Giving Compass' Take:

• These key findings from the Prosperity Now Scorecard highlight the financial vulnerability Americans are facing. 

• How can funders work to fight financial vulnerability at scale? How are state and local policies shaping financial vulnerability in your community? 

• Learn about making an impact on wealth inequality. 

Headlines at the beginning of 2019 touted America’s booming economy, but the government shutdown has illustrated how disconnected that narrative is from the day-to-day financial lives of most Americans. Economists look to the labor market and official unemployment numbers to judge the strength of the economy. However when people with federal or federally-contracted jobs—mostly stable jobs with benefits—had to go without pay for several weeks, some had to resort to selling belongings to pay bills and turning to food banks to put food on the table. One interruption to their income was enough to put these households in financial crisis. This level of financial vulnerability is all too common in the United States, particularly for people of color who were by and large left out of the economic recovery from the last recession. The data from the 2019 Prosperity Now Scorecard shows that there are millions of families either struggling to make ends meet or just one emergency away from a financial disaster.

The predominant methods of measuring economic growth provide an inaccurate analysis of how families are actually faring in today’s economy, often omitting key details that have the most tangible implications for financial well-being. Drawing from a broad set of indicators across issues such as job quality, savings, credit, education and health, the 2019 Prosperity Now Scorecard reveals a more complete picture of financial stability at the national, state and local levels. The 2019 Scorecard finds that:

  • Forty percent of American households lack a basic level of savings. These “liquid asset poor” households don’t have enough savings to make ends meet at the poverty level for three months if their income was interrupted.
  • 13.2% of American households fell behind on their bills. This includes roughly one in four of Black households, households with volatile incomes, and householders with a disability.
  • Almost half (48.1%) of Americans with credit have scores below prime, but nearly 20% of households did not have mainstream credit in the past 12 months and are likely without access to it.
  • For the first time since the passage of the Affordable Care Act, the percentage of low-income children without health insurance has increased and the overall uninsured rate has stopped improving.
  • Housing costs are rising faster than incomes, keeping the homeownership rate from rebounding significantly. This has an especially large effect on households of color, who bore the brunt of the recent foreclosure crisis and have faced discrimination in both public policy and financial markets. As a result, they continue to have significantly lower homeownership rates than White households.
  • This institutional racism and baked-in discrimination in our economy has created a racial wealth gap that far outpaces income inequality. At the median, Black households earn 61 cents and Latino households earn 76 cents for every dollar earned by White households. Wealth disparities are even more stark: Black households own only six cents and Latino households own 13 cents for every dollar of White wealth.