Whose Bad Choices? How Policy Precludes Prosperity and What We Can Do About It February 6, 2018
Today’s Speakers Kristin Lawton Kasey Wiedrich Director of Director of Applied Communications Research @krislawt Andrea Levere Jeremie Greer President Vice President of Policy & Research @ALevere Solana Rice Director of State & Local Policy @SolanaRice
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Prosperity Now Scorecard Andrea Levere President @ALevere
The Prosperity Now mission is to ensure everyone in our country has a clear path to financial stability, wealth and prosperity.
53 Policy Measures 62 Outcome Measures 21 Disaggregated by Race 14 for People with Disabilities
is a comprehensive resource featuring data on family financial health and policy recommendations to help put all U.S. households on a path to prosperity. CFED CFED launches the CFED begins Prosperity Now publishes the Assets & publishing the launches the State Asset Opportunity Scorecard Prosperity Now Development Scorecard annually Scorecard Report Card July 2017 2005 2012 2002 Prosperity Now publishes the 2018 Scorecard 2005 2015 2000 2010
2018 Scorecard Report ▪ Poor choices are fueled by state and federal policy barriers ▪ Economic trends mask the realities of many ▪ Our times demand a bold response
A conversation Solana Rice Director of State & Local Policy @SolanaRice Kasey Wiedrich Director of Applied Research
“I think not having the estate tax recognizes the people that are investing, as opposed to those that are just spending every darn penny they have, whether it’s on booze or women or movies .” Sen. Chuck Grassley (R-IA)
“Americans have choices. And they’ve got to make a choice. So maybe, rather than getting that new iPhone that they just love and they want to go spend hundreds of dollars on, maybe they should invest that in health care. They’ve got to make those decisions themselves .” Rep. Jason Chaffetz (R-UT)
People Don’t Save Because They Don’t Want To People are Poor Because They Don’t Have a Job It’s Easy to Use Credit Correctly and Pay Off Debt Those With Poor Health Should Simply Take Better Care of Themselves
People Don’t Save Because Let People Save They Don’t Want To People are Poor Because Having Work That They Don’t Have a Job Doesn’t Pay It’s Easy to Use Credit Borrowing to Get By Correctly and Pay Off Debt Those With Poor Health High Cost of Poor Health Should Simply Take Better Care of Themselves
Having Work that Doesn’t Pay 18.0% 16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Unemployment Underemployment
Having Work that Doesn’t Pay 18.0% 16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Unemployment Underemployment
Jobs Don’t Cover Cost of Living
States with 1 in 3 or more Low-Wage Jobs ME WA VT ND MT NH NY MN MA OR WI MI RI ID SD PA WY CT IA OH NJ NE IN NV IL VA WV DE UT KY CA CO MD MO KS NC DC TN SC OK AR AZ NM GA AL MS LA TX FL AK HI
Income Volatility 40% of those experiencing volatility struggled to pay their bills at least once because of the ups and downs in their incomes. - Federal Reserve Board, Survey of Household Economic Decisionmaking
Wealth Isn’t Evenly Distributed White Households have roughly the same wealth as households of color earning 3X as much income
Child and Child First-Time Homebuyer Individual Paid Leave Unemployed Care Tax Credits Assistance Development Entrepreneur Support (CDCTC) SNAP Accounts (IDAs) Workforce Payday Lending Prize-Linked Debt Collection Development Protections Savings Refundable Protections Tax Prep Unemployment Comp. Housing Trust CDCTC Regulations Using Prepaid Cards Funds Foreclosure Regulations LIHEAP Earned Income Car-Title Lending Tax Credit (EITC) 53 Policies Protections Unemployment Medicaid Expansion Benefits High-Cost Installment In-State Tuition for Resident Ownership, Titling Microbusiness Loan Protection Undocumented and Zoning of Manufactured Support Students Post-Foreclosure Tenant Homes Retirement Security Property Tax Protections Protections from Temporary Aid for Relief Head Start Foreclosure Financial Education Needy Families State Funding Universal Pre-Kindergarten Full-Day in Schools (TANF) Kindergarten Minimum Wage Redeveloping Postsecondary Financial Aid for Children’s Savings Foreclosed Education Funding Postsecondary Properties Accounts (CSAs) Education Protection from Tax Fairness Limitations on Hospital Discrimination for Charges, Billing and Low-Income Renters Collections
