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CFED

The 2007-2008 Assets and Opportunity Scorecard Andrea Levere, President Jennifer Brooks, Policy Director Jerome Uher, Communications Director CFED September 12, 2007. CFED.

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  1. The 2007-2008 Assets and Opportunity ScorecardAndrea Levere, PresidentJennifer Brooks, Policy DirectorJerome Uher, Communications DirectorCFEDSeptember 12, 2007

  2. CFED • CFED works to expand economic opportunity by helping more people save and invest, own homes, succeed as entrepreneurs, contribute to and benefit from the economy. • CFED’s special expertise is to connect public policy, private markets, and community practice to bring effective approaches for building wealth and financial security to scale at the local, state and national levels.

  3. Assets and Opportunity Scorecard • Most comprehensive tool measuring ownership and financial security at state level • Provides assessment of how well states support efforts of residents to build and protect their assets • Focus on assets is essential for lower-income Americans to enter the economic mainstream and build wealth

  4. Assets and Opportunity Scorecard Measures how different types of assets combine to promote economic opportunity. Organizes data in 5 categories that define how to build and protect wealth in today’s economy: • Financial security • Business development • Homeownership • Health care • Education Framework underscores need to integrate asset development, asset protection and social insurance to advance financial security for all Americans

  5. New and Improved in 2007-2008 • Presents both quantitative data on 46 performance indicators and qualitative measures on 38 policies for each state and DC • For the 1st time, the Scorecard: • Includes proprietary data on debt • Expands analysis of data by race, gender, income • Highlights 12 core policies with demonstrated effectiveness in asset development & protection

  6. Assets Across America: The National Picture • Good news in net worth since the 2005 Scorecard: • Median household net worth rose 26% to $65,150 • Rose 77% to $48,500 for women; 114% to $11,640 for minorities • Caution: growth driven primarily by increasing home values, which may not be sustainable • Yet, foundation that undergirds asset base is fragile: • 15.5% of all households have zero or negative net worth • 21% of middle-class households are asset poor—meaning they could not survive at the poverty level for 3 months if income interrupted, thus unable to invest in their own futures

  7. Assets Across America: The National Picture (cont.) • Further, substantial economic disparities endure: • For every $1 of net worth in white household, minority household has only13 cents • For every $1 of net worth in male-headed household, women-headed households have only 59 cents

  8. Findings on Financial Security • 15.5% of all households have zero or negative net worth; however, higher rates for female-headed (19%) and minority-headed (26%) households • Wealth also varies by geography: for every $1 of household net worth in MA, households in NM have just 10 cents • Many Americans operate outside financial mainstream: 28% have neither checking nor savings account • Median credit card balance is $1,690 (compared to the median monthly income of $4,017)

  9. Findings on Homeownership • Homeownership—largest component of personal net worth—at an all-time high (69%), but rate varies: • White 72.1%; African American 45.8%; Women 61.2% • Affordability varies enormously by geography: • OK has most affordable homes—median home price slightly more than twice (2.16) median income • CA has least affordable homes—6.33 times median income • Average mortgage debt is $124,000—highest in CA ($247,200); lowest in WV ($62,700) • But foreclosure rate is rising—increasing 30% to 1.28% between Q2/06 and Q1/07, with rates even higher now

  10. Findings on Business Development • Small business and microenterprise ownership—2nd largest component of personal net worth—is up • Small business ownership rose 33% (2003-2005) • Microenterprise ownership rose 10.7% (2001-2004) • 31% increase in Hispanic small business ownership (1997-2002) • No significant change in African-American small business ownership over same period (1997-2002)

  11. Findings on Health Insurance • 63.2% of Americans covered by employer-sponsored insurance, 1% decrease (1.2 million people) from last Scorecard • 36% of low-income parents are uninsured, compared to 16% of parents at all income levels • 18.5% of low-income children are uninsured, a 1.5% decrease from last Scorecard (roughly 211,000 more insured children) • Health care insurance coverage varies by geography: • Low-income children in TX (28.6%) are nearly 4 times as likely to be uninsured as VT children (7.3%) • 54% of low-income parents in TX are uninsured, compared to14% in HI

  12. Findings on Education • 72% lack a college degree—a credential often necessary to earn a living wage • Geographic variation is significant: 37.6% of heads of household in MA hold 4-year college degrees, compared to 17.6% in WV • Degrees vary by race & income: 22.2% of minorities vs. 29.6% of whites; 57% of top vs. 10% of bottom quintile • Only about one third (28%) of 8th grade students are proficient in math • Nearly half (48%) of ND’s children in poverty are enrolled in Head Start; NC enrolls only 13%

  13. Grades Based on ranked outcome measures Distributed on a curve (see right) Policy Ratings Based on Scorecard criteria for strong, effective policy Grade distribution Policy rating Grading

  14. State Grades

  15. State Policy • Policies provide opportunities for families to build assets and safety nets to protect what they’ve got • Scorecard includes 38 policies; highlights detailed information on 12 Core Policies that provide financial security & opportunity • Core Policy selection criteria: • Collectively, reflect all elements of asset building & protection agenda • Ambitious, yet achievable—all have been well-tested on the ground & vetted in state houses • Comparatively, straightforward and easy to understand

  16. 12 Core Policies • Asset Limits in Public Benefit Programs • Curbing Predatory Lending • Expanded Coverage for Medicaid and SCHIP • Housing Trust Funds • Incentives for College Savings • Microenterprise Support

  17. 12 Core Policies (cont.) • School Spending Fairness • State EITC • State Supported Preschool • Support for Community Development Lenders • Support for IDA Programs • Tax Expenditure Reports

  18. State Policy Action • Many states have acted to improve policy • Provides significant base for action; however, most states have more to do more

  19. Scorecard Resources for Youwww.cfed.org/go/scorecard • All data available for download • State summary of data • Trend indicators showing change in 14 measures over time • Detailed information on12 core policies and additional data on 26 other asset policies • Downloadable issue briefs and policy briefs on each of the 12 core policies • Guide to create customized state scorecards • CFED’s center for policy advocacy • Media Resources and Templates • 10 Ways to Use the Scorecard

  20. Contact Jerome Uher Communications Director CFED Juher@cfed.org (202) 207-0132

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