Despite an improving national economy and a (deceptively) low statewide average unemployment rate, nearly half (49.1 percent) of Oklahoma households are in a persistent state of financial insecurity, according to a report released today by the Corporation for Enterprise Development (CFED). The percentage of households with little or no savings to cover emergencies or to invest in building a better life has jumped from last year’s 43.8 percent level.
CFED’s 2014 Assets & Opportunity Scorecard defines these financially insecure residents as “liquid asset poor,” which means they lack adequate savings to cover basic expenses at the federal poverty level for even three months in the event of an emergency such as a job loss or health crisis.
Included among Oklahoma’s “liquid asset poor” are a majority of those who live below the official income poverty line of $23,550 for a family of four, as well as many who would consider themselves middle class. Fully 31 percent of households earning $46,585 – $78,804 annually have less than three months of savings.
The report also found that state policies are doing little to improve the financial security of Oklahomans. The Scorecard provides rankings for the 50 states and District of Columbia on both the ability of residents to achieve financial security and, for the first time, policies designed to help them get there. Oklahoma ranks below average for outcomes with ranking of 31st and above average for policies with an overall ranking of 17th.
Andrea Levere, President of CFED, explains the role of policy in preserving asset building opportunities for low and middle income earners:
Nationally, policies at all levels of government helped stem the tide of the recession’s damage to household finances. They protected consumers from foreclosure and abusive financial practices, helped raise wages and connected families to the financial mainstream. Without strong policies that address the challenges facing low- and moderate-income families, wealth and income inequality will continue to grow and our nation’s economy will continue to struggle.
The Scorecard evaluates how residents are faring across 66 outcome measures in five different issue areas— Financial Assets & Income, Businesses & Jobs, Housing & Homeownership, Health Care, and Education. Oklahoma received:
- A “D” in the area of Financial Assets & Income, a reflection of the state’s high level of income poverty and low numbers of households with a savings account (ranked 40th and 45th respectively).
- A “D” in the Health Care category, largely due to our high uninsured rate of 21.2%.
- A “D” in the Education category, mainly reflecting the low math proficiency level in the 8th grade (ranked 45th) and the high student loan default rate (ranked 48th). However, the state does shine in early childhood education enrollment where it is ranked number one in the country.
The state received a “C” in the Businesses & Jobs category, driven in part by a low unemployment rate (ranked 12th). However, when the unemployment rate is compared by race the state ranks 24th; workers of color are almost twice as likely to be unemployed as white workers. The state also ranks 4th for the prevalence of low wage work – jobs in occupations where the median pay is below poverty level.
In terms of policies aimed at decreasing poverty and creating more opportunities for low- and moderate-income families, Oklahoma ranked in the middle. More work remains to be done to empower low- and moderate-income families. Nearly a third of all the state’s jobs pay wages too low for working parents to survive. When working families can’t make ends meet, then they can’t save for the future and they can’t get ahead.
It’s time for Oklahoma to commit to policies that expand access to economic opportunity through investments in adult and secondary education, a development strategy that prioritizes living wage employment and a robust social safety net.
The 2014 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. Five years into the economic recovery, Oklahoma families are still treading water in the deep end. While unemployment, foreclosure rates and credit card debt show a slow but steady decline, the general picture remains one of declining economic mobility and widespread financial instability.