Rhode Island Standard of Need

December 17, 2020

With scenic beaches, culinary and arts communities, and higher education institutions, Rhode Island can be a wonderful place to live and to raise a family. Yet many Rhode Islanders — working at jobs that pay wages that are too low to meet even the most basic living costs — experience many barriers to feeding, clothing, and housing themselves and their children. Black and Latinx Rhode Islanders make up a disproportionate share of those with low wages and income. For those families seeking to overcome barriers to get by, work support programs can help narrow the gap between earnings and expenses. Since Black and Latinx Rhode Islanders are overrepresented as a share of Rhode Island’s low-wage workers, enhancing such programs, as well as paying all workers a living wage, would serve to decrease disparities.

In alternating years, the Economic Progress Institute (EPI) has published the Rhode Island Standard of Need (RISN) to answer two fundamental questions:

1. What is the cost of meeting basic needs for families and individuals in Rhode Island?

2. How do state and federal work and income  supports help households meet the cost of basic needs?

This year, in 2020, the RISN poses two more questions:

3. What are the racial and ethnic inequities in the ability of Rhode Island families to meet their basic needs?

4. How has additional government support helped essential and other workers and their families during the COVID-19 pandemic?

The Rhode Island Standard of Need provides a more accurate measure of economic well-being than the commonly used Federal Poverty Level (FPL). The federal poverty level was developed in the 1960s and measured economic security based on the cost of food, which at the time represented a third of a family’s budget. Today, other expenses such as housing and child care, necessary for parents to work, take up a larger share of a household budget than does food. Yet the federal poverty level has not changed to reflect this new reality, or to reflect that expenses vary in different areas of the country. The federal poverty level also fails to take into account the value of work support programs and tax credits that can help working families meet their expenses.

The RISN calculates a household budget for families with two young children, and for single adults. The no-frills budget includes the costs of housing, food, transportation, health care, child care, and other necessities including clothing, toiletries, and telephone service. The RISN also demonstrates how work supports like food assistance, tax credits, and child care and health care subsidies help close the gap between income and expenses for basic needs. By taking all of these factors into account, the RISN provides a more realistic measure of the economic security — or, too often, insecurity — of Rhode Islanders than does the federal poverty level.