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United Way's Study of Financial Hardship​


ALICE, a United Way acronym which stands for Asset Limited, Income Constrained, Employed, represents the growing number of individuals and families who are working, but are unable to afford the basic necessities of housing, food, child care, health care, and transportation.
Through a series of new, standardized measurements, United Way is quantifying the size of the workforce in each state that is struggling financially, and the reasons why. These measurements provide a broader picture of financial insecurity than traditional federal poverty guidelines.  


To see ALICE findings for individual towns in Yakima County visit the website: http://www.unitedwayalice.org/reports.php​ 

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January 25, 2016
New Data Show Millions of Families Face Steep Uphill Climb to Real Financial Security

Seven years since the official end of the Great Recession, many economists agree that America’s agonizingly slow financial recovery is finally complete.  But even though the national unemployment rate has remained steady at five percent in recent months, it seems to many families that the widespread economic prosperity of the past is just that, a thing of the past.

As CFED's (Corporation for Enterprise Development) recently released 2016 Assets & Opportunity Scorecard illustrates, financial vulnerability is the norm. And for those who were just scraping by before the recession, the struggles have only deepened. Across the US, millions of low- and moderate-income people live paycheck to paycheck with no prospect of saving for a more prosperous future.
 
Why are so many households living in such a financially precarious position? Findings from the Scorecard reveal some answers:
· There is a significant affordable rental housing shortage nationally and in many states. As a result, more than half (51.8%) of renters nationally and 50% of Washington renters are cost-burdened, which means they spend more than 30% of their income on housing.
· Outsized spending on housing reduces funds for food, health care, child care and other basic needs. Typically, health care is the first to go; 14.3% of adults say they didn’t see a doctor over the last year because of cost.
· Households just aren't bringing in enough income to cover basic expenses.  One in four jobs in the US today is in a low-wage occupation , and the underemployment rate, the number of unemployed, plus those who have part-time work but seek full-time employment, along with those who have given up because they are discouraged by the job market is still double that of the unemployment rate, at 10.8%.  Scorecard results show 32.5% of Washington residents are liquid asset poor, meaning they don’t have enough money saved to cover basic expenses if they experienced a sudden job loss, medical emergency or another financial crisis leading to a loss of stable income.
 
The fact is that making ends meet on a modest income involves regularly juggling a series of complex choices often –- “robbing Peter to pay Paul” -- just to manage week-to-week finances. As a result, these families have little chance of finding their financial footing.
 
However, as grim as these numbers are, there are numerous tested solutions that can be leveraged to help build an opportunity economy in which everyone has the chance to succeed.  Take the Earned Income Tax Credit (EITC) — the most effective anti-poverty program in the country.  The EITC increases the incomes of hard-working people struggling to cover basic expenses and enables families to start saving for a more secure financial future — and policymakers on both sides of the aisle agree that it works.
 
Published annually, the Assets & Opportunity Scorecard offers a comprehensive look at Americans’ ability to save and build wealth, stay out of poverty and create a more prosperous future. This year’s Scorecard assesses all 50 states and the District of Columbia on 61 outcome measures spanning five issue areas: Financial Assets & Income, Businesses & Jobs, Housing & Homeownership, Health Care and Education. It also ranks the states on 69 policies that promote financial security.  For more about policies that help to build an opportunity economy, and for a full analysis state- and national-level outcome and policy data across 130 different measures, visit http://assetsandopportunity.org/scorecard.


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WABC Statewide Conference

June 2-3, 2015

Yakima Convention Center


 

 

January 25, 2016  -  

New Report Highlights Job Crisis in Washington Despite Bright Spots, More Work Remains to Promote Financial Security for Residents

Despite an improving national economy, new data released today by the Corporation for Enterprise Development (CFED) show many Washington residents are still struggling to gain a foothold in the recovery. CFED’s 2015 Assets & Opportunity Scorecard ranked Washington 44th among all states for average credit card debt, 47th for ownership of job-creating microenterprises and 30th for the high rate of underemployed residents, defined as part-time workers who want full-time jobs and discouraged workers no longer searching for employment. 

These residents need additional support to achieve financial security. “More than 25% of Washingtonians have been left out of the economic recovery, in particular residents in rural areas and those working in service-sector jobs,” said Stephanie Bowman, Executive Director of the Washington Asset Building Coalition (WABC). “We call upon the Governor and legislature to work with us to enact meaningful policies that will result in creating jobs through microenterprise development, and to ensure every child graduates from high school with basic financial education so they have the skills to make sound financial decisions as young adults.” 

Bowman noted that last year’s decision not to provide state funding to the Washington State Enterprise Association will deny low- and moderate-income individuals the chance to start their own businesses and contribute to the state economy. “State legislators should seek funding for this microenterprise program to provide families a pathway to opportunity,” Bowman said.  

