Going beyond anecdotes, a "distress index" developed by New America Media and the Stanford Center for the Study of Poverty and Inequality for the first time provides a measure of the impact of the Great Recession on individuals most deeply affected.
In its first application, the index [PDF] looked at economic distress in San Francisco and found that based on 11 indicators of economic hardship, the distress index "is 76 percent higher than the average levels of economic distress during the dot-com bust a decade ago, and almost double what it was at the beginning of the Great Recession."
"Looking just at 2010, our index is showing little sign of abating and returning to pre-recession levels," said Christopher Wimer, the lead researcher on the project and associate director of the Stanford center. On a scale of zero to one, the project currently places the distress index at about 0.7, compared to about 0.4 in December 2002.
"Amidst the headlines trumpeting a recovery in America, we've created a tool for the media to use to track, on a local level and in the moment, how their communities are really doing," said New America Media executive director Sandy Close. "In this instance we've applied the index to San Francisco, but as a tool, the index, using local indicators, can be applied anywhere in the country."
The index, underwritten by the San Francisco Foundation and the Wallace Alexander Gerbode Foundation, was unveiled at a forum in which I participated at the San Francisco Foundation offices last week.
What makes the index innovative is that rather than being based on government reports a year or two old – "lagging indicators," as one forum participant described it – it is based on current data. Factors include enrollment in CalWORKs, CalWORKS Homeless Assistance requests, bankruptcies, food stamp applications, food pantry visits, enrollment in Medi-Cal's Medically Needy program, unemployment insurance status, and participation in the County Adult Assistance Programs.
All the data in the index is up to date through June 2010. Stanford's Wimer says that "if anything, indicators in July and August are even worse," which means that the updated distress index is likely to be even higher.
Michael Stoll, executive director of San Francisco Public Press, said that using "leading indicators" like these should help journalists identify trends "before they occur, not afterwards."
Sara Ying Rounsaville, a vice president at the San Francisco Foundation, said the distress index has already been useful to the foundation and its donors in targeting scarce philanthropic dollars. "The distress index is going to be a critical tool for us in making sure we are hitting the spot in putting our resources where the needs are greatest," she said. "In the big picture, it is important to shift the conversation from large-scale macro-economic indices like the Dow Jones Industrial Index to how many people are without work or looking, how many families are without food, and how many homes are being foreclosed."
New America Media's Close said that the distress index is still a work in progress and that her organization and the Stanford center will explore ways to extend it to other regions around the state, and to make it an effective tool for journalists covering their local communities.
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