WASHINGTON — Arizona earned a D in a national report Wednesday that graded states on their families’ financial security in five broad categories.
The report by the Corporation for Enterprise Development said 45 percent of families in Arizona were “liquid-asset poor” — meaning low savings left them vulnerable to a financial shock like the loss of a job.
It was just one element in the financial asset and income measure in the report, which also looked at education, jobs, health care and home ownership. This is the sixth report, which first came out in 2002.
Being liquid-asset poor “is not a problem that is limited for just a small segment of the poorest Americans,” said Jennifer Brooks, director of state and local policy for Corporation for Enterprise Development. “This reaches into the middle class.”
In Arizona, Brooks said, 25 percent of people making between $52,000 and $87,000 in Arizona don’t have three months of savings, as the recession has forced people to dip into their bank accounts.
The average Arizonan also has $12,038 in credit card debt, $1,300 more than the national rate, according to the report.
“That has consequences not just for what can you do today to make ends meet and to save for emergencies, but also about opportunities to build long-term assets,” Brooks said.
Another factor counting against Arizona is the relatively high number of “unbanked” households, or those that do not have a savings or checking account. Arizona’s rate of 11.6 percent was the fourth-highest in the nation.
Andrea Whitsett, project manager for Arizona Indicators in the Morrison Institute for Public Policy, said many elements in the report were not surprising. But the high credit card debt and unbanked rates were both interesting, since they touched what “we would think of as higher-earning families.”
“It’s pretty scary to think that, for even some of our, quote-unquote, more-secure families, employed families, that if suddenly they have a health crisis, they have job loss, that they’re suddenly in dire straits,” Whitsett said.
Cynthia Zwick, executive director of the Arizona Community Action Association, said Wednesday’s report just reaffirmed the problems Arizona has had for several years.
“Unfortunately it’s exactly what I expected,” Zwick said. “That doesn’t mean I’m not disappointed.”
For the liquid-asset poor in Arizona, Zwick said security is essential. Not having cash available in case of an emergency can throw families into a financial tailspin.
“Even a small amount of money in savings is important for a family that doesn’t make much,” Zwick said.
She said two of the biggest problems in Arizona are education – not all kids in the state get schooling that prepares them for college – and fair full-time employment that can sustain a family.
Education was just one of the areas where Arizona did poorly: The state ranked 48th for the percentage of bachelor’s degrees among non-whites, and last for student-loan defaults.
The state’s overall worst category was in health care where it ranked 45th, dragged down by a high average employee premiums and a high percentage of uninsured low-income children – both 49th nationally. Arizona ranked 39th for the percentage of people without health insurance.
Arizona’s highest grade came for housing and homeownership, where it got a B. That grade was boosted by top-12 rankings for the number of non-white homeowners, the low percentage of high-cost mortgages, low-income homeowners and the number of one-parent homes.
In addition to measuring states’ woes, the report also calls for policy changes it says will help give families a safety net.
The report gave Arizona credit for instituting a direct-lending program last year for first-time homebuyers.
“Policy sets the rules of the game,” Brooks said. “It encourages certain behaviors like homeownership and discourages others like asset limits.”
But, she said there were still a lot of areas where the state could help, including encouraging savings and providing tax credits so people can hang on to more money.
valleynative posted at 8:34 am on Mon, Feb 4, 2013.
To a large extent, the "disappearance of the middle class" is simply the bursting of the credit card debt bubble that was allowing those people to pass as middle class by spending much more than they earned.
If you've got $12,000 in credit card debt, you seriously need to consider trying to spend LESS than you bring in, rather than more.
I don't want to have my taxes raised to support you when your bubble bursts.
Katydid52 posted at 8:58 am on Mon, Feb 4, 2013.
"She said two of the biggest problems in Arizona are education – not all kids in the state get schooling that prepares them for college – and fair full-time employment that can sustain a family."
To blame the school is easy. If you spend any time in schools you know there are kids who will never go to college no matter what the school does. That's just logical. There has never been a time "everyone" went to college.
There should be more widespread programs available for students who could not succeed in college, like EVIT, only available to every student in every district.
You cannot force young people to care about their future. We should all try, but due to a number of reasons, some teens just won't work hard.
What is "fair" full time employment? $30 for unskilled labor? I read an article once about a young man who was frustrated he could not provide for his family making $10 an hour. He was 25, had a wife and 3 kids, and his wife didn't work. Well, that's pretty stupid. Am I expected to support his family when I chose to be responsible, got training for a job, and didn't have a child until I was 30?
valleynative posted at 9:33 am on Mon, Feb 4, 2013.
I expected some mention of the number of households in which the adults don't speak English or have valid social security numbers.
ralpho posted at 10:34 am on Mon, Feb 4, 2013.
Now see how secure the rich have in meaning how hard is it fro them to lose oh thats right they never do. That my friends is just how republicanism works.
And there is no other way to peel this potato.
Leon Ceniceros posted at 2:18 pm on Mon, Feb 4, 2013.
11.6% Un-banked households = 400,000 Illegal Aliens Criminals who came across the US Border with 40lb backpacks full of Marijuana, Cocaine, Meth, Heroin and Opium.
We can thank President Obama and the Democrats for that. A few of our Major Church Groups too.
valleynative posted at 4:16 pm on Mon, Feb 4, 2013.
ralpho, I have no idea what you're trying to say. Maybe if you had paid attention in school well enough to know how to punctuate a sentence, you would be wealthy, yourself.
chuckles3 posted at 4:00 pm on Tue, Feb 5, 2013.
$12k in credit card debt. Reduce spending, pay this off first. Just like the example the government set.
Light-a-Shuck posted at 9:30 pm on Tue, Feb 5, 2013.
Education cuts are the norm in AZ. Funding has been cut K-16 for years. At one time education funding was 52% of the state budget now it is 44%. Cuts have consequences. Just check out the tuition at our state universities. Since 2001 tuition has gone up from $1,000/year to $10,000/year today. The Middle-class is being squeezed big time. Those coming out of college with large debt may feel they were sold a bill of goods and a triple whammy: a college degree, no job and debt. I guess it could be worse. They could move back in with mom. Better yet, Rep. John Kavanagh can explain to them all about the benefits of "less is more" in public education.
valleynative posted at 11:06 am on Wed, Feb 6, 2013.
If you look at the report, it gives us a "D" in financial security, but shows us as average for education.
smegma posted at 9:46 pm on Wed, Feb 6, 2013.
Don't see what the problem is here. Families are just doing what the federal government is doing.