by Randolph T. Holhut
Chief of AR Correspondents
February 7, 2013
HOW TO BRING EQUITY BACK TO OUR ECONOMY
DUMMERSTON, Vt. -- We know about the 42 million Americans that are still living in poverty, five years after the collapse of the financial markets in 2008.
What is even more frightening is how many Americans are close to joining the ranks of the impoverished.
According to the Corporation for Enterprise Development (CFED), a national non-profit organization that promotes policies and strategies to help people build and protect their savings and assets, nearly half of all Americans - 43.9 percent - have almost no savings.
In other words, nearly half of all Americans do not have enough liquid assets to survive a job loss, a medical emergency, or some other unexpected crisis.
Of this number, 88 percent are employed, and 75 percent are employed full-time. Half have at least some college education. And 1 in 4 households earning between $55,465 and $90,000 are just 90 days away from poverty.
That was just a taste of many startling figures in CFED's 2013 Assets & Opportunities Scorecard. Even more startling are the disparities between white households and households of color.
CFED found that nearly two-thirds of households of color (62.6 percent) are liquid-asset poor, compared to about a third (34.8) of white households.
They also found that white households have 11 times the median net worth ($110,973) of a household of color ($10, 824). And home ownership for white households - 72 percent - is 26 percent higher than households of color, at 46.2 percent.
Regardless of race, the bigger their problems, few American households have the basic tools to prepare for an emergency.
Nearly a third (30.8 percent) don't have savings accounts. More than half (56.4 percent) have subprime credit ratings, meaning they have no access to loans at reasonable rates of interest. And two out of three college students graduate with student loan debt, an average of about $26,600 per student.
Taken together, the median net worth of American families has declined from its peak of $96,052 in 2006 to $68,948 in 2010, the last year for which data are available).
So what would help put money into the pockets of low- and moderate-income Americans? CFED offers these ideas for state governments to adopt:
These simple, common-sense steps would narrow the gap between the 1 percent and the 99 percent, They would also strengthen our democracy and return the working class to its rightful place as the engine of economic growth in America.
But in an age when amoral capitalism prevails, is it possible to return our economy to the days when both workers and bosses shared in prosperity, rather than live under a system that has as its primary directive to make as much money as possible and the public interest be damned?
The answer to that question is simple. If we don't restore equity to our economy, so that more and more Americans aren't living in constant fear that they are a handful of paychecks from disaster, we cease to exist as a nation that is sometimes united in one American spirit.
AR's Chief of Correspondents, Randolph T. Holhut, holds a Masters in Public Administration from the Kennedy School of Government at Harvard University, and is an award-winning journalist in New England for more than 30 years. He edited "The George Seldes Reader" (Barricade Books). He can be reached at firstname.lastname@example.org.