While the official poverty rate in 2010 was 15.1 percent, there's a lot of controversy over how poverty should be measured, and still more over how we should view proximity to poverty, the people who aren't poor but are dangerously close to it. Here's another way of looking at that. The Corporation for Enterprise Development has released its annual assets and opportunity scorecard, scoring the states on how well they promote household financial security through jobs, education, health care, housing and financial assets. Do states support very small businesses? Do they provide quality public education and incentives to college savings? Do they have a minimum wage above the federal minimum and provide cost of living adjustments? Do they provide tax credits to low-income families and prohibit predatory payday lenders?
The scorecard finds that the asset poverty rate of American households is 27.1 percent—these families don't have enough savings or other assets to subsist at the poverty level for three months if they lost their income, even if they were able to liquidate every asset they had in that time. Liquid asset poverty, a measure that excludes hard-to-get-rid-of things like houses and cars, is still higher, at 43.1 percent. That means a great many people who are working now, who aren't showing up on traditional poverty measures, are leading incredibly fragile lives and could easily be thrown into poverty by any crisis. As with almost every measure of this kind, there are huge racial gaps—34.1 percent of white households are in liquid asset poverty, in contrast to 64.6 percent of households of color.
These things don't just happen in isolation, as the scorecard shows. States can take action through policy to make it easier for low-income people to save money, strengthen their financial position, educate their children. Expanded eligibility to Medicaid or access to COBRA coverage can mean that a medical crisis doesn't become a financial devastation. But too few states do adopt the policies that would help families achieve the security to weather a job loss or medical crisis or to help their kids get the education to achieve greater security themselves.
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