What does it take for a family in the US to not merely get by, but to have long-term economic security and ongoing opportunities? This was the question that inspired the creation of the Basic Economic Security Tables Index (BEST) and accompanying Report, a joint effort of Wider Opportunities for Women (WOW) and the Center for Social Development (CSD) at Washington University’s Brown School. CSD’s work on the BEST is part of its Livable Lives Initiative, which investigates social conditions and policy supports that can help make life with a low or moderate income stable, secure, satisfying, and successful. WOW organized and led the development of the BEST, and CSD provided expertise on the saving components.
The national BEST Index provides a broad view of the state of the nation’s workers—the expenses they face, their resources, and their prospects for achieving the financial stability so critical to the nation’s future. BEST data increase awareness of the challenges faced by the typical American worker, and suggest leverage points and policy that can help them overcome the obstacles to economic security.
“The BEST follows a long history of research defining families’ spending and income needs, but reflects a modern economy and contemporary understanding of how families achieve financial stability,” says Yunju Nam, Assistant Professor at the School of Social Work at the University at Buffalo, State University of New York and Faculty Associate at CSD.
The BEST is different from other “living wages” indexes in that it aims to capture what is needed for household stability and development rather than focusing on subsistence. Therefore, the BEST includes saving components such as emergency savings, retirement savings, education savings, and homeownership savings that are essential for long-term economic security and household development.
“Meeting basic monthly living expenses alone leaves a family short of genuine financial stability,” notes Nam. “Workers must develop assets to attain both short-term and lifelong economic security. The BEST therefore suggests how much workers should save to reach modest asset development goals.”
The index is intended for use by policymakers, researchers, and policy advocates concerned with national policy needs and with changes in workers’ and families’ needs over time. The savings components incorporated in the BEST suggest the importance of asset building for household development and stability.
“In order for families to develop,” notes CSD Director Michael Sherraden, “it is necessary to accumulate savings and assets for investments in homes, education, experience, and enterprise. This is true for all families, rich and poor alike. Asset holding creates material conditions, as well as outlooks and behaviors that promote household stability and development.”