Quarter of CT households ‘asset poor’
Hartford Business Journal Online
Jan 31, 2012
HARTFORD, CT -- One in four Connecticut households lacks a financial safety net to catch them if they suddenly lose a job or an emergency arises, a report from an economic nonprofit says.
Twenty-five percent of the state's households are "asset poor," according to the Corporation for Enterprise Development (CFED) in Washington D.C.
The 2012 Assets & Opportunity Scorecard ranked Connecticut 26th in the country overall for how residents fare in terms of achieving financial security across 52 measures in five different issue areas.
Though many Connecticut's residents have jobs, they lack adequate savings or other assets to cover expenses for three months if they lose a steady income, CFED says.
Asset poverty, the Scorecard's signature measure, is a conservative estimate of financial security since it counts all assets, including those-such as a home-that would need to be liquidated to be used for day-to-day needs. A more realistic measure of the resources available to families is "liquid asset poverty," which excludes assets such as a home or car that are not easily converted to cash. Excluding these assets, the liquid asset poverty rate increases to 35.2% of Connecticut residents.
Connecticut earns a "B" in Financial Assets & Income, with a low income poverty rate (ranking 5th) and low number of consumers with subprime credit (ranking 8th).
However, the state does rank second-to-last in average credit card debt. When it comes to Businesses & Jobs, the state does well in low-wage jobs (7th).
While Connecticut does appear to do well in average annual pay (3rd), this ranking does not factor in the wide income disparity experienced in the state. Connecticut does poorly in business ownership by gender (50th), ownership by race (43rd) and business creation rate (50th).
The Scorecard indicates that people of color struggle to get ahead in Connecticut, with the state ranking 48th in homeownership by race, 49th in uninsured by race and 41st in four-year degree by race.