Peak Economic Security Index (ESI) by State, 2008-2010 (courtesy the Rockefeller Foundation)
Washington, DC (WLTX) -- The Rockefeller Foundation & Yale University professor Jacob Hacker today released "Economic Insecurity Across the American States," a state-by-state report of economic insecurity over the last generation and during the recent economic downturn.
Using the "Economic Security Index," (ESI), the study reveals that South Carolina has one of the highest rates of economic insecurity in the nation, ranking 7th among states in terms of average level of ESI from 2008-2010.
The ESI is a comprehensive measure of economic security which tracks the proportion of Americans who see their "available household income" - their household income after paying for medical care and servicing their financial debts - decline by 25 percent or more from one year to the next and who lack an adequate financial safety net to replace this lost income.
The ESI was 21.6 in South Carolina in 2010, which corresponds to over 1 in 5 individuals experiencing large economic losses.
Between 2008 and 2010, only Mississippi, Arkansas, Alabama, Florida, Georgia, and California had a higher ESI than South Carolina.
The report reveals that New Hampshire, Wisconsin, Connecticut, Washington, and Minnesota experienced the lowest levels of economic insecurity during the recent downturn. The data also shows that insecurity is generally higher among states in the South and West, and lower in the Midwest and Northeast.
"The Great Recession was both broad and deep. No part of the nation was spared," explains Jacob Hacker, Director of the Institution for Social and Policy Studies at Yale University.
"Nonetheless, some states were hit particularly hard, and South Carolina was among them. Even after the official end of the recession, a strikingly high 1 in 5 South Carolina residents experienced large economic losses in 2010."
South Carolina experienced a record level of insecurity (22.0) in 2008. The national average peaked in 2009 with an ESI of 20.5. Historically, South Carolina has always experienced higher levels of insecurity than the nation as a whole.
The ESI for South Carolina rose by 41 percent between 1986 and 2010, reflecting a broader national decline in economic security over the last generation. Since the ESI is simply the proportion of those who experience a 25 percent drop in available household income, it is easily translated into estimates of the number of those who experience large losses. In 2010, roughly 759,000 individuals in South Carolina experienced a 25 percent drop or greater, compared with 366,000 in 1986, reflecting higher insecurity as well as a larger state population.
In addition to macroeconomic trends, the South Carolina ESI may have been higher than the national average during the recession as a result of higher concentrations of individuals known to have higher exposure to economic risk at the national level. For example, large losses are more prevalent among individuals who reside in a household headed by someone who has less than a college degree, is Black or Hispanic, or is a single parent.
"Economic Insecurity Across the American States" shows that while nearly every state experienced record insecurity during 2008-2010, all states experienced a significant rise in insecurity between 1986 and 2010. This trend began long before the recent downturn, as every state had higher average insecurity between 1997 and 2007 than between 1986 and 1996. In other words, American households were becoming more vulnerable to large losses in income even before the Great Recession.
The data also shows that the rankings of states in regards to levels of insecurity remained relatively consistent over the period from 1986 to 2010, indicating that state differences in insecurity have been fairly persistent over the last generation.