Many families across the state lack the resources necessary to survive in the event that a job loss or medical emergency leaves them without their primary source of income. These families, considered to be “liquid asset poor”, go to work each day but struggle make ends meet.
Control over day-to-day and month-to-month finances. One reason households struggle to control their day-to-day finances is because even as unemployment rates move downward, wages have actually declined since 2012. In Mississippi, almost one-third of all jobs are low-wage jobs.
Capacity to absorb financial shock. Not having emergency savings means that liquid asset poor families can’t overcome otherwise minor setbacks such as a broken down car. The median net worth of Mississippi households is $35,302, while the median net worth of U.S. households is $70,359.
Being on track to meet financial goals. Being riddled with debt, lacking strong credit scores or not having a bank account make it so that even families that might otherwise get by lack the flexibility to invest in assets like a home or a college education for their children. For instance, 14.5% of Mississippi households are unbanked – the highest rate in the nation.
Together, the data paint a grim picture for Mississippi households. However, it also reveals several bright spots for the state. Both unemployment and high-cost mortgage loan rates improved from last year. Additionally, Mississippi has the 8th lowest level of credit card debt, with an average of $6,837 per borrower.
There is much work to be done to help lift Mississippi families out of poverty. A refundable state Earned Income Tax CreditThe Earned Income Tax Credit (EITC) is a federal tax credit for low- and moderate-income working people. It is designed to encourage and reward work as well as offset federal payroll and income taxes. The EITC is "refundable," which means that if it exceeds a low-wage worker's income tax liability, the IRS will refund the balance. Twenty-five states, including the District of Columbia, have established their own EITCs to supplement the federal credit. would provide an economic boost for families living at or below the poverty line in Mississippi and help these families have a chance to build a solid financial future.
Over the next several months, MEPC will be sharing information about the 2015 Assets & Opportunity Scorecard and promoting policy options for building assets among low-wealth families.
Source: Corporation for Enterprise Development. (2015). Assets and Opportunity Scorecard, 2015. Retrieved from http://assetsandopportunity.org/scorecard/