One in five Americans is economically insecure, according to the latest findings from the Economic Security Index (ESI). The ESI is a measure of the fragility of Americans' financial wellbeing, an initiative started last year by a group of researchers led by Yale political scientist Jacob Hacker and supported by the Rockefeller Foundation. The goal of the ESI is to measure and publicize the financial fragility of Americans with the goal of educating decision makers and improving public policy.
Hacker defines the economically insecure as Americans who have experienced a one-year drop of at least 25 percent in their disposable household income--the income that remains after paying for medical care and servicing debt--and who lack the financial resources (i.e. savings) to cope with the decline.
Economic insecurity has been rising for decades. Hacker and his colleagues have measured it as far back as 1986. In that year, only 14.3 percent of Americans were economically insecure. The figure rose to 18.8 percent by the early 2000s, then the Great Recession pushed it to today's record level of 20.5 percent. Fully 62 million Americans were economically insecure in 2010, up from 34 million in 1986.
Source: Economic Security Index, Economic Insecurity and the Great Recession--Findings from the Economic Security Index, November 2011
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