As caring professionals who provide assistance and advocacy to help improve and empower people’s lives, social workers have a keen interest in the economic well-being of individuals and families.
Financial security can be an indicator of a good quality of life. Research outlined in Proceedings of the National Academy of Sciences in 2021, for example, showed higher income correlates with a greater sense of well-being. And a 2020 article in PLOS Medicine examined the link between economic status and overall health, noting that adults with lower incomes have experienced declining health outcomes over the past 40 years.
But economic well-being comprises more than just income level, says Dr. Youngmi Kim, associate professor in the School of Social Work at Virginia Commonwealth University. Kim’s research focuses on the relationship between financial challenges and health, development and personal well-being.
Social workers, she says, play a key role in ensuring people have access to resources for economic well-being. They help clients connect with services and build knowledge to address their financial concerns.
What Is Economic Well-Being?
Economic well-being means having financial security now as well as in the future. Individuals, families and communities can all experience economic well-being.
“Economic well-being is often assessed by income and also a variety of other measures, including economic resources, economic strain, financial knowledge and behaviors, and financial stress,” Kim says. “The term is interchangeably used with financial well-being, financial health and others.”
Present Financial Security
One element of economic well-being is “present” financial security. This refers to an individual, family or community being able to meet the costs of day-to-day basic needs. Among those costs are:
- Health care
- Child care
Those who have present financial security have the flexibility to make choices about how to use their money. Overall, they are satisfied with their financial situation and their jobs.
Future Financial Security
Future financial security is the other component of economic well-being. People with future financial security have the resources to:
- Sustain a sufficient level of income throughout their lives
- Handle financial emergencies
- Meet their financial goals
Economic Well-Being’s Impact
The level of financial security — in the short term and the long term — can have a significant impact on people’s lives. Both children and adults feel the effects of economic well-being, Kim says.
“Failing to acquire adequate levels of well-being results in adverse outcomes in many ways across the lifespan,” she says.
Growing up in poverty can negatively affect cognitive, socio-emotional and behavioral development in young children, Kim explains. Children and adults who live with limited economic resources can also face challenges to their physical and mental health.
On the other hand, those who have opportunities to build financial security can realize a host of positive effects.
Kim was among a team of researchers investigating the impact of the widespread use of Child Development Accounts (CDAs). According to results published in 2021 in RSF: The Russell Sage Foundation Journal of the Social Sciences, increased wealth was just one outcome of using these accounts that help families save for their children. Higher parental expectations for their children’s education and better socio-emotional development among young children were among the other positive effects of using these accounts.
What Factors Can Influence Economic Well-Being?
A broad range of factors can affect the level of economic well-being an individual or family experiences. Kim notes that these variables include those that are specific to the individual as well as those that are macroeconomic in nature.
Individual issues include education, skills, behaviors and health status. Macroeconomic concerns, like labor market structure and geographic location, also can influence whether someone is likely to experience economic well-being.
A 2021 report from the Center for American Progress examined the causes of poverty among children, noting that many of these issues relate to the struggles of their parents or guardians. Costs associated with raising children can leave families in poverty, as can household turmoil and unemployment.
When adults face financial challenges in meeting their basic needs, the report noted, their children often live in economic instability. And too frequently, these children don’t have the social supports to prevent the negative outcomes that poverty can create.
Vulnerable Populations and Economic Well-Being
Kim points out that unequal opportunities and discrimination also are key contributors to financial insecurity.
“One of the important reasons that poverty exists in the United States is related to the unequal economic structure, where income mobility is constrained by types of occupations and employment status — which are also tied to job stability and benefits,” she says.
Racial and ethnic minorities are among the vulnerable populations at greatest risk of experiencing poor economic well-being.
According to data from the U.S. Census Bureau, between 1967 and 2021, Black and Hispanic populations consistently had the lowest median household incomes.
The Federal Reserve reported in 2021 that, in the United States, the average household of a Black, Hispanic or Latino family earned about half as much as the average household of a white family. The report also indicated that wealth inequality has grown in recent decades.
“Discrimination is another important factor in the United States creating barriers to employment, segregation, wage gaps and inequitable treatment in policy and practices,” Kim notes.
How Does Social Work Promote Economic Well-Being?
Social workers must understand how economic well-being affects individuals and their families as well as the communities in which they live. This insight can help social workers recognize and address the challenges that contribute to economic difficulties — as well as the problems that can stem from financial issues.
To help individuals and families struggling with financial insecurity, social workers connect them to community resources that can provide direct assistance. They also advocate for laws and policies that help ensure economic well-being for all populations.
“Social workers see the challenges that folks experience economically and how they affect all different aspects of their lives,” Kim says. “Social workers often talk about meeting clients where they are, and this is a priority when addressing economic well-being: figuring out how and what we can do to support families and meet their needs sustainably.”
Securing Resources for Adults
Social workers help people cope with and prevent issues that impact their health and well-being, including financial concerns. One of the ways in which they do this is by connecting clients with community resources. According to Kim, these resources can assist with issues such as:
- Supplemental Nutrition Assistance Program (SNAP) assistance
- Job searches
- Government benefits
Identifying Resources for Children
For children, resources to address issues related to financial insecurity are often school-based. Among these resources are:
- School social workers
- Food pantries
- After-school activities
The social work profession is especially focused on helping those who are oppressed and vulnerable, including those living in poverty. They recognize these populations historically have had limited or no access to financial programs and services.
According to Kim, “Social workers should help marginalized populations to ensure and build knowledge and skills about finances and to increase access to beneficial programs and services for their economic well-being.”
Help Promote Economic Well-Being for All
Individuals who are interested in building the skills to help individuals, families and communities find economic well-being should explore the Virginia Commonwealth University online Master of Social Work Program format.
With a curriculum focused on championing human rights as well as fostering cultural competence, the program is designed to elevate your work to ensure a positive quality of life for all populations.
Discover how VCU’s Master of Social Work Program can help you achieve your professional goals.