Economic insecurity in the US is at its highest point in 25 years, according to a report released this week.

The Rockefeller Foundation released a new Economic Security Index (ESI) that measures the effect of income loss and rising medical costs on Americans. It concludes that the recession has made Americans a lot less secure, but a sense of security has been on the slide for years.

Almost one in five Americans are said to be insecure in 2010, compared with less than one in eight in 1985, according to the report from the foundation and Jacob Hacker, a political science professor at Yale University. "There is a clear long-term upward trend in the economic insecurity of American families," Hacker said in a statement. "And while economic insecurity is substantially higher for less affluent and educated Americans than for other groups, it has risen across virtually all parts of American society - - it's an issue squarely confronting the American middle class."

The index tracks Americans who have had a year-over-year fall of 25% or more in income after medical costs but don’t have enough savings to offset the plunge. “Security is really about loss,” said Hacker. “We wanted to try to come up with a measure that measures security against a large economic loss.”

The ESI was at 12.2% in 1985 and at 13.7%  in 2007and is projected to hit 20.4% for 2009.

The index is produced from a mix of various government surveys but is mainly based on the Census Bureau’s Survey of Income and Program Participation, which tracks the same people over several years.

As to the reasons for the growing insecurity, the report says first, the earnings of male workers have become more unstable since the 1970s, and because men still contribute more to household income on average than do women, growing variability of male earnings has a major effect on overall household income stability. Second, transfer income - - cash benefits received by families from government programs - - appears to have become more unstable since the 1970s. Third, the rising prevalence of two earner couples does not appear to have provided a big income cushion to families. This may reflect the fact that income gains for the middle class have been relatively muted over the period studied so that families are working harder for only modestly more income while facing large price increases for health care.

“The ESI data allows us to see that behind the economic cycle, there is a clear long-term upward trend in the economic insecurity of American families,” Prof. Hacker said. “[W]hile economic insecurity is substantially higher for less affluent and educated Americans than for other groups, it has risen across virtually all parts of American society - - it’s an issue squarely confronting the American middle class.”

Key findings from the report:

• The index increased by one third between 1985 and the pre-recession year of 2007. It increased by half between 1985 and 2009. The proportion of Americans experiencing big income dips, measured with more limited data, has increased even more since the 1960s.
• The index classifies 46 million people as insecure in 2007 - -  before the recession.
• The index broadly tracks unemployment, but has proportionately spiked more than the unemployment rate during the recession.
• It takes an average individual experiencing an income shock six to eight years to return to the same income level.