Poverty measures provide a picture of the poorest families in the US, but there are many families who aren’t captured by these measures who are still struggling to thrive.
In 2022, about a quarter of adults said they were, at best, just getting by. Even among families who can afford most of their day-to-day needs, many cannot weather unexpected expenses, like trouble with their car or a visit to urgent care. About 54 percent of families couldn’t afford a $2,000 emergency expense in 2022—18 percent couldn’t pay a $100 emergency expense.
Several factors contribute to families’ financial insecurity, including rising food, rent, and child care costs; high debt burdens; and insufficient wages. But prices, economic opportunities, wages, and policies vary across states.
To better understand how families’ financial situations vary across states, we used the Urban Institute’s true cost of economic security (TCES) measure to calculate the share of people in families lacking the resources to thrive in each state in 2022. For people in families with resources below the TCES threshold, we also assessed the average gap between a family’s annual costs and their resources by state.
Our TCES measure evaluates more than acute financial need and takes a comprehensive view of families’ costs and resources (link added 1/14/25) to help us to help us understand how much families require to thrive. That includes paying for housing, food, health care, transportation, child care, technology, student debt, taxes, and miscellaneous expenses, and saving for the future.
We find more than half of people in families in the US (52 percent) did not have the resources necessary to thrive in 2022, but rates differed across states. With a more comprehensive understanding of families’ costs and resource gaps, federal and state policymakers can work toward crafting solutions to help families struggling to get ahead.
Families across the US lack the resources they need to thrive
In over half of the states, more than 50 percent of people were in families with resources below the TCES threshold, meaning most people lacked the resources to meet the true cost of economic security.
At the same time, the share of people in families struggling to cover current expenses and save for the future varied across the country. In Hawaii, the state with the largest share of people in families with resources below the TCES threshold, 66 percent of people lacked the resources needed to thrive. And in North Dakota, which had the smallest share of people in families with resources below the threshold, 40 percent of people still did not have the resources necessary to achieve economic security.
Costs alone cannot explain all the state-level differences in how many people are struggling to thrive. Some states with low median TCES thresholds also had a large share of people in families who struggled. For example, 56 percent of people in families in Louisiana and 58 percent of people in Mississippi did not have sufficient resources to meet the TCES even though the median thresholds in these states were among the lowest ($105,600 and $95,800).
In contrast, some states with a higher-than-average TCES had a relatively smaller share of people in families without the resources to thrive. Connecticut, where the median TCES threshold was $139,600 (above the national figure of $114,900), had one of the smallest shares of people in families struggling to thrive (45 percent).
For people in families with resources below the TCES, we also assessed the average gap between a family’s annual costs and resources by state. We found that across the US, the average resource gap for people in families was large.
Nationally, the average gap between costs and resources was $31,300 for people in families with resources below the TCES threshold. But the average resource gap ranged from $23,000 (North Dakota) to $46,100 (Hawaii) across states.
What drives the differences among states?
Our TCES measure identifies differences in economic security between states (link added 1/14/25), but additional analysis is needed to better understand what’s driving those disparities.
Some disparities could reflect differences in the resources that families can access. Some states offer tax credits for working families, and others have opted to expand Medicaid coverage to additional adults—just two policies that can lessen families’ costs. The mix of economic opportunities, wage levels, and other metrics, like the share of adults in the labor force, also vary by state.
In some places, specific costs may be particularly important factors contributing to economic insecurity. Families in some states may face higher rent relative to their household income (PDF) or more costly child care when compared with other states. However, even in places with lower overall costs, families in states with both low resources and low earning power may face the greatest challenges in meeting TCES thresholds.
Understanding what leads families to have resources below the TCES can help communities identify solutions to help more families thrive. Because economic conditions and challenges vary across states, federal and state policymakers should consider a diverse set of solutions to help more families achieve economic security.
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