Prosperity Now (formerly CFED) released its 2017 Scorecard on financial well-being, On Track or Left Behind: Findings from the 2017 Prosperity Now Scorecard. While unemployment declined in 2016 to 4.9% and the poverty rate declined to 13.8%, long-term financial security remains out of reach for many households. One in four jobs in the U.S. is in a low-wage occupation in which the median wage pays less than the poverty threshold for a family of four, meaning wages do not to cover basic needs. In addition, one in five U.S. households have significant income volatility from month to month. Forty-three percent of adults with income volatility attribute it to irregular work schedules and 16% to periods of unemployment.
Low incomes and income volatility result in limited savings for many American households. Forty-four percent of households did not save anything for emergencies in the past year. Nearly 37% of households live in “liquid asset poverty,” meaning they do not have sufficient savings to replace their income at the poverty level for three months if they lose work. The lack of savings is most severe for the lowest income households and racial and ethnic minorities. Seventy-two percent of the poorest 20% of households live in “liquid asset poverty.” Sixty-one percent of Hispanic households and 57% of African-American households live in “liquid asset poverty,” compared to 28% of white households.
Homeownership remains difficult to attain for many households. The homeownership rate of 63% remained flat from 2015. Renter households are not transitioning to ownership, which is partly due to increasing home prices. Between 2015 and 2016, the median home value increased by 7.3%, but median income increased by only 3.9%.
The report also highlights racial and ethnic inequalities. Median net worth is $127,200 for white households and $109,120 for Asian households, but only $12,550 for Hispanic households and $9,250 for black households. Part of this wealth inequality is related to homeownership. Seventy-one percent of white households are homeowners, compared to 58% of Asian households, 45% of Hispanic households, and 41% of black households.
The 2017 Prosperity Now Scorecard includes data for states, counties, and selected cities, as well as policy recommendations. It is available at: http://scorecard.prosperitynow.org/