Basic Necessities Affordability Index – Minimum Standard (BNAI-M)

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Basic Necessities Affordability Index – Minimum Standard (BNAI-M), 2026

The Basic Necessities Affordability Index – Minimum Standard (BNAI-M) attempts to answer a question that ordinary inflation statistics do not directly answer:

Can Americans in the lower half of the income distribution afford the minimum necessities required for a safe, healthy and functioning life?

The BNAI-M differs from an expenditure-based affordability index.

An expenditure index measures what households actually spend.

The BNAI-M attempts to estimate what households need to spend to maintain a minimum acceptable standard of living.

This distinction matters because households may reduce food consumption, delay medical treatment, live in inadequate housing, reduce heating or cooling, or postpone necessary transportation expenses when money is unavailable.

Lower expenditure does not necessarily mean better affordability.

Important Status of the 2026 Estimates

The 2024 values are anchored to published federal data.

The 2025 and June 2026 figures are modeled estimates because complete 2025 and 2026 Consumer Expenditure Survey income-decile data are not yet available.

The estimates should therefore be described as:

BNAI-M provisional national estimates.

They should not be represented as official statistics produced by BLS, Census, BEA or another federal agency.

Population Studied

The lower 50 percent of U.S. consumer units is divided into five groups.

Group Income percentile 2024 mean income Estimated 2025 income

The 2024 income figures come directly from the Bureau of Labor Statistics Consumer Expenditure Survey income-decile table.

The 2025 estimates apply BEA's experimental income-distribution nowcast:

  • Bottom 0–20%: +4.1%
  • 20–40%: +5.8%
  • 40–60%: +5.0%

The June 2026 estimates provisionally apply approximately 1.8% nominal personal-income growth during the first half of 2026.

U.S. Bureau of Labor Statistics – Consumer Expenditure Survey Tables

U.S. Bureau of Economic Analysis – Distribution of Personal Income

Household Size Adjustment

Minimum needs cannot reasonably be compared using the same four-person household for every income group.

BLS reports the following average consumer-unit sizes in 2024:

Income percentile Average people Average children under 18

The BLS/Census Supplemental Poverty Measure equivalence scale is used to adjust the two-adult, two-child reference threshold for different household sizes.

Federal Minimum-Needs Anchor

In July 2026, BLS corrected and reissued Supplemental Poverty Measure thresholds covering 2019 through 2024.

The corrected 2024 national reference thresholds for a household with two adults and two children were approximately:

Housing status

The national renter threshold is used as the primary reference for this provisional BNAI-M because renters are especially prevalent among lower-income households.

The BLS Supplemental Poverty Measure threshold includes:

  • food
  • clothing
  • shelter
  • utilities
  • telephone
  • internet
  • household supplies
  • personal care
  • non-work-related transportation
  • a limited allowance for other basic needs

U.S. Bureau of Labor Statistics – Corrected Supplemental Poverty Measure Thresholds

2024 Minimum-Needs Component Shares

The corrected BLS renter threshold assigns approximately the following shares:

Component

The utilities component has been divided for this study into household energy and water/sewer.

The division is based on the relative expenditure proportions among the bottom five BLS income deciles.

Approximately 76.5% of the utility amount is assigned to household energy and approximately 23.5% to water and public services.

Household energy includes:

  • electricity
  • natural gas
  • fuel oil
  • other household heating fuels

June 2026 Minimum-Needs Basket

The following table estimates the annualized minimum-needs basket for each of the five lower-income groups.

Necessity 0–10% 10–20% 20–30% 30–40%

Core BNAI-M Affordability Results

Income percentile Est. June 2026 income Core minimum needs Income remaining

These results suggest that the average consumer unit in the bottom 10 percent does not have remotely enough reported money income to purchase even the core minimum-needs basket without transfers, subsidies, savings, borrowing or assistance from others.

The 10–20 percent group is particularly important.

