Updating the True Cost of Economic Security: What It Takes to Thrive in the US
As affordability tops agendas from the Trump White House to Democratic statehouses in early 2026, an updated measure reveals more than half of Americans still cannot cover the full costs required to thrive.
Key takeaways
- •The Urban Institute's True Cost of Economic Security measure, now refreshed with 2023 data and enhanced to include disability-care expenses plus homeownership resources, builds on its 2022 finding that 52 percent of people lived in families below the threshold.
- •Persistent high costs for housing, childcare, healthcare and essentials have sustained the squeeze into 2026 despite moderating inflation, leaving working families with average shortfalls of $31,300 and little margin for shocks.
- •The broader metric exposes tensions between expansive definitions of thriving—which credit public benefits and home equity yet flag overlooked disability burdens—and traditional poverty lines that understate the scale of economic insecurity.
Beyond the Poverty Line
Affordability has become the rare issue uniting disparate politicians in 2026. President Donald Trump, New York City mayor Zohran Mamdani and the newly elected governors of New Jersey and Virginia have each placed reducing living costs at the centre of their platforms.
Conventional yardsticks such as the federal poverty line capture only acute hardship. The True Cost of Economic Security measure instead calculates every expense a household must meet to participate fully in American society and the economy—housing, food, transportation, healthcare, childcare, technology, student debt, taxes, miscellaneous needs and saving for the future—then subtracts all available resources, from earnings and private income to government supports.
The original analysis, published in November 2024 using 2022 data, put the national median threshold at roughly $115,000 and found 52 percent of people fell short. State-level breakdowns released in January 2025 showed the share ranging from 40 percent in North Dakota to 66 percent in Hawaii, with shortfalls averaging $31,300 for those below the line.
The 2023 update incorporates two critical refinements: the added costs of caring for individuals with self-care disabilities, and the financial advantages that flow from homeownership. These changes matter because they shift the measured position of millions—raising the bar for households with disabled members while recognising equity and lower effective housing costs for owners.
The concrete stakes are immediate. With Congress and the administration debating tax policy, housing initiatives, benefit levels and wage floors in the coming months, an inaccurate benchmark risks either over-allocating scarce funds or leaving working families—many just above official poverty—without adequate buffers against job loss, medical bills or retirement shortfalls. In high-cost metros the gaps translate directly into delayed family formation, reduced educational investment and heightened vulnerability to downturns.
Less discussed are the trade-offs the measure surfaces. Defining “thriving” to include savings and technology invites criticism that it inflates needs to justify larger government outlays; yet omitting disability expenses or homeownership realities would understate real pressures on specific groups and distort policy targeting. The result is a data point that can either inform pragmatic cross-party solutions or fuel disputes over the proper size and shape of the safety net.
Sources
- https://www.urban.org/research/publication/measuring-true-cost-economic-security
- https://www.urban.org/urban-wire/how-many-people-your-state-have-resources-thrive
- https://www.urban.org/events/updating-true-cost-economic-security-what-it-takes-thrive-us
- https://www.cbsnews.com/news/affordability-2025-inflation-food-prices-housing-child-care-health-costs/
- https://www.theguardian.com/business/2025/nov/23/affordability-crisis-inflation-costs
- https://www.fpwa.org/resource-center/in-the-news/new-urban-institute-report-on-true-cost-of-economic-security-in-america-finds-more-than-half-of-all-people-in-u-s-lack-economic-security/