A new report from the Corporation for Enterprise Development (CFED) found that 38.3% of Illinois households are locked into a “new normal” of perpetual financial insecurity, unable to build the savings needed to last even three months in the event of an emergency. The research, reflected in CFED’s 2016 Assets & Opportunity Scorecard, also found that state policies are doing little to improve Illinoisans’ financial security.
The situation is most dire for households of color. Africanâ€American and Latino households in Illinois are significantly more likely to live below the federal poverty line compared to white households. Even more startling, new data show that businesses owned by whites in Illinois are valued almost ten times higher than businesses owned by Africanâ€American residents.
Published annually, the Assets & Opportunity Scorecard offers the most comprehensive look available 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.
The Scorecard also evaluates 69 different policy measures to determine how well states are addressing the challenges facing their residents. While Illinois has adopted many policies to alleviate the pressures facing lowâ€ and moderateâ€income families, many challenges and opportunities remain for which the state should make policy improvements.
“Illinois policymakers need to address the drivers of the racial wealth gap in Illinois,” said Lucy Mullany Senior Project Manager for Financial Empowerment Policy at the Heartland Alliance and Coordinator of IABG, an Assets & Opportunity Network lead organization. “We need policies that remove barriers to shortâ€term and longâ€term savings and stop the stripping of wealth by predatory lenders in communities of color.”
Across the nation, the Scorecard found scant evidence that federal and state governments were willing to embrace policies that would open new doors to greater financial security for those struggling the most in the American economy. Without such commitments, most lowâ€income individualsâ€”particularly people of colorâ€”find themselves falling farther behind.
Among the key findings from this year’s Scorecard:
- 38% of Illinois households live in liquid asset poverty. Liquid asset poverty is a measure of the liquid savings households hold to cover basic expenses for three months if they experienced a sudden job loss, a medical emergency or another financial crisis leading to a loss of stable income.
- 16.3% of Illinois households have no wealth or negative wealth.
- 22% of Illinois households are unbanked or underbanked.
- 24% of jobs in Illinois are low-wage jobs.