OKPOLICY.ORG
Conventional wisdom may seem to suggest that the economy has bounced back. Low unemployment and a stable housing market paint the picture of a prosperous Oklahoma. But if you look at the pocketbooks of the average American, the outlook is far from rosy. As CFED’s newly released 2015 Assets & Opportunity Scorecard reveals, the economy may be improving, but how individuals and families are faring in the economy is not.
The Scorecard data confirm what most families have known for a while—that even those squarely in the middle class are living on the brink of financial disaster. In fact, 49.1 percent of Oklahoma households are ‘liquid asset poor’, meaning they lack the resources necessary to subsist at the poverty level in the event that a job loss or medical emergency leaves them without their primary source of income. The high liquid asset poverty rate is perhaps unsurprising given the other patterns we see emerge from the Scorecard data.
Control over day-to-day and month-to-month finances
One reason households struggle to control their day-to-day finances is because even as unemployment rates tick downward wages have remained stagnant. For many Oklahomans, their wages were comparatively low to begin with, as one in three jobs is a low-wage job (30.5 percent). Only five other states have a lower percentage of residents with a savings accounts than Oklahoma, and too many of our residents are having trouble paying their bills.
According to CFED’s 2015 Assets & Opportunity Scorecard, 10.9% of Oklahoma residents are “unbanked” or do not have traditional bank accounts, and more than half do not have a savings account. With no slack in their budgets, these families are more likely to turn to predatory lenders and other services outside the financial mainstream to cover medical and other emergencies, with damaging repercussions to their credit and financial security. The Scorecard ranks Oklahoma among the worst in the nation for consumers with subprime credit (43rd) and borrowers who are 90+ days overdue on loan payments (47th).
Capacity to absorb a financial shock
Not having emergency savings means that liquid asset poor families can’t overcome otherwise minor setbacks such as a broken-down car or a health emergency. Oklahomans have nearly the highest uninsured rate in the country, with 20.4 percent of residents under 65 lacking health insurance, 5th highest among the states. About half of the state’s residents (48.2 percent) are not covered by an employer-based health plan and Oklahoma employers that do offer coverage ask their employees to pay a higher share of their premium (33.2 percent) than in any other state.
Being on track to meet financial goals
Being riddled with debt, lacking strong credit scores or not having a bank account make it so that even middle class families lack the flexibility to invest in assets like a home, a college education, or saving for the future. Oklahomans rank 43rd nationally in retirement plan participation (only 42.7 percent of wage and salary workers invest in a plan) and 44th in bachelor’s degree attainment (just 23.8 percent of residents have a four year college degree).
While these findings reveal that a large share of families are experiencing some kind of exclusion from the financial mainstream, the Scorecard also indicates that the degree of exclusion is much greater for some families than for others. Perhaps unsurprisingly, Black and Hispanic households, younger households and low-income households are much more likely to experience financial exclusion.
However, the Scorecard story isn’t all bad. For instance, home prices in Oklahoma are among the lowest in the country (45th lowest), keeping homeownership affordable for many and our homeownership rate above the national average (65.5 versus 63.5 percent nationally). The state also excels in enrollment in early childhood education (51.6 percent) and in the share of its college students who graduate without loan debt (47 percent, versus just 29 percent nationally).
The Scorecard also provides solutions, by examining policies available to promote financial stability. While Oklahoma has work to do to improve the financial well-being of residents, there are lots of areas where state policymakers could make a meaningful difference. Expanding health coverage would have a significant impact in the lives of working families struggling to keep up with the cost of care. Oklahoma’s refusal to accept billions in federal funds for expanding Medicaid is holding back our hospitals and providers, our health care system, and the thousands of residents who have no other affordable options.
The Scorecard data underscore the need for programs that help Oklahoma residents build savings and assets in the face of low-paying jobs and barriers to health care. Financial institutions also play a critical role in providing families with the tools to save, including offering short-term affordable products to all consumers.
For a full analysis state- and national-level outcome and policy data from CFED, visit http://scorecard.cfed.org.
