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Recession May Be Past, But Underemployment and Low-Wage Jobs Still Define Landscape in Mississippi

January 25th, 2016

For Immediate Release                       Contact:  Kristin Lawton, 202.207.0137
January 25, 2016

State Ranks Worst in Nation Overall in Financial Security of Residents; Households of Color Face Huge Uphill Climb

WASHINGTON, D.C. – Even though the national unemployment rate has dropped to 5 percent in recent months, the underemployment rate in Mississippi remains stubbornly high with a growing number of state residents stuck in low-wage jobs, according to a new report from the Corporation for Enterprise Development (CFED).

Indeed, 62 percent of Mississippi’s households are locked into a “new normal” of perpetual financial insecurity, unable to build the savings needed to last even three months in the event of an emergency. The research, reflected in CFED’s 2016 Assets & Opportunity Scorecard, also found that state policies are doing little to improve the financial security of Mississippians.

The situation is most dire for households of color. African-American and Latino consumers in Mississippi are more likely to have subprime credit scores and significantly more likely to live below the federal poverty line compared to white households. Even more startling, new data show that businesses owned by whites in Mississippi are valued over nine times higher than similar businesses owned by African-American residents.

“Over half of Mississippi’s counties are in persistent poverty, where more than 20 percent of people have lived in poverty for over 30 years,” said Jessica Shappley, senior policy analyst for Hope Policy Institute. “The Scorecard data underscore the need to invest in persistent poverty areas to foster job creation, affordable housing, and access to quality financial services that help create better lives for people.”

Published annually, the Assets & Opportunity Scorecard offers the most comprehensive look available at Americans’ ability to save and build wealth, stay out of poverty and create a more prosperous future. This year’s Scorecard assesses all 50 states and the District of Columbia on 61 outcome measures spanning five issue areas: Financial Assets & Income, Businesses & Jobs, Housing & Homeownership, Health Care and Education. It also ranks the states on 69 policies that promote financial security. When it comes to outcomes, Vermont ranks at the top of the country overall, while Mississippi ranks last.

Mississippi ranks last both in its overall outcomes and in the area of Financial Assets & Income, with the highest income poverty rate (20.8%) and rates of unbanked (14.5%) and underbanked (32.8%) households in the country. It also ranks last in every credit measure in the Scorecard, including the percentage of consumers with prime credit (35.0%) and percentage of credit users with access to revolving credit (49.3%). In the Health Care category, the Magnolia State has the highest rate of adults reporting that they could not see a doctor due to cost (19.4%). Mississippi has relatively promising outcomes in the area of Housing & Homeownership, where it has the 16th highest homeownership rate and 9th greatest affordability of homes, as median home values are only 2.6 times higher than the median income.

The Scorecard also evaluates 69 different policy measures to determine how well states are addressing the challenges facing their residents. Mississippi ranks among the last 15 states in all categories but Health Care, in which it ranks 20th. It comes in 36th in Businesses & Jobs, 40th in Financial Assets & Incomes and 50th in Housing & Homeownership. Mississippi ranks 46th in Education, having adopted only three of 16 policies that would help Mississippians receive the quality, affordable education they need to get ahead.

Across the nation, the Scorecard found scant evidence that federal and state governments were willing to embrace policies that would open new doors to greater financial security for those struggling the most in the American economy. Without such commitments, most low-income individuals—particularly people of color—find themselves falling farther behind.

Among the key findings from this year’s Scorecard:

  • There is a significant affordable rental housing shortage nationally and in many states. As a result, more than half (51.8%) of renters are cost-burdened, which means they spend more than 30% of their income on housing.
  • That spending on housing reduces funds for food, healthcare, child care and other basic needs. For example, 14.3% of adults say they didn’t see a doctor over the last year because of cost. The statistics are worse for adults of color; one in four Latino adults and one in five African-American adults said financial concerns prevented them from seeing a doctor.
  • Even people of color who started their own businesses to make it through the Great Recession are falling farther behind. New data show that the value of minority-owned businesses declined by an average of more than $12,000 from 2007-2012, while businesses owned by white individuals increased in value by an average of more than $106,000 during that same period.
  • The process of managing bills week to week rather than month to month—“robbing Peter to pay Paul”—means low-income individuals and families turn to high-interest, short-term loans. Fewer than half of all consumers (48.9%) have prime credit and only about 68% of consumers have access to revolving credit.

“There certainly are positive signs that the nation’s economy is improving,” noted Andrea Levere, President of CFED. “But there also is very compelling evidence that many households are stuck in a financial hole and are struggling to dig themselves out. State governments can play a critical role in helping them move on to firmer ground and a more prosperous future.”

To read an analysis of key findings from the 2016 Assets & Opportunity Scorecard, click here. To access the complete Scorecard, visit http://scorecard.cfed.org.

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CFED’s work makes it possible for millions of people to achieve financial security and contribute to an opportunity economy. We scale innovative practical solutions that empower low- and moderate-income people to build wealth. We drive responsive policy change at all levels of government. We support the efforts of community leaders across the country to advance economic opportunity for all. Established in 1979 as the Corporation for Enterprise Development, CFED works nationally and internationally through its offices in Washington, DC; Durham, North Carolina, and San Francisco, California.

To improve policies and programs that promote financial security and opportunity, CFED is the backbone organization for a national Assets & Opportunity Network, which is comprised of nearly 2,000 advocates, service providers, researchers, financial institutions and others representing all 50 states and DC. To learn more about the Assets & Opportunity Network and to join, visit http://assetsandopportunity.org/network.

 

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