Addressing Economic Insecurity (2024)

Addressing Economic Insecurity in the U.S.

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In June of 1934, President Franklin Delano Roosevelt created the Committee on Economic Security with the mandate to craft policy proposals that would provide “security against several of the great disturbing factors in life” for all U.S. residents. Whether they knew it at the time, the members and staff of the Committee stood at the outset of a new era of political economy.

The programs created during the New Deal Era reflected the Committee’s work, which was aimed at a singular goal – assured income:

“A program of economic security, as we vision it, must have as its primary aim the assurance of an adequate income to each human being in childhood, youth, middle age, or old age—in sickness or in health.” - Report to the President of the Committee on Economic Security

The 1934 Committee’s goal was to craft policies of economic security to provide a level of protection commensurate with the economic hazards of the times. That goal–conceived in a different time and in the face of different economic hazards than today’s–served as the inspiration for the National Academy of Social Insurance’s 2019–2021 Economic Security Study Panel.

The Study Panel spent two years researching and documenting the extent of contemporary economic insecurity in the U.S. and assessing a range of policy options to improve it.

This report was written in a unique context—during the COVID-19 pandemic—which both demonstrated and questioned the efficacy of existing programs and the legislation passed to address the urgent needs of the moment.

The Four Pillars of Economic Security

The Panel’s approach to boosting economic security is grounded in the coordination of programs within four key policy pillars: Labor, Benefit, Protection, and Equity. This unique framework emphasizes the complexity of economic insecurity and the need for a multifaceted integrated approach to effectively address it.

Labor and benefit policies function to ensure that all households have access to adequate income and resources – through work or programs that distribute cash or in-kind support. Protection and equity policies address factors that actively detract from economic security, such as high interest payments on debt, and employer discrimination against jobseekers with criminal records.

The Panel defined the four pillars broadly, with a sample policy option illustrating each:

Labor policy

The active regulation of the labor market, including the promotion of work and return to work. (E.g.: Increase access to transitional jobs programs.)

The Study Panel analyzed the following Labor policies:

• Raising the minimum wage
• Improving or eliminating subminimum wages
• Updating overtime and work scheduling rules
• Updating wage and hiring rules
• Improving labor law enforcement
• Providing support for unemployed workers

Benefit policy

The taxing and spending of the federal government that results in money or resources transferred to households through explicit transfer programs, social insurance systems, or tax expenditures. (E.g., Automatically increase SNAP benefits for families with children during summer months while school is not in session)

The Study Panel analyzed the following Benefit policies:

• Improving eligibility design for means-tested spending programs
• Updating Supplemental Nutrition Assistance (Food Stamps)
• Updating Supplemental Security Income
• Creating a universal income base for all adults
• Expanding Social Security Old-Age, Survivors, and Disability Insurance
• Improving OASDI financing
• Reforming Unemployment Insurance
• Improving caregiving supports
• Updating the Earned Income Tax Credit
• Updating the Child Tax Credit
• Implementing a negative income tax

Protection policy

Policies that protect income from either labor or transfer sources through promoting savings, reducing debt, accessing credit, and regulating key financial actors. (E.g., Reform court-imposed, jail-imposed, and prison-imposed fees)

The Study Panel analyzed the following Protection policies:

• Promoting savings for retirement
• Promoting savings for pre-retirement
• Regulating certain private debt practices
• Regulating certain public debt/fees practices
• Increasing access to services

Equity policy

Policies that address the severe inequities among demographic groups. (E.g., Invest in universal, high-quality preschool education.)

The Study Panel analyzed the following Equity policies:

• Removing barriers to opportunity for people with criminal records
• Addressing the racial wealth gap
• Exploring a path to citizenship for undocumented immigrants

A successful approach to ensuring economic security must embrace this comprehensive perspective with support from each pillar and an understanding that the pillars complement and interact with one another.

Acknowledging that significantly boosting the nation’s economic security, especially among workers and communities that have historically been marginalized, will require substantial new investments, the Study Panel then identified and explored a range of options to finance them through increased tax revenue.

The Need for Action

The United States has made significant progress in improving its residents’ and communities’ wellbeing and economic security in the 87 years since the start of President Franklin Roosevelt’s New Deal. Still, hundreds of thousands of people across the country lack decent shelter, millions struggle in poverty to afford basic necessities, and millions more live in unnecessary anxiety trying to stay out of it. Even for those who appear well off, a rapidly shifting economy has injected new degrees of precarity and barriers to economic security.

Economic Security for the 21st Century presents the four pillars as a useful framework for addressing the many facets of economic insecurity in U.S. society today. Drawing on each of these pillars, policymakers may choose from a broad range of options to radically improve economic security across the country. On the heels of some of the boldest – and most successful – federal investments in family well-being over the past two years, this report presents a host of opportunities to build on those lessons and ensure that the wealth the United States generates is more broadly shared.