Whether you call it “affordability” or “inequality,” economic insecurity is emerging as one of the top issues in this year’s midterm election.
New work by an Ohio-based analyst sheds some light on why: In a city-by-city breakdown, it shows that vast numbers of Americans are one big, unexpected expense away from poverty.
For example, if you look at families of four with one, median-level income, almost all are just one $15,000 emergency away from poverty, it shows.
But the “income fragility” analysis goes further, showing that even as families move up the income ladder they often remain insecure.
“Think of this dashboard as a simulation of what your life could be like under different scenarios,” said Eric Pachman, founder of the data analysis nonprofit Data 4 the People.
“If I or my wife wanted to get the median-income job in an area, how much in surprise expenses could I have before I hit the poverty level? It’s a simulation. You can do that with any metropolitan statistical area in this country.”
Pachman built a visualization using U.S. Census Bureau data about income and poverty to show how they interact in each such area, known as an MSA (metropolitan statistical area).
Take the Dayton-Beavercreek-Kettering metropolitan-statistical area where Pachman lives.
The median income for an individual there is $48,580.
A $14,500 surprise expense for such a single-income family of four there is the tipping point into poverty.
That’s one of the highest in Ohio.
In Columbus, where the cost of living is greater, $11,500 is the tipping point.
Median income is the amount of money a person makes if everybody in a metropolitan area was put on a list from highest to lowest and that person is in the very middle.
Pachman used that number to keep the highest and lowest earners from skewing things up or down the way they would if he used average income.
Looking at incomes for families of four with a single earner also helps screen out other complexities like day care.
According to Groundwork Ohio, those costs ran from $9,600 to $12,400 per child in 2023 depending how old kids were.
So if your family of four has two working parents and two kids in need of care, that would subtract at least $19,000 from household income to accommodate the additional expense.
The interactive map Pachman built allows you to toggle up and down in terms of income and the size of emergency expenses.
The picture it paints for families in the lower half of income distribution is particularly bleak.
If you look at families of four with a single income that is half the median, people in the vast majority of U.S. cities couldn’t even tolerate an unexpected bill of $500. And it gets worse from there.
“Everyone in the 10th percentile is living deeply in poverty and has no money for surprise expenses,” Pachman said.
“Even people in the 25th percentile — a quarter of this country — they’re living deeply in poverty and have almost no money for surprise expenses.”
As everybody knows, unexpected expenses happen and they add up quickly.
Pachman’s cat recently had an ear infection that cost $1,500 to treat.
Sure, you can let sick pets die, but that’s harder to do than it might sound — especially when kids are involved.
You probably wouldn’t let yourself or a family member die if they got sick.
A 2022 analysis showed that insured people with a hospital stay of any length on average had $3,151 in out-of-pocket medical expenses for the year. If you’re uninsured, the bill will likely be much, much higher.
According to the KFF Health Tracker, the average out-of-pocket cost of childbirth is $2,500 to $3,000. But again, if there are complications they can be much greater.
Every time you drive your car, you risk getting in a wreck. The other driver might be uninsured, or your insurer could total out your car and force you to buy another for thousands more than the insurer paid you for your old one.
Your kid could get arrested for doing something stupid and now you have a lawyer to pay. The list of potential surprise expenses is endless.
As possible evidence that Americans are increasingly less able to handle such bills, the Wall Street Journal earlier this month reported that record numbers of Americans are dipping into their 401(k)s.
Pachman’s goal in doing the analysis was to help more-comfortable people understand the deep insecurity huge numbers of their neighbors live with.
“I’m trying to build empathy with data,” he said. “If you’re making $200,000, $250,000, you may not care about this. But put yourself in the shoes of a median person — 50% of the people you come across in Costco or walking down the street — this is their life.”
Perhaps sapping others’ empathy is that many somewhat higher-income people have financial problems of their own.
Pachman did a thought experiment showing how, as a person moves up the income ladder, income insecurity might follow.
Using census data for Salt Lake City, he created a fictional person there who moves from the median income to the 90th percentile — $126,570.
That person and his or her family might finally achieve comfort — but only if they live within many of the budgetary constraints they did when they were poorer.
If they buy a four-bedroom house, the mortgage and groceries there are likely to cost about $75,000 a year, Pachman said.
Then there are the other things people might think they need once they’ve “made it.”
A $5,000 family vacation to Disney World or a cruise. A new car — average cost $49,191, according to Kelley Blue Book. Or a new truck — average cost more than $60,000, according to Cars.com.
Maybe their kids play sports. That expense increased 46% between 2019 and 2024, to $1,016 per sport, per child, according to the Aspen Institute. For some sports, that expense can eclipse $10,000.
They can go to an NFL game, where the average per-ticket cost is $312 — plus however many $10 beers you drink and how much you lose on your sports-betting app.
They can take their partner out to a nice restaurant, where the check can easily run past $200.
Amid all this, they’re supposed to be saving for their kids’ college — average cost, $38,270 per student, per year, according to the Education Data Initiative.
If you spend on some of those things, worry about your finances and wonder how so many other people can afford them, you’re not alone, Pachman said.
He created his fictionally successful family to show how easy it is to substantially increase income in the United States and still feel broke.
It might seem weak or irrational to spend on all those unnecessary things, but people face enormous pressure to do so anyway, Pachman said.
“The power of advertising… The power of social media… The power of influencers,” he said. “It’s virtually impossible to ignore.”