A decade after the recession, 40% of U.S. families still struggling

• 40 percent of U.S. families, including middle-class households, sometimes struggle to afford housing, utilities, food or health care, according to the Urban Institute.
• Nearly 1 in 5 families said they had experienced difficulty paying for food or medical care. 
  
• About 60 percent of low-income people surveyed by the nonpartisan think tank said they couldn't pay their bills at times.
  

Four in 10 Americans sometimes face what economists call "material hardship," struggling to pay for basic needs such as food and housing, according to a new study from the Urban Institute. Even middle-class families routinely struggle financially and are occasionally unable to pay their bills. 

The finding is striking given the U.S. has experienced a decade of economic growth in the decade since the recession ended. The unemployment rate is at its lowest in half a century, and the stock market has enjoyed a decade-long bull run. But for many Americans, incomes haven't kept up with the rising cost of necessities such as housing and health care, resulting in financial anxiety.

About 39 percent of Americans ages 18 to 65 experienced at least one type of material hardship last year, statistically unchanged from the 39.3 percent who suffered hardship in 2017, the nonpartisan think tank found. The study spans the first two years of the Trump administration, as well as the first year of the tax overhaul. Yet there was little progress easing the financial challenges experienced by U.S. adults last year, the Urban Institute said.

"The modest declines in hardship during the current favorable economic environment suggest further progress will require additional policies to raise and stabilize incomes, offset the cost of essential expenses and protect families against adverse financial shocks," the study noted.

The Urban Institute started tracking material hardship in 2017 ahead of proposed cutbacks in federal safety-net programs, such as proposals to add work requirements to food stamps and Medicaid. Some U.S. states have already moved forward with such plans, such as Maine's work requirement for its food stamp recipients. 

The think tank is revisiting the survey each year to measure changes in how American families are are faring financially. The study surveyed more than 7,500 adults about whether they had trouble paying for housing, utilities, food or health care. 

Food and health care worries

The hardships experienced by U.S. families underscores that income is only one part of the equation, the Urban Institute said. "It is also important to consider the cost of major expenses such as housing, utilities, child care, transportation and health care" on household budgets, it noted. 

Food insecurity and medical bills remain a sticking point for many families, with nearly 1 in 5 families saying they had experienced difficulty paying for food or medical care. 

But the researchers found that even middle-class families are struggling with the bills. Almost 1 in 3 households that earn at least twice the federal poverty level -- equivalent to annual income of $50,200 for a family of four -- say they struggled with meeting basic needs. The bills that caused them the most trouble -- medical and food costs, the study found. About 1 in 7 middle-class families said they struggled with medical bills or didn't receive medical care because of the cost. 

To be sure, low-income families -- those earning less than twice the federal poverty level, or less than $50,100 for a family of four -- are struggling most. About 60 percent of those surveyed said they struggled to pay their bills, with 53 percent reporting paying more than half their income on housing, considered a severe housing burden.

"These housing-cost burdens are likely to constrain low-income families' ability to pay for housing and other essential expenses, such as food, medical care, transportation, and child care," the authors noted.