Defining poverty in Rhode Island

EPI’s Standard of Need reports key findings on poverty

By Steve Ahlquist for UpRiseRI

A new report from the Economic Progress Institute (EPI) calculates how much money is required for low-income Rhode Islanders to pay for basic expenses including food, housing, healthcare, transportation and childcare. 

This calculation, known as the Rhode Island Standard of Need (RISN), is used by legislators, nonprofits, advocates, and others to understand the true level of economic security in the state.

“The RISN report is a stark reminder that far too many Rhode Islanders aren’t earning enough to make ends meet,” said Weayonnoh Nelson-Davies, Executive Director of the Economic Progress Institute. “Rhode Island is an amazing state, but it’s expensive to live here, especially if you’re raising a family. The challenge is even more profound for communities of color and women of all races, who represent a larger portion of low-income and modest-income earners.”

RISN’s finding were reported by Alan Krinsky, EPI’s Director of Research and Fiscal Policy, at a press conference Thursday morning held at the United Way of Rhode Island offices in Providence. Director Krinsky presented seven key findings:

Key Finding 1, Family Expenses: Housing subsidies can make a crucial difference for Rhode Islanders seeking to meet their needs. Childcare and housing consume over half the budget for a single parent with a toddler and a school-age child.

Key Finding 2, Household Earnings: Many Rhode Island households do not earn enough to make ends meet, a reality experienced by more Latino and Black households than White households. Across race and ethnic groups, women are less likely than men to earn enough to meet their basic needs.

Key Finding 3, Economic Security: RISN calculations highlight the inadequacy of the Federal Poverty Level (FPL) as a measure of economic security. For example, the RISN calculates a single parent with two children has $66,567 in basic annual expenses, while the FPL determines expenses to be $23,030.

 

Key Finding 4, A Living Wage: Increasing the Rhode Island Minimum wage – and phasing out the tipped minimum wage – would narrow the gap between earnings and basic expenses.

Key Finding 5, Large Gap for Cash Assistance Recipients: Rhode Islanders receiving cash assistance through Rhode Island Works (who are disproportionately Black and Latino) or through Supplemental Security Income (SSI) have significant gaps between income and basic living expenses. 

Key Finding 6, “Essential” Workers: Rhode Island’s essential workers often struggle to make ends meet – and lack of access to work support such as child care assistance is a problem. Without subsidies from the Child Care Assistance Program (CCAP) and subsidies through HealthSourceRI, working families – including frontline and essential workers – have a large gap between income and expenses.

Key Finding 7, Work Support Programs: Work support programs such as child care and health care assistance help low-income Rhode Islanders and decrease racial and ethnic disparities. Government-funded work-support programs help narrow the gap between income and expenses for many low-wage families. Expanding these programs would decrease racial and ethnic disparities.

“…frontline and essential workers too often live with economic insecurity,” said Director Krinsky. “We call these workers essential while at the same time not paying them enough to afford their most basic needs, not enough to affirm the necessity and value of their work.”

The RISN provides a more accurate way to measure economic security than the Federal Poverty Level (FPL), which was created in the 1960s and based solely on the cost of food. However, the FPL often dictates the size and availability of benefits for many low-income Rhode Islanders.

“The Rhode Island Standard of Need, calculated and reported by the Economic Progress Institute, is an incredibly important resource that United Way and many other local organizations have leaned on for almost two decades,” said Larry Warner, DrPH, MPH, United Way’s chief impact and equity officer. “It is an accurate measurement of what our neighbors must earn to simply get by and meet their most basic needs. Unfortunately, it is clear that our communities of color are disproportionately represented among economically struggling Rhode Islanders. Until we address the systemic barriers perpetuating that inequity, we will never fully thrive as a state.”

The Economic Progress Institute’s 2022 RISN shows how program and policy changes instituted over the last two years, including the first increase of Rhode Island Works benefits in 30 years, have improved economic security for many Rhode Islanders. The report also considers policies that would further increase economic security.

The Economic Progress Institute is a nonpartisan research and policy organization, founded in 1999, dedicated to improving the economic well-being of low-income and modest-income Rhode Islanders.