By Andy Brack, editor and publisher | A new statewide report outlines three pathways for more economic security for struggling South Carolina families.
The draft report, “On the Road: Exploring Economic Security Pathways in South Carolina,” builds on a 2016 study that suggested the way that policymakers view those in poverty is too restrictive and based on outdated assumptions from a 50-year definition of poverty that doesn’t reflect current realities.
Instead of continuing to use poverty as a policy measure, last year’s study for the United Way Association of South Carolina suggested a new “self-sufficiency standard” that better outlines the real cost for families to be financially stable. To make ends meet, families in the state need almost twice as much — 166 percent to 244 percent of current poverty levels (based on geographic location) — to have enough money to make ends meet. Statehouse Report broke the story here.
This new report for the Association, which will be unveiled in coming weeks, builds on last year’s study. It suggests if families meet the self-sufficiency standard, they still aren’t necessarily financially secure. The road to greater economic security, beyond securing basic needs and creating an emergency savings fund, requires families to do more. The report suggests three basic pathways — through more education, by getting better housing or by building retirement savings.
The report also includes detailed numbers on costs of each alternative to help families explore options.
“It is not assumed that every family can or should take any or all of these pathways,” according to a January 2016 draft of the report by Dr. Diana M. Pearce of the Center for Women’s Welfare at the University of Washington’s School of Social Work. “Rather, by providing this information, this report enables individuals and households to make informed choices as to which economic security pathways make the most sense for their situation and family.”
Pathways to economic security
Pathway 1: More education. Pearce writes a better education is something that can’t be taken away from someone once they have it. More education generally leads to better jobs and benefits, more stability and more opportunities. A high school degree, the report argues, is no longer a guarantor of a good job that can sustain a family. Education options range from people getting:
- A post-high school certificate, which can cost about $3,000 to $9,000. For those with proper training, wages generally can approach three times the minimum wage of $7.25 per hour.
- A two-year degree from a technical college, which averages $4,850 a year in South Carolina.
- A bachelor’s degree, which costs from $78,451 for four years at the University of South Carolina to $122,044 at The Citadel, according to the report.
Pathway 2: Better housing. The report says families may move into better housing to achieve several goals — from being in neighborhoods with better schools or job opportunities to getting out of unsafe situations or areas that are getting too expensive. “Whether it involves moving to more stable rental housing or becoming a homeowner, achieving improved housing stability is an important step toward economic security,” the report said. Costs to buy a house vary widely based on geography — from $29,600 for a starter home in rural Williamsburg County to $158,700 in Beaufort County on the coast.
Pathway 3: Saving for retirement. The report notes Social Security retirement benefits in the future may not provide enough money for people to have financial security and that federal Medicare funding likely won’t pay for all health needs of retirees. Building savings for retirement — particularly if families can start early — will pave a better path for long-term economic security.
Policy implications of the report
The new report doesn’t go into great detail about the state policy implications that could help low-wage workers build greater economic security. But here are some ideas that policy experts point to:
Relax restrictions on assets and savings so people can keep public benefits. “These include allowing benefit recipients to save towards education or housing security,” the report said. In other words, don’t make it tougher for people to keep aid that can help lift them toward a more secure future.
Pass a refundable state Earned Income Tax Credit. Such a credit, often suggested at being 10 percent of the federal credit originally pushed by President Ronald Reagan, rewards work and increases the income of a struggling, low-income family, advocates say.
Start or expand programs that encourage sweat-equity participation in building of affordable housing. Former United Way Association of South Carolina President Tim Ervolina notes there are federal funds available for “zero-interest, forgivable loans to nonprofit organizations and public agencies sponsoring sweat equity homeownership programs. South Carolina could encourage non-governmental organizations and faith-based organizations to apply by providing small matching grants from housing trust funds.”
More affordable higher education. Some advocates now say college, or at least technical college, should be as available for free like high school education is today. “If we have said that technical training or college are the equivalents to the high school diploma of a generation ago, then why are we charging people who have no money for entry into the very first door to success?” Ervolina asked.
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