CFED’s 2015 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. The Scorecard provides rankings for the 50 states and District of Columbia on both the ability of residents to achieve financial security and policies designed to help them get there. Washington ranks near the top of the country with an outcome ranking of 14 and an overall policy ranking of 2.

The Scorecard evaluates how residents are faring across 67 outcome measures in five different issue areas— Financial Assets & Income, Businesses & Jobs, Housing & Homeownership, Health Care and Education. Washington’s outcome ranking rose from 16th place last year to 14th this year. Although the state’s high credit card debt contributed to its “B” grade in the Financial Assets & Income category, Washington ranks 3 rd in number of households with savings accounts; almost 82% of Washington households have a savings account compared to 69% of American households nationwide. The state did not perform as well in the Housing & Homeownership and Health Care categories, receiving a “C” in both. Homeownership rates (ranked 42nd) continue to be low in Washington, partly because homes are so unaffordable. The median value of a home is 4.3 times higher than the median income, making the state one of the least affordable places to buy (ranked 44th). Disparities in uninsured rates by income and gender contributed to the state’s “C” grade in Health Care; the poorest 20% of income earners are 4.1 times more likely to be uninsured, and women are 1.2 times more likely to be uninsured than men. Despite the state’s poor performance on microenterprise ownership (ranked 47th), the state received an “A” in the Businesses & Jobs category, due in part to having the 3rd -lowest percentage of low-wage jobs in the country. Washington also received an “A” in Education, a reflection of the state’s high math and reading proficiency among eighth graders (ranked 7th and 8th , respectively); 42% of Washington’s eighth graders are proficient in both reading and math, compared to about 36% of eighth graders nationwide. 

The Scorecard also evaluates 68 different policy measures to determine how well states are addressing the challenges facings residents. Although the state ranked 2 nd overall in terms of policies, the state has only implemented about half of the policy options available to the state (35 of 68 policies). Washington is in first and third place for policies in the Businesses & Jobs and Housing & Homeownership categories, respectively. The state is also among the top ten states for Health Care policies (ranked 6th). Although Washington did not perform nearly as well for policies in the Financial Assets & Income and Education categories, the state was still ranked 20th and 13 th in those categories, respectively.

Nationally, the Scorecard data finds millions of Americans have been left out of the economic recovery with little opportunity to take charge of their financial lives or plan for a more secure future. Large percentages of these households are experiencing profound levels of exclusion from the financial mainstream as they struggle in low-wage jobs and are forced to rely on fringe, often high-cost financial services just to make ends meet. Among the key findings: 

  • Low-wage jobs have increased in all but two states. Thirty-six states and Washington, D.C., saw decreases in average annual pay between 2012 and 2013. 
  • Nationally, 56% of consumers have subprime credit scores, meaning they cannot qualify for credit or financing at prime rates and are more likely to use costly alternative financial products. One in five households regularly relies on fringe financial services, such as payday loans, to meet their needs. 
  • Liquid asset poverty rates – the percentage of households with less than three months of savings at the poverty level – are particularly high in states with the greatest levels of income inequality. This trend is most evident in poor states in the South and Southwest and high-cost states on the East and West coasts, all of which have large populations of color. If families can’t save, closing the wealth gap is all but impossible. 
  • In 34 states, the gap in homeownership rates between households of color and white households has widened. The 10 states where the gap is greatest are Rhode Island, New York, Massachusetts, Connecticut, Wisconsin, South Dakota, North Dakota, Minnesota, New Jersey and Kentucky. 
  • High-cost (or subprime) mortgage loans—one of the main culprits behind the housing boom and bust—are on the rise. The percentage of homeowners with high-cost mortgages is higher in 42 states than it was in 2010. 
“The economic recovery experienced by some segments of our society is barely a blip in the lives of millions of Americans who continue to struggle in low-wage jobs and have little ability to save and build a better future for themselves and their children,” said Andrea Levere, president of CFED. “In far too many cases, these households are living outside the financial mainstream, relegated to using often high-cost financial services that trap them in a cycle of debt and financial insecurity.”
 

To access the complete Scorecard, visit http://assetsandopportunity.org/scorecard



 

 

 

 

 

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EITC is One of the Largest Antipoverty Programs

 

During 2016 filing season, over 26 million nationwide received $65.6 billion in EITC for 2015 tax year returns.  436 thousand Washington taxpayers claimed a total of $956 million in EITC averaging approximately $2,190.

Four of five eligible workers claim and get their EITC. We want to raise that number to five out of five. You earned it, "now file, claim it and get it." See if you qualify at www.irs.gov/eitc.

EITC lifted an estimated 6.6 million people out of poverty, including 3.3 million or half of them children

The cost of administering the EITC program ratio to claims paid is less than one percent.

1Source: Report NR. 701-98-11 As of December 31, 2011, Year to Date

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