study attributes the decline to wages that have been consistently falling, in inflation-adjusted terms, for lower-income workers since at least the early 1980s, though steadily rising medical costs and household debt levels that skyrocketed beginning around 2000 also contributed.
“The primary driver of the ESI is fluctuations in actual income,” the study notes. “Yet the other components of the index—health costs and debt—contribute to the calculation.”
Even the decline in the insecurity measure may not be entirely comforting, as Hacker noted in a press release.
“Almost five years after the start of the Great Recession, Americans’ household resources are beginning to stabilize in many portions of the country. But it is important to recognize that the ESI may also fall when individuals have sustained large losses and have remained at a stably low income – for example, due to long-term unemployment.”
The study notes that households headed by someone with less than a college degree are far more likely to suffer from economic insecurity, as are households headed by a single parent, as well as African-American and Latino households.