From Prosperity Now (https://prosperitynow.org/):
As a result of America’s recent government shutdown, a glaring issue has become more apparent than ever in our economy. When federal workers began to miss paychecks, some had to turn to food banks and charitable donations to make ends meet. When a family is struggling to make ends meet or thrown into a financial crisis due to one sudden unexpected emergency, it means they are financially vulnerable. This financial vulnerability is a harsh reality for not just federal workers, but millions of other Americans. The 2019 Prosperity Now scorecard statistically analyzes this everyday economic uncertainty that Americans face and ranks states based on five key issues, those issues are financial assets, housing, jobs, healthcare, and education. State ranks are based on how financially vulnerable their populations are (described as outcome measures) as well as racial disparities in each of the five topics. Racial inequality is still an issue that needs to be addressed in our country, and the scorecard factors in disparities minorities face with statistical research in order to be a voice for change.
The racial disparity ranks in the scorecard shows a significant racial wealth divide in this country. In 2018, the median wealth net worth for white households was $127,390. Comparatively, Black households had a median wealth net worth of $8,050 while Latino households had $16,610. This means that for every dollar owned by white households, Black households only own six cents and Latino households own 13 cents. This racial gap is also present in median income earned. For every dollar of White household income, Black households earn 61 cents and Latino households earn 76 cents. These minority households are routinely starting life farther behind as well. 30% of Black households and 21.9% of Latino households either had zero wealth or owed more money than they had available compared to 13.4% of White households. The financial inequality that minorities face in this country has become a hindrance to our country’s overall prosperity, and affects housing, health, education, and more.
Home ownership is a key building block for wealth in our country. The racial wealth gap is in part being fueled by homeownership rates. Although 63.9% of Americans own their houses, minorities are continually owning homes at lower percentages. 71.9% of White households are homeowners, compared to 41.4% of Black households and 47.2% of Latino households, among others. A main indicator for why homeownership is difficult to obtain can be found in median home value. The ideal rule for median home prices in America is that the value of your home should be 3 times higher than your income. The scorecard reports however that median home values in America are 3.6 times higher than median household incomes. With higher median home values, more people are susceptible to falling behind on payments, especially minorities who already earn less on average. Home renters are also dealing with adversity when it comes to stable housing. 49.5% of renters in America were housing cost-burdened in 2018, meaning they spent more than 30% of their monthly income to pay their rent and utilities. Among those who are housing cost-burdened, over half (54.4%) are minorities. With the high costs of housing, less low-wage Americans can prepare for the future financially, and they fall into financial vulnerability.
Another key finding from the Prosperity Now score card is that almost 40% of Americans are liquid asset poor, meaning they lack basic savings to get by at the poverty level for 3 months ($6,275 for a family of four). Pennsylvania is close to the national average in liquid asset poverty at 36.7%. People that lack these basic savings on average wouldn’t be able to afford 3 months of bills in the case of a financial emergency. Liquid assets are especially difficult to obtain for households of color. 62.7% of black households and 62.5% of Latino households did not have reliable savings in 2018, whereas 31.7% of white households were liquid asset poor. Without reliable basic savings, 13.2% of Americans fell behind on their bills in 2018. Falling behind on bills becomes more relevant with the less you earn. 22.1% of workers that earn less than $30,000 fell behind on their bills in 2018.
When economic outcomes and racial disparities are analyzed, there shows a clear need for change not only in our country as a whole, but in Pennsylvania too, as they ranked 41st overall in the Prosperity Now scorecard. Financial vulnerability is a key issue that millions of Americans face. There are, however, policy suggestions that are highlighted by the scorecard that can help. The scorecard advocates for causes like protection of federal safety net programs, defending anti-discrimination housing laws, call for workplaces to offer emergency savings accounts, removing savings penalties for safety net programs, and more. The 2019 Prosperity scorecard is a bevy of statistical analysis on the financial and racial inequalities in our country. This national and state level data, as well as the policy suggestions noted, needs to be considered when we decide who to vote for in local and national elections. Voting for policy makers at the local, state, and national level who support these policies will be the catalyst to closing the economic and racial gap that currently exists. With time and the right legislators, we can ensure that regular, hard-working Americans are no longer financially vulnerable.
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