CFED shows shocking statistics on poverty in America -- and dangerous implications for education
The recent release by the Corporation for Enterprise Development (CFED) of their 2012 Assets & Opportunity Scorecoard contains alarming statistics, an unconscionable portrait of this democratic nation:
"Nearly half of U.S. households (43 percent) have almost no savings and 27 percent are "asset poor," meaning they lack both savings and other assets to cover basic expenses for just three months if a layoff or other crisis leads to loss of income."
The downward trend is even more alarming: "The number of asset poor families has increased by 21 percent from one in five families to one in four families since the release of the 2009-2010 Assets & Opportunity Scorecard. " These poverty statistics are alarming, especially as I read about the multiple attacks on poor children -- for example, security guards groping students at inner-city schools (Bryant Muldrew's blog earlier this week) and tax cuts causing budget shortfalls and teachers layoffs, resulting in increasing class sizes in schools in low-income communities where children have the greatest needs. Huge numbers of Americans are losing assets at a frightening pace... more and more families are losing access to the American Dream. Andrea Levere, president of CFED writes, "Without savings, few will be able to build a more economically secure future, including buying a home, saving for their children's college educations or building a retirement nest egg... [ the Scorecard findings are] "particularly disturbing in the context of precipitous drops in incomes for many Americans and widening of the wealth gap between the richest and poorest households."
This loss of assets has a tremendous impact on families and schools, as teachers are forced to deal with hungry students, and children who are constantly on the move from one home to another. Parents are stressed and stretched and unable to pay for health care. The social protections and well paying jobs that we used to assume were commonplace, are no longer. Nevertheless, it was not that long ago, that our country was moving in the opposite direction, where more and more families were building assets and schools' services were increasing. The CFED data below is not our vision of America but a nightmare created by deliberate policies, instituted by politicians of both parties, serving the most self-interested of billionaires and their ultra-conservative ideologues.. The American dream has been deferred by policies that undercut the security of our families. But it can be reversed by student organizers like those working on the National Student Bill of Rights, Occupy activists and you.
Here is the CFED press release and data:
Jan 31, 2012
Growing Number of Americans Can't Cover Basic Expenses if Job Loss or Other Emergency Strikes
2012 Assets & Opportunity Scorecard Shows Major Increase in "Asset Poor" Households
Washington, DC--Nearly half of U.S. households (43 percent) have almost no savings and 27 percent are "asset poor," meaning they lack both savings and other assets to cover basic expenses for just three months if a layoff or other crisis leads to loss of income, according to the 2012 Assets & Opportunity Scorecard, released today by the Corporation for Enterprise Development (CFED).
The number of asset poor families has increased by 21 percent from one in five families to one in four families since the release of the 2009-2010 Assets & Opportunity Scorecard. The asset poverty rate is now nearly twice as high as the Census Bureau's official income poverty rate of 15.1 percent.
For the first time the Assets & Opportunity Scorecard includes a measure for "liquid asset poverty," which excludes assets such as a home, business or car that can't easily be converted to cash. It consequently provides a more realistic picture of the resources families have to meet emergency needs. According to that measure, 43 percent of households nationwide are "liquid asset poor" with little or no savings to fall back on if emergency strikes.
"Growing numbers of families have almost no savings or other assets to see them through if they lose their jobs or face a medical crisis," said Andrea Levere, president of CFED. "Without savings, few will be able to build a more economically secure future, including buying a home, saving for their children's college educations or building a retirement nest egg."
Levere added that the Scorecard findings are "particularly disturbing in the context of precipitous drops in incomes for many Americans and widening of the wealth gap between the richest and poorest households."
The Assets & Opportunity Scorecard offers the most comprehensive look available at Americans' ability to save and build wealth, fend off poverty and create a more prosperous future. The Scorecard explores how well residents are faring in the 50 states and the District of Columbia and assesses policies that are helping residents build and protect assets along five issue areas: Financial Assets & Income, Businesses & Jobs, Housing & Homeownership, Health Care and Education. The 2012 Scorecard assesses states across 100 outcome and policy measures in these five areas to determine the ability of residents to achieve financial security.
The report found that households of color are more than twice as likely as white households to be asset poor--44 percent compared with 20 percent, respectively. A similarly high proportion (65 percent) of households of color is liquid-asset poor compared with 34 percent of white households.
The Scorecard also found sizable differences between states, with asset poverty rates ranging from a high of more than 45 percent in Nevada to a low of 15.7 percent in Vermont; liquid asset poverty rates ranged from 64.5 percent in Alabama down to 22.8 percent in Hawaii.
Typically, states with programs and policies in place to address growing need were in far better shape than those with a less robust safety net. For instance, Nevada's policies to support financial security and opportunity are among the weakest in the country, while Vermont has a long history of supporting such efforts. The Scorecardpresents data on the array of state policies that help families move along a path from financial insecurity to economic opportunity.
The Scorecard also assessed a variety of measures that affect people's ability to save and build assets, including job quality, homeownership, access to credit and education. Among the key findings:
- More than half of consumers (56 percent) have subprime credit scores.
- Between the third quarters of 2008 and 2011, the home foreclosure rate increased by 50 percent, widening the already-considerable homeownership gap between white households and households of color. As of 2010, 73 percent of white households owned homes, compared with just 47 percent of households of color.
- One in five jobs is low-wage and nearly half of employers do not offer health insurance. In addition, 55 percent of workers do not have or participate in retirement plans.
- CFED is the leading source for data on household financial security and policy solutions. We empower individuals and families to build and preserve assets by advancing policies and economic strategies that allow them to pursue higher education, buy a home, start a business and save for the future. CFED identifies good ideas and helps bring them to fruition. We develop partnerships that promote lasting change. And we bring together community practice, public policy and private markets to achieve the greatest economic impact. Established in 1979 as the Corporation for Enterprise Development, CFED works nationally and internationally through its offices in Washington, DC; Durham, North Carolina; and San Francisco, California.
While the number of people getting four year college degrees is up slightly, the average debt for graduating college seniors has risen 19 percent since 2007 to $25,250.
To read an analysis of key findings from the Assets & Opportunity Scorecard click here. To access the complete Scorecard visit http://scorecard.cfed.org.