FPI: Make Families Great Again? Data Is the Key

Wendy Warcholik,

Editor’s note: This column was co-authored by J. Scott Moody, M.A.

President Donald Trump was elected on a promise to “Make America Great Again.” An improvement in the well-being of families will be an important measuring stick with which to gauge his success. So, politicians in states like West Virginia, New Mexico, and Mississippi, where families are doing especially poorly, could soon be the targets of a presidential tweet storm.

Strong families have a positive influence on the economy and vice versa. But the state of American families cannot be analyzed simply in terms of their economic status. Both social and economic factors have a direct impact on the ability of families to flourish, and measuring this connection is no easy task. In fact, the annual Family Prosperity Index (FPI) is the only tool that offers a holistic picture of how well families in America are doing.

The FPI analyzes publicly-available, mostly government-produced data on 60 different variables that include everything from personal income to educational attainment, single-parenthood to poverty rates, entrepreneurship to religious attendance, and a host of other variables in six categories – economics; demographics; and family self-sufficiency, structure, culture, and health. Because this index doesn’t work solely with economic data, it provides a more comprehensive assessment of how well – or poorly – families are doing in a particular state and highlights areas in need of improvement. By ranking states against each other, the FPI allows for comparisons of overall prosperity scores as well as their specific components.

lootmoney_small FPI: Make Families Great Again? Data Is the Key Economy

And the 2017 findings are illuminating. For example, between 2016 and 2017, Maryland saw the most precipitous drop in its overall FPI rank, falling nine places to 28th from 19th.

Its plummeting score for entrepreneurship (from 14th to 28th) is primarily to blame for the Free State’s steep decline. West Virginia is still stuck at the bottom of the heap in 2017, while Utah maintains its status as the top state in the nation for family prosperity.

One factor in particular, demographics, is shown to affect several states’ long-term capacity to facilitate an environment for families to thrive. Take, for example, Pennsylvania – a state that played a pivotal role in the presidential election. The combination of an aging population, relatively low birthrate, and less than optimal out-migration rate (number of people leaving the state) puts the Keystone State in the bottom 10 in the demographics category. In addition, in the family structure category, Pennsylvania’s marriage rate ranks 42nd in the nation.

All of these factors influence each other. Studies show that married men, in particular, earn more than single men, benefitting from what is known as a “marriage premium.” Marriage rates affect birthrates, and over time, birthrates affect the age of a state’s population. Similarly, if economic and cultural conditions – employment, educational opportunity, crime rates, etc. – improve, fewer people are likely to leave the state. While some of these factors are affected by government policies, others are better addressed with the engagement of private institutions and communities.

This kind of assessment is useful for policy makers, community and business leaders, religious organizations, and civic-minded citizens interested in improving their communities. Individuals and families, too, can utilize the index to evaluate the future prospects of their own states as well as others that may offer more opportunity.

Many American families are burdened by life circumstances – job loss, drug addiction, divorce, crime, to name a few – that are stifling their own prosperity and that of their communities. It is no surprise that in a poll taken the day before the election, 65% of respondents said the country was on the wrong track, and 30% said it was heading in the right direction. As Congress and President Trump work to boost the economy, they might take a few cues from states like North Dakota, Nebraska, and others in the FPI 2017 top ten that are creating environments for families to thrive.

Everyone – on the right and the left – can use the Family Prosperity Index as a tool to better understand the issues important to families – or ignore them at their peril.

Economists and American Conservative Union Foundation senior research fellows Wendy Warcholik, Ph.D., and J. Scott Moody, M.A., are the authors of the Family Prosperity Index, the centerpiece of ACUF’s Family Prosperity Initiative. They also created the Tax Foundation’s State Business Tax Climate Index, now in its 15th year of publication.