Organization scores N.D. well for financial security
Minot Daily News
Feb 1, 2012
WASHINGTON, D.C. Twenty percent of North Dakota households lack a financial cushion to weather an emergency created by loss of income, according to a report released Tuesday by the nonprofit Corporation for Enterprise Development.
The Washington, D.C., organization's scorecard ranked North Dakota seventh in the nation for how well its residents fare in achieving financial security across 52 measures in five different issue areas. The scorecard showed one in five lacks adequate savings or other assets to cover expenses for three months if they lose income and nearly one in three lacks liquid assets to cover those expenses.
Jesse Tran, financial counselor with The Village Family Service Center, Bismarck, said the favorable showing nationally may have to do with the state's frugal mindset.
"By and large, North Dakotans are a bit more conservative as far as their spending is concerned and as far as trying to save," he said.
However, some state residents struggle financially, particularly the elderly and people with disabilities, he said. The oil-boom economy of western North Dakota puts lower-wage earners and fixed-income residents at a disadvantage, and they make up a good share of people seeking help from The Village.
"As far as saving, the people I see are just in crisis. It's just not an easy thing for them to do, especially with the rise in costs going on," Tran said. "It can be really hard to save if you are feeling the crunch in your budget. The thing is to closely monitor your spending. By tracking your spending, you will be able to be more in control of what you spend and make sure you are making the wisest and most effective choices with your money."
The corporation's Assets & Opportunity Scorecard gave North Dakota an "A" in the category of personal finances and assets, indicating that residents overall have a high degree of economic security. North Dakota received the highest spot for both low numbers of consumers with subprime credit and borrowers 90 days overdue. North Dakota was second among states in low average credit card debt. The debt averaged $6,044, compared to the national average of $10,852.
North Dakota also received an "A" grade in both housing and education. The state's home ownership rate at 67 percent is around the national average, ranking the state 36th. North Dakota came in second in affordability of homes, first in housing cost burden of homeowners and second in housing cost burden for renters, based on 2010 data. The education sector looked at availability of early childhood education, student test scores and percent of population with college education.
The state earned only a "B" for business and jobs after ranking 46th in average annual pay, using employee wages covered by unemployment insurance as the pay base.The state ranked 29th in percent of jobs considered low wage.
The state's poorest showing was in health care, where it ranked 37th and received a "D." Although the state ranked 10th with an 11.3 percent uninsured rate, it ranked low in its coverage for lower-income residents and children. About 68 percent of employers provide insurance benefits, ranking the state fourth nationally in that category.
The Corporation for Enterprise Development suggests that North Dakota can improve its climate for asset building by increasing support to a program that matches savings of low-income residents toward assets such as business start-ups or homes. It also offers solutions such as a state Earned Income Tax Credit similar to the national credit, expansion of Medicaid and children's health services and a focus on affordable housing programs.
Nationally, the organization noted, the scorecard identified precipitous drops in incomes for many Americans and the widening of the wealth gap between the richest and poorest households. Key findings included:
- More than half of consumers have subprime credit scores.
- Between the third quarters of 2008 and 2011, the home foreclosure rate increased by 50 percent.
- One in five jobs is low-wage and nearly half of employers do not offer health insurance.
- More than half of workers do not have or participate in retirement plans.
- While the number of people getting four-year college degrees is up slightly, the average debt for graduating college seniors is $25,250.
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