This report describes a new measure of well-being, the true cost of economic security (TCES). Our TCES measure takes a comprehensive view of the costs families must meet to fully participate in today’s society and economy and all the resources they have available to meet those costs, including their earnings, other private sector income, and government supports. We designed the TCES measure with accuracy and replicability in mind, using high-quality, publicly accessible data collected regularly to capture variations across states and metropolitan and rural areas, allowing us to explore differences by age, family structure, and race and ethnicity.

Why This Matters

According to the Federal Reserve’s 2023 Survey of Household Economics and Decisionmaking, 52 percent of people in the US report that, at best, they are just making ends meet, unable to have saved any of their income in the month before the survey, and only 33 percent report they live comfortably (Board of Governors of the Federal Reserve System 2024). Yet, our conventional measures of economic insecurity, like the poverty rate, only capture acute need and shed no light on the hardships of millions of people who struggle to pay their bills and save for the future—people who are economically insecure and not poised to thrive.

What We Found

We find that 52 percent of all people lived in families below the TCES threshold in 2022. Among the people in families below the TCES threshold, over 40 percent have resources between 75 and 100 percent of the threshold. On average, these families are coming close to economic security, largely getting by, and meeting most regular expenses, but they are not primed to thrive. In contrast, more than one in six people who fall below the TCES threshold (and about one in ten overall) have less than half of the resources they need to meet their true cost of economic security.

TCES thresholds vary by family type (e.g., families with and without children present, families with members over age 65), family composition (e.g., number of adults and children), and location, and these same characteristics affect the share of people living in families whose resources fall below the TCES:

• Among people in families with all adults under age 65 and with children present, 58 percent fall below the TCES threshold, compared with 46 percent of people in families with all adults under age

65 but without children, and 48 percent of people in families with at least one adult age 65 and older.

• Three out of five children live in families with resources below the TCES threshold, compared with 49 percent of adults ages 18 to 64 and 47 percent of adults age 65 and older.
• The chance that an individual falls below the TCES threshold is slightly lower for those living in metro areas than for those in nonmetro areas (51 vs. 54 percent). Across regions of the country, the TCES rate ranges from a low of 47 percent in the Midwest to a high of 57 percent in the West.
• Low resources rather than high costs characterize the places with the highest TCES rates (the highest shares of people with resources falling below the TCES threshold). In places with the highest TCES rates (that is, the highest share of people with resources below the TCES threshold), people face somewhat similar costs in comparison to those in places where more people are thriving, but they have, on average, relatively low resources. The resource differences largely reflect higher earnings and other market income for those living in low TCES rate counties.

How We Did It

To develop the TCES measure, we determined TCES thresholds—the resources families need to be economically secure—by reviewing existing measures of poverty, living wages, and self-sufficiency to ascertain what types of costs they capture and how they assess what a family needs to meet those costs, depending on family composition and location. To capture families’ resources across the nation, we use detailed demographic and economic data from the American Community Survey (ACS) enhanced by the Urban Institute’s Analysis of Transfers, Taxes, and Income Security (ATTIS) microsimulation model. The ATTIS model allows us to adjust for resources that are not included in the ACS or that families tend to underreport in surveys like the ACS.