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Jan 29, 2015

New Data Shows Economic Recovery Bypassing Millions Trapped by Low Wages, Minimal Savings and Poor Credit

"2015 Assets & Opportunity Scorecard" Finds Federal and State Policies Insufficient to Help Families Excluded from Financial Mainstream

Washington, D.C. -- Large percentages of American households are experiencing profound levels of exclusion from the financial mainstream as they struggle in low-wage jobs and are forced to rely on fringe, often high-cost financial services to make ends meet, according to the 2015 Assets & Opportunity Scorecard, released today by the Corporation for Enterprise Development.

Low-wage jobs have increased in all but two states while 36 states plus Washington, D.C., saw decreases in average annual pay, according to the Scorecard. Nationally, nearly 56% of consumers have subprime credit scores, meaning they cannot qualify for credit or financing at prime rates and are more likely to use costly alternative financial products. One in five households regularly relies on fringe financial services, such as payday loans, to meet their needs.

A combination of these and other factors have contributed to the nation's growing wealth and income inequality. Scorecard data show that households in the top quintile currently earn five times as much as those in the bottom quintile ($106,196 compared to $21,159). And households at the top have 55 times as much wealth, including savings and assets, as those at the bottom of the income scale ($277,473 compared to $5,022).

"The economic recovery experienced by some segments of our society is barely a blip in the lives of millions of Americans who continue to struggle in low-wage jobs and have little ability to save and build a better future for themselves and their children," said Andrea Levere, president of CFED. "In far too many cases, these households are living outside the financial mainstream, relegated to using often high-cost financial services that trap them in a cycle of debt and financial insecurity."

Published annually, the Assets & Opportunity Scorecard offers the most comprehensive look available at Americans' ability to save and build wealth, stay out of poverty and create a more prosperous future. This year's Scorecard assesses states on 67 outcome measures spanning five issue areas -- Financial Assets & Income, Businesses & Jobs, Housing & Homeownership, Health Care and Education -- while also ranking states on 68 policies that promote financial security.

Among the Scorecard's other key findings:

  • Liquid asset poverty rates -- the percentage of households with less than three months of savings at the poverty level -- are particularly high in states with the greatest levels of income inequality. This trend is most evident in poor states in the South and Southwest and high-cost states on the East and West coasts, all of which have large populations of color. If families can't save, closing the wealth gap is all but impossible.
  • In 33 states and the District of Columbia, the gap in homeownership rates between households of color and white households has widened. The 10 states where the gap is greatest are Rhode Island, New York, Massachusetts, Connecticut, Wisconsin, South Dakota, North Dakota, Minnesota, New Jersey and Kentucky.
  • High-cost (or subprime) mortgage loans -- one of the main culprits behind the housing boom and bust -- are on the rise. The percentage of homebuyers with high-cost mortgages is higher in 42 states than it was in 2010.

According to CFED's analysis, the vast majority of states are not doing enough to improve the circumstances of struggling residents. Only eight states (Maryland, New Jersey, New York, Oregon, Rhode Island, Washington, Connecticut and Maine) have adopted 50% or more of the 68 policies CFED has identified as supportive of family financial security. Meanwhile, five states (Alabama, Mississippi, Alaska, South Dakota and Wyoming) have adopted fewer than one-quarter of these policies, which range from protections from predatory loans to raising the minimum wage to providing financial education in schools.

Additionally, some states have backpedaled on policies that helped families build long-term financial security following the recession. For instance, homeownership counseling for prospective homebuyers was cut in six states (Indiana, Maine, Michigan, Nebraska, New York and Utah). Five states -- Arizona, Connecticut, Vermont, Virginia and Washington -- cut support for workforce training funding. And downpayment assistance was cut in three states -- Hawaii, Michigan and Utah.

On the positive side, a few trends hold promise for improved financial security for families in several states. At least six states (Ohio, Colorado, Connecticut, Maryland, Minnesota and North Carolina) either increased the percentage of one of their tax credits, such as the Earned Income Tax Credit or Child Tax Credit, or expanded eligibility. And five states (Tennessee, Connecticut, Rhode Island, Maine and Nevada) either launched or expanded Children's Savings Account programs, which provide children with their own matched accounts for college.

"More can and must be done to ensure all Americans benefit from the nation's improving economy. When jobs don't pay enough to consistently cover expenses and when savings aren't enough to cover emergencies or longer-term needs, families have little opportunity to make choices that will enhance their lives," said Jennifer Brooks, director of the Assets & Opportunity Network for CFED. The Network, which works to improve policies and programs that promote financial security and opportunity, is comprised of 86 state and local organizations in 43 states.

To read an analysis of key findings from the 2015 Assets & Opportunity Scorecard, click here. To access the complete Scorecard, visit Additionally, you can visit CFED's media resources page for interactive data tools, including downloadable infographics, customizable charts and maps, and other data visualizations.This year's Scorecard also includes a "liquid asset poverty" calculator, which lets users determine how much savings they need to avoid joining the ranks of the 44% of Americans living in liquid asset poverty -- meaning they have less than three months of savings at the poverty level. Additionally, users can calculate asset poverty rates for individual states and localities.

For more information contact Amy Saltzman (; 301.656.0348; 202.669.8494 (cell)) or Kristin Lawton (; 202.207.0137).

### CFED empowers low- and moderate-income households to build and preserve assets by advancing policies and programs that help them achieve the American Dream, including buying a home, pursuing higher education, starting a business and saving for the future. As a leading source for data about household financial security and policy solutions, CFED understands what families need to succeed. We promote programs on the ground and invest in social enterprises that create pathways to financial security and opportunity for millions of people. 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.

Copyright © 2017 CFED Corporation for Enterprise Development 1200 G Street, NW Suite 400 Washington, DC 20005 202.408.9788

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