Scorecard Offers Options for Improving Economic Opportunity
A national group recently issued the 2015 Assets & Opportunity Scorecard, which provides a trove of comparative data on household financial security and policy solutions. It’s a very important resource – coming at a time when new data show that income disparities in Wisconsin have reached record levels, and as a broader range of politicians have begun to offer plans for fighting poverty (see for example the plan recently offered by Senator Darling and Rep. Kooyenga).
The scorecard was prepared by the Corporation for Enterprise Development (CFED), a nonprofit organization based in Washington DC that works to expand economic opportunities for low-income families and communities. They have scored and ranked states on the basis of a wide range of outcome measures, and a second ranking compares states on the basis of how well they are doing in adopting an array of policy solutions that have been shown to increase opportunity for low-income households.
Andrea Levere, president of CFED, sums up the challenges faced by a huge segment of Americans who are mired in poverty and have been left behind by the gradual economic expansion:
“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. 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.”
Some of the noteworthy findings in the scorecard include the following:
- From 2012 to 2013, low-wage jobs increased in all but two states, and average annual pay fell in 36 states.
- In Wisconsin and 33 other states, the gap in home ownership rates between households of color and white households has widened. In fact, Wisconsin has the 5th highest home ownership disparity between white households and minorities, and the 4th highest racial gap in asset poverty (among 25 states with large enough minority populations to reliably measure that disparity).
- 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.
- 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.
- Despite the wide racial disparities in our state, Wisconsin ranked 15th overall in the outcome measures and 22nd in the scorecard of policy measures for improving economic opportunity.
As Wisconsin lawmakers develop and debate proposals intended to help people climb out of poverty, the CFED scorecard is a timely resource for identifying evidence-based policies that Wisconsin could adopt to improve economic opportunity. The full report can be found at assetsandopportunity.org/scorecard.