In a slow recovery, any sign of improvement is welcome.More Americans felt financially secure in 2011 than they have since 2005, according to a report released by the Economic Security Index in October. Yet despite the surge in economic security the report notes that nearly 20 percent of Americans still experienced a significant loss of revenue in 2011.
The Economic Security Index is a publication by the Institution of Social and Policy Issues at Yale University.
For the past 25 years ESI has measured household economic instability by tracking Americans who experience a 25 percent or greater loss of household resources. This could be because of the loss of a job, but it also takes into account resources after paying for medical care and financial debts.
The percentage of people in the United States that feel economically insecure dropped from 20.3 percent in 2010 to 18.9 percent in 2011.
Craig Israelsen, a family finance professor at Brigham Young University questioned the validity of ESI because employment is the largest factor of economic security.
"This is just another way of coloring the number of people who have experienced job loss or wage reduction," Israelsen said. "Because savings, most people don't have savings, so it's kind of a none issue. It really comes down to their current income."
Juliette Tennert, chief economist and deputy director of the Governor's Office of Planning and Budget Demographic and Economic Analysis said that ESI is trying to combine economic factors. Read more: Deseret News
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