Having Work that Doesn’t Pay State pre-emption of cities’ 16 states and DC minimum wage laws remains an have a minimum issue in 25 states including most recently Iowa and Ohio wage that will be at least IA OH $15 an hour by 2023
11 states and D.C. require employers to offer paid medical, family or sick leave ME WA VT ND MT NH NY MN MA OR WI MI RI ID SD PA WY CT IA OH NJ NE IN NV IL VA WV DE UT KY CA CO MD MO KS NC DC TN SC OK AR AZ NM GA AL MS LA TX FL AK HI
29 states and D.C. Boosting Income with EITC ME WA VT ND MT NH NY MN MA OR WI MI RI ID SD PA WY CT IA OH NJ NE IN NV IL VA WV DE UT KY CA CO MD MO KS NC DC TN SC OK AR AZ NM GA AL MS LA TX FL AK HI State EITC
Boosting Income with EITC ME WA VT ND MT NH NY MN MA OR WI MI RI ID SD PA WY CT IA OH NJ NE IN NV IL VA WV DE UT KY CA CO MD MO KS NC DC TN SC OK AR AZ NM GA AL MS LA TX FL AK HI Refundable at 15% State EITC
People Will Save if We Let Them
Measures of Savings SAVINGS BEHAVIOR Have Households Saved for Emergencies or Unexpected Expenses in the Past Year? SAVINGS BALANCES Do Households Have Enough Savings to Replace Income at the Poverty Level for Three Months?
Inability to Save
Few Have Savings Cushion
Liquid Asset Poverty by Income & Disability Status 36.8% OVERALL RATE HOUSEHOLDS EARNING 71.9% BELOW $20,268 HOUSEHOLDS WITH 50.3% ADULT WITH A DISABILITY
Liquid Asset Poverty by Race and Ethnicity
Tax Benefits of the Tax Cuts and Jobs Act
Cuts to Assets For Independence that supported $57 million of asset purchases
77% of low-wage workers lack access to an employer-provided retirement plan
5 states are establishing an auto-enrollment retirement account program ME WA VT ND MT NH NY MN MA OR WI MI RI ID SD PA WY CT IA OH NJ NE IN NV IL VA WV DE UT KY CA CO MD MO KS NC DC TN SC OK AR AZ NM GA AL MS LA TX FL AK HI
Asset Limits are savings penalties for those that would otherwise qualify for public benefits
8 states eliminated asset limits for TANF ME WA VT ND MT NH NY MN MA OR WI MI RI ID SD PA WY CT IA OH NJ NE IN NV IL VA WV DE UT KY CA CO MD MO KS NC DC TN SC OK AR AZ NM GA AL MS LA TX FL AK HI
Credit and Debt are Powerful Tools that are Critical to Nearly Every Household’s Financial Stability
Percent of Borrowers with Type of Debt
States with the Highest and Lowest Median Debt ME $18,898 WA VT $37,325 ND MT NH NY $34,476 MN MA OR WI MI RI ID SD $22,711 $36,970 PA $1,000 in median debt is WY CT $23,364 IA OH NJ NE IN $39,508 NV correlated to a 3.21% higher IL VA WV DE UT $33,932 KY CA CO MD MO KS NC homeownership rate and DC TN SC $21,884 $595 in median net worth OK AR AZ NM GA AL MS LA TX FL AK $22,765 HI Highest Lowest
Access to Credit to Take on Debt A single percentage-point increase is correlated with a $5,226 increase in median debt.
Access to Credit to Take on Debt A single percentage-point increase is correlated with a $5,226 increase in median debt.
of borrowers 14.7% are severely delinquent
1 in 4 borrowers has an account in collections
TX SC LA MS GA AL 1 in 3 or more borrowers has an account in collections
We have to help make debt safe and affordable for all families
States that Prohibit or Restrict Payday Lending ME WA VT ND MT NH NY MN MA OR WI MI RI ID SD PA WY CT IA OH NJ NE IN NV IL VA WV DE UT KY CA CO MD MO KS NC DC TN SC OK AR AZ NM GA AL MS LA TX FL AK HI Prohibited Restricted
Median Student Loan Debt Has Increased 21% Since 2010
Severely Delinquent Borrowers
Having a College Education is Not Enough to Guarantee Many Black and Latino Families Middle-Class Wealth
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