Human Needs Index Shows Economic Recovery Stalling

May 17, 2018       Andy Segedin      

Need for food, housing, medical, and other supports is dwindling nationally, but persists regionally in the Rust Belt, West, and other regions. As government supports help those in poverty keep their heads above water, working-poor households teeter on brink of collapse.

This is the national picture depicted in The Human Needs Index, the product of a partnership between The Salvation Army and Lilly Family School of Philanthropy at Indiana University. The index developed from need-based demand for meals, groceries, housing, clothing, furniture, medical bill and prescriptions, and energy bills. As opposed to measuring need based on populations’ income, according to Lt. Col. Ward Matthews, national community relations and development secretary, populations essentially self-select into groups in need of support by seeking assistance.

The index, which measures back to 2004, starts with a base of zero and moves up. The lowest national figure recorded was 0.78 in 2004 and topped out at 1.33 in 2012, when the effects of the recession were being felt. The 1.15 mark in 2017 is the index’s lowest measure since 2014.

The Salvation Army continues to use index information to inform advocacy meetings with government representatives and share with partner organizations working on the ground. Government initiatives such as work requirements for food subsidies can be answered with knowledge of the realities facing individuals in various areas of the country. Such requirements, for instance, might be a signal to The Salvation Army to ramp up food pantries in specific states.

Future efforts include evaluating rural poverty versus urban poverty and helping with job training and economic development in struggling areas such as the Rust Belt.

“It takes longer than passing a bill or waving a wand,” Matthews said. “It’s hard work. Changing the world is hard work, but it is possible.”

The need for furniture was the biggest riser in 2017, an increase of almost 9 percent. None of the other seven metrics experienced an increase of 1 percent. Matthews explained that individuals might be evicted or otherwise unable to take furniture with them when they move. The Salvation Army also responds to homes damaged in fires and floods. Individuals depicted in the index might have enough resources to have a home, but not enough to withstand such a major event and pick up the pieces.  As with all seven indicators, the demand for furniture is based on a cycle of inventory — supply and demand. The greater the outflow and more modest the backfill, the stronger the need.

Regional need can also fluctuate based on transient populations, according to Matthews. Some states might develop strong social safety nets, but individuals living on the margins are forced to move back with family or chase faraway jobs when resources run out. The Salvation Army is working to predict such movement, similar to displacements after major national disasters, so that states can prepare for potential influxes of people in need of certain necessities.

The top of the Human Needs Index does not feature states typically associated with low economic opportunity, such as Mississippi and New Mexico. Both states show below-average need. Instead, Nevada has topped the state-by-state index in each of the past two years after ranking second in 2015. Arkansas, Alaska, and Pennsylvania have also ranked in the top 10 on the index in terms of need in each of the past three years. The 2017 top 10 states in most need were:

  1. Nevada, index score of 4.76;
  2. Wyoming, 3.04;
  3. Arkansas, 2.94;
  4. Rhode Island, 2.69;
  5. Alaska, 2.36;
  6. West Virginia, 2.22;
  7. South Dakota, 2.00;
  8. Pennsylvania, 1.69;
  9. Minnesota, 1.67; and,
  10. New Hampshire, 1.66

Kurt Watkins, a Salvation Army spokesperson, noted that states traditionally associated with high poverty rates and poor employment might have more government resources to keep households afloat. States such as Nevada and Pennsylvania are more likely to feature households referred to as “working poor.” Individuals are employed and earning above the poverty line, but do not earn enough to afford, for instance, both groceries and their prescription medications and so they are forced to either skimp or seek out assistance.

States that frequently appear atop the index also tend to have less diversified workforces. Pennsylvania’s economy has been largely dependent on mining, while Nevada’s has been hospitality-focused. There are fewer opportunities in thriving job sectors such as finance. Government reports will show that many of the individuals in these states are employed, but they fail to show that they aren’t earning the same salary as they were making before.

“We are still not back to 2007,” Watkins said. “We still aren’t at the same economic stability as before the Great Recession. That is what the Human Needs Index is showing.”

The complete report is available here: https://humanneedsindex.org/

 

  • Human Needs Index
  • Lilly Family School of Philanthropy
  • The Salvation Army