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Poverty hangs on even as economy improves
Thursday, January 31, 2013
by Russ Zimmer
Twin reports on poverty in Ohio were released Wednesday, showing that although conditions for Ohio's impoverished have not continued to degrade, they haven't exactly reversed course, either.
The reports, authored by separate anti-poverty coalitions, argue that factors like anemic job growth, wage stagnation and a tax policy hostile to the working poor are keeping Ohio's middle- and lower-class families from being able break through during the tepid national recovery.
In the "2013 Assets & Opportunity Scorecard," Ohio was ranked 36 out of the 50 states for fostering conditions that allow residents to achieve financial security. The scorecard is an annual report produced by a Washington, D.C.-based advocacy organization for low- and middle-income families called the Corporation for Enterprise Development.
The report, which relies on 2010 data for its findings on the economic resources of Ohio families, stated more than two in five families don't have enough cash, or assets such as stocks than can be turned into cash quickly, to survive for three months in the event of a job loss, medical crisis or some other event that can turn a household budget upside down. A family of four with liquid assets less than $5,763 in 2012 is considered liquid asset poor, according to the CFED.
But this year's report also found that families in Ohio have better overall finances, just not the readily-available funds that are necessary in an emergency. The typical Ohio family had a total net worth of $63,000 in 2010, up about $1,000 from 2009 after adjusting for inflation.
David Rothstein, project director for asset building at the progressive Policy Matters Ohio, said this reflects a trend in households wanting to get their balance sheets in line.
"What we've seen the last two years is as the recession ended, instead of spending a lot in the marketplace they are paying down debt," he said.
The scorecard shows average credit card debt this past summer was $60 lower than in summer 2011, and consumer credit scores also improved during that time, according to credit information firm TransUnion. However, the percentage of borrowers who were 90 days past due ticked up to 4.6 percent last summer from 4.3 percent in the same period in 2011.
The median hourly wage — (half above, half below — in Ohio rose by 43 cents from 2000 to 2011, according to "The State of Poverty 2012," a factbook compiled by the Ohio Associated of Community Action Agencies. Meanwhile, the combined cost of health care expenses and university tuition and fees jumped by more than $3,000 during that same time.
This has contributed to abject poverty — about one in 13 Ohioans live in households that report income below half of the poverty line, or less than $1,000 per month for a family of four — as well as a significantly larger segment of the population teetering between self-sufficiency and reliance. About 19 percent of the state's population lives between 100 and 200 percent — $46,100 for a family of four in 2012 — of the poverty line.
Rothstein said a common misconception about poverty is that its predominantly an urban phenomenon.
"All the research we've ever done has shown that's not really the case," he said.
Families living in rural areas, especially those in Appalachia, are just as susceptible to financial crisis as the family living downtown, Rothstein said.
The CFED proposed several recommendations, including: