Nearly half of U.S. households (43 percent) have almost no savings and 27 percent are "asset poor," with neither savings nor other assets to cover basic expenses for three months if they were to lose their incomes, the Corporation for Enterprise Development's 2012 Assets & Opportunity Scorecard finds.
According to a report (12 pages, PDF) based on the scorecard's key findings, the number of asset-poor families in the United States has increased by 21 percent since 2010 and is nearly twice as high as the official income poverty rate of 15.1 percent. A new measure for "liquid asset poverty" — which excludes assets that are not easy to convert to cash such as homes, businesses, and cars — found that 43 percent of households have little or no savings to fall back on in an emergency. Households of color were more than twice as likely as white households to be asset poor (44 percent vs. 20 percent) and to be liquid-asset poor (65 percent vs. 34 percent).
Funded by the Ford, Northwest Area, Mott, Levi Strauss, Surdna, and Y&H Soda foundations; Living Cities; and the U.S. Department of Health and Human Services, the scorecard is based on a hundred outcome and policy measures in the areas of financial assets and income, businesses and jobs, housing and homeownership, health care, and education. Each state and the District of Columbia were ranked by how residents fared and how effectively policies helped them achieve financial security. Nevada, which ranked fiftieth overall and where more than 45 percent of residents are asset poor, the highest rate in the country, provided little support for programs designed to boost financial security. The report also found that liquid asset poverty rates ranged from 64.5 percent in forty-ninth-ranked Alabama to 22.8 percent in fourth-ranked Hawaii.
"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 CFED president Andrea Levere. "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 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."