Its estimated annual income of approximately $25,227 is almost exactly equal to its estimated core minimum-needs requirement of approximately $25,099.

That leaves only approximately:

$128 per year

before adding healthcare expenses or additional work-related costs.

Healthcare is not directly contained within the SPM threshold in the same manner as food, shelter and utilities.

The SPM instead treats medical out-of-pocket expenses as deductions from household resources.

Therefore a healthcare amount must be added separately if the BNAI-M is intended to represent the actual cost of maintaining access to healthcare.

For this provisional version, 2024 BLS Consumer Expenditure Survey healthcare expenditures are used as a healthcare-cost proxy and adjusted to 2026 prices.

This remains a weakness of the model because actual healthcare spending can understate actual healthcare need.

The Census Supplemental Poverty Measure also deducts work-related expenses from household resources.

For 2024, Census reports median weekly work expenses of $41.17.

The SPM methodology uses 85 percent of the median weekly amount.

For this provisional BNAI-M, an annual work-related expense allowance is estimated from the average number of earners in each income decile.

U.S. Census Bureau – Poverty in the United States: 2024

Extended Minimum-Needs Estimate

The extended calculation adds:

  • provisional healthcare allowance
  • provisional work-related expense allowance

to the core BNAI-M.

Income percentile Core minimum Healthcare proxy Work-expense proxy Extended minimum Est. income

Extended BNAI-M Burden

Income percentile

This produces an important preliminary finding.

The first two income deciles appear unable to purchase the extended minimum-needs basket using reported money income alone.

The third decile — households between approximately the 20th and 30th income percentiles — uses an estimated 90.7 percent of income for minimum necessities.

Only approximately:

$3,608 per year

or roughly:

$301 per month

remains after the modeled necessities.

That remaining amount would need to absorb expenses not adequately represented in the model, emergencies, debt service, replacement of durable goods and savings.

Bottom 50 Percent Combined

The consumer-unit-weighted results for the entire bottom half are:

Measure 2024 2025 estimate

Under the extended provisional measure, approximately:

87.8 percent of the combined income of the bottom half is required to meet modeled basic necessities.

This should not be interpreted to mean that every individual household spends 87.8 percent of its income.

It is a weighted aggregate affordability measure.

BNAI-M Index: 2025 = 100

Using the end-of-2025/2025 estimate as the reference:

Income group 2025 BNAI-M June 2026 BNAI-M

The identical percentage movement among the five groups results from the provisional method used to nowcast 2026 minimum costs.

Future versions should replace this simplifying assumption with income-decile-specific inflation and cost indexes.

Historical Core Minimum-Needs Burden

The corrected BLS SPM threshold series makes a longer comparison possible.

Income percentile 2019 2024 2025 estimate

This produces a more nuanced historical result than the expenditure-based index.

For the bottom 50 percent collectively, the minimum-needs burden is estimated at:

  • 71.5% in 2019
  • 72.8% in 2024
  • 71.1% in 2025
  • 72.4% by June 2026

Thus, on the provisional minimum-needs measure, affordability in June 2026 is slightly worse than in 2019.

2019 = 100 Historical BNAI-M

Using 2019 as the historical benchmark:

Income group 2019

This suggests that the combined minimum-needs burden of the bottom half is approximately 1.3 percent higher than in 2019.

The result varies considerably by decile.

Household Energy

Household energy is explicitly separated in the BNAI-M.

It includes:

  • electricity
  • natural gas
  • fuel oil
  • other residential heating fuels

For the representative lower-half consumer units, the modeled 2026 minimum energy requirement ranges from approximately:

$1,265 to $1,612 per year.

This amount should ultimately be improved using regional climate and energy-price data.

A household in Minnesota may require much more heating energy than one in Southern California.

A household in Arizona or Florida may require substantially more cooling energy.

Consequently a future national BNAI should include regional climate adjustments.

In June 2026, BLS reported electricity prices 4.0 percent higher than one year earlier and utility natural gas prices 3.0 percent higher.

