In Oklahoma, more than one in four households are “asset poor,” meaning they have little or no financial cushion to rely on if unemployment or another emergency leads to a loss of income, according to a report released today by the Corporation for Enterprise Development (CFED).  Asset poverty is distinct from and broader than income poverty, which measures the amount of money a household receives during the year.  According to the U.S. Census, about one in six Oklahomans were income poor in 2010.  Andrea Levere, president of CFED, highlights asset poverty as a significant barrier to long-term financial stability:

Growing numbers of Americans have almost no savings or other assets to fall back on if they lose their jobs or face a medical crisis.  Without those savings, few will be able to invest in a more economically secure future, including buying a home, saving for their children’s college educations or building a retirement nest egg.

The 2012 Assets & Opportunity Scorecard offers a comprehensive look at Oklahomans’ ability to build wealth, fend off poverty, and create a more prosperous future. The Scorecard compares states along 52 different measures of how residents fare in five issue areas: Financial Assets & Income, Businesses & Jobs, Housing & Homeownership, Health Care and Education. Read the rest of this entry »

OK Policy is an active member of Oklahoma Assets, a statewide coalition that aims to identify and strengthen programs and policies that help Oklahoma residents achieve economic security.  Oklahoma Assets has been making big strides in recent months, officially incorporating as a 501(c)(3) organization.  Steering committee members met in Oklahoma City in May to approve bylaws and vote in a board of directors.  The coalition has also been busy hosting three webinars on asset-building strategies: the importance of savings, financial education in public schools, and Individual Development Accounts (IDAs).

In 2009, we blogged about a series of regional meetings hosted throughout the state by Oklahoma Assets (formerly OkABC) on asset-building strategies for increasing the financial security of Oklahomans.  Click here for a recap of the Oklahoma Assets day-long meeting in April 2009 on “Economic Security for Oklahomans: Asset Building Approaches for Assisting Families with Low Incomes,” where results of the regional meetings were shared and discussed. Read the rest of this entry »

A few weeks ago I had the opportunity to attend a conference hosted by the Ford Foundation and Howard University’s Center on Race and Wealth.  The three-day meeting was the first annual gathering of a diverse group of representatives supported by grants from the Ford Foundation’s Building Economic Security Over a Lifetime initiative.  The initiative promotes programs that help low-income families achieve and maintain economic stability throughout their lives.  The conference focused on a particular and troubling aspect of economic achievement in the United States:  the racial wealth gap.

Few ideas are more evocative of the American dream than wealth and economic security, yet opportunities to accumulate wealth and secure income have never been equally distributed.  In virtually every measure of wealth, non-white households are falling behind.  For example, homeownership, the primary vehicle for building wealth for most Americans, is more attainable for white households than their minority counterparts.  According to the U.S. Census, in 2008 only 47.5% of African-Americans and 48.9% of Hispanics owned their own homes, compared with 74.9% of whites.   White households continue to accumulate more savings, more assets (vehicles, houses, businesses), and more wealth, consistently maintaining larger net worths than minority households.  While some of this gap is attributable to higher incomes and educational attainment, it takes a longer view of history to understand and explain its persistence.  Historically, some of the largest expansions of American wealth were achieved through sacrifices disproportionately shouldered by the poor, the disenfranchised, and communities of color. Read the rest of this entry »

For many of us, the economic events of the past two years have eroded our savings and heightened our sense of economic fragility. Yet for many low- and moderate-income households, savings have long been out of reach. The 2009-10 Assets and Opportunity Scorecard, which OK Policy released in partnership with CFED, revealed that in 2006, more than one in five Oklahoma households was in “asset poverty”, meaning that it had insufficient net worth to subsist at the federal poverty level for three months if income were interrupted, such as due to a job loss. Without savings, any minor setback can turn into a full-fledged crisis. More importantly, perhaps, without access to savings to attend college, buy a home, start a business, or retire, the pathway out of poverty and towards economic security is blocked.

It is for this reason that an important and growing movement of anti-poverty advocates have focused in recent years on ways to support savings among low and moderate-income families. As we discussed in our issue brief, “More than Just Getting By, ” public policies in this country have long encouraged savings, ownership and wealth creation through such mechanisms as the home mortgage deduction and preferential tax treatment of capital gains and college 529 plan contributions. The problem is that most low-income households are not in a position to benefit from the asset building policies embedded in the tax code. As a result, one study found that 45 percent of the benefits from federal asset development policies went to the richest 1 percent of households, while less than 3 percent of the benefits went to the bottom 60 percent of households. Read the rest of this entry »

As the economic downturn continues to take its toll in Oklahoma and across the nation, how financially prepared are families to deal with extended periods of unemployment and underemployment. Newly-released data (PDF) from CFED that focuses on “asset poverty” confirms that many Oklahomans have little or no financial cushion on which to fall back.

Asset poverty is a measure that establishes a minimum threshold of wealth needed for household security:

A household is asset poor if it has insufficient net worth to support itself at the federal poverty for three months in the absence of income. Asset poor households would not have enough savings or wealth to provide for basic needs during a sudden job loss or a medical emergency. Read the rest of this entry »

It is widely known that minorities in the United States earn considerably less than Whites – according to the most recent Census Bureau data, the median income for a White household in 2008 was 34.5 percent greater than for a Black household and 28 percent higher than for a Hispanic household. Poverty rates for Blacks and Hispanics are also more than double than for Whites.

What is less frequently noted is that the racial wealth gap in America is even greater than the income gap. The 2009-10 Assets and Opportunity Scorecard that was recently released by CFED reports that for the nation as a whole,  the median White household possesses net worth (the sum of all assets less liabilities) six times greater than the median minority household: $122,505 compared to $20,132. In Oklahoma, the racial wealth gap was found to be even larger: the median white household enjoys net worth of $66,468 compared to just $6,620 for the median minority household, a gap of  10:1. Additionally, the report found that 37.2 percent of minority households nationally and 43.7 percent in Oklahoma live in “asset poverty”, meaning that they lacked sufficient net worth to subsist at the poverty level for three months in the absence of income. (By comparison, 16.4 percent of White households nationally and 15.9  in Oklahoma were determined to be “asset poor”). Read the rest of this entry »

Monday we participated, along with other members of the Oklahoma Asset Building Coalition, in the release of the 2009-10 Assets and Opportunity Scorecard, a major  report that looks at wealth, poverty, and the financial security of families in all 50 states.  The Scorecard provides data on how each state is doing on a cluster of measures in five issue areas: financial assets and income; businesses and job; housing and homeownership; health care, and education. The report also evaluates states on their success in adopting policies in each of these areas that strengthen asset development and financial security.  The Scorecard website is a treasure trove of data comparing all 50 states and offering detailed discussion of state policies; if you’re primarily interested in Oklahoma’s outcomes and policy rankings, click here. The Scorecard has also received a lot of press coverage, including articles in the Oklahoman and the Journal Record. Read the rest of this entry »