Bureau of Labor Statistics – Consumer Price Index, June 2026

What the Index Suggests

The provisional results divide the lower half of the income distribution into three broad affordability conditions.

Severe Shortfall

Bottom 0–10%

Income is dramatically below estimated minimum needs.

Reported income alone cannot support the modeled minimum living standard.

Minimum-Needs Deficit

10–20%

Core necessities consume approximately all available income.

Once healthcare and work-related expenses are included, the average estimated deficit exceeds $5,000 annually.

Highly Constrained

20–30%

The extended minimum-needs basket consumes approximately 91 percent of income.

Only a small cushion remains for unexpected expenses.

Constrained but Positive Cushion

30–40%

Approximately 72 percent of income is required for the extended minimum basket.

Greater but Still Significant Burden

40–50%

Approximately 57 percent of income is required for the extended minimum basket.

Comparison of BNAI-E and BNAI-M

Two affordability measures should be maintained.

Index

The difference between the two is potentially important.

If actual expenditure falls below minimum required expenditure, households may be coping by:

  • eating less or purchasing lower-quality food
  • delaying medical treatment
  • using inadequate heating or cooling
  • living in overcrowded or substandard housing
  • postponing vehicle repairs
  • going without internet or telephone access
  • borrowing money
  • relying on relatives
  • using public benefits
  • drawing down savings

Therefore reduced spending cannot automatically be interpreted as improved affordability.

Major Limitations

This remains a provisional research model.

Important limitations include:

  • 2025 and 2026 income-decile data are estimates.
  • The BLS SPM threshold is itself expenditure-derived rather than a purely engineering-based minimum-needs basket.
  • Healthcare spending is currently represented by a provisional expenditure proxy.
  • Work-related expenses are not purely transportation costs.
  • The national model does not yet adequately account for geographic differences.
  • Housing costs vary dramatically between regions.
  • Heating and cooling requirements vary by climate.
  • Public transportation availability varies greatly.
  • Medicaid, SNAP, housing subsidies, LIHEAP and other assistance can substantially change a household's actual out-of-pocket burden.
  • Taxes and refundable tax credits should ultimately be incorporated.
  • Consumer-unit means can obscure substantial variation within each income decile.

The next generation of the BNAI-M should calculate two versions:

BNAI-M Market Cost

The cost of purchasing minimum necessities without means-tested government assistance.

and

BNAI-M Net Household Cost

The amount actually required from household resources after:

  • SNAP
  • Medicaid
  • ACA premium subsidies
  • housing assistance
  • LIHEAP
  • refundable tax credits
  • other major public benefits

This would allow the index to measure both:

the underlying cost of necessities

and

the effectiveness of the social safety net in making those necessities affordable.

Preliminary Conclusion

The provisional 2026 BNAI-M suggests that basic necessities place an extremely heavy burden on Americans in the lower portion of the income distribution.

The average consumer unit in the bottom 10 percent has reported income far below the estimated cost of even the core minimum-needs basket.

Households in the 10th through 20th percentiles appear approximately able to meet core minimum expenses only before healthcare and additional work-related expenses are included.

After those expenses are added, the 10–20 percent group shows a modeled annual shortfall of approximately $5,200.

The 20–30 percent group has only approximately $3,600 annually remaining after the extended minimum-needs basket.

For the bottom 50 percent collectively, the extended provisional basket consumes approximately 87.8 percent of modeled income.

The core BNAI-M also indicates that affordability deteriorated by approximately 1.9 percent during the first half of 2026 compared with the 2025 estimate.

Compared with 2019, the aggregate core minimum-needs burden is approximately 1.3 percent higher.

These findings suggest that the economic circumstances of the lower half of the population cannot adequately be understood by headline inflation or wage growth alone.

The more relevant question is how much income remains after the unavoidable costs of maintaining a safe and functioning life have been paid.

Primary Sources

See Also

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