Has the U.S. economy recovered? Some of the key indicators, including improvements in the housing market, unemployment and stocks, point to yes. Even so, many Americans are looking at their lives and asking, “What economic recovery?”
A new report, released by the Corporation for Enterprise Development, found that millions of Americans have essentially been bypassed by the economic recovery in the United States.
“Not only are these households not reaping benefits of an improving economy, they are living outside the economic mainstream, relegated to using fringe — often high-cost — financial services and products that trap them in a cycle of debt and financial insecurity,” the report said.
The CFED report summarizes the findings from its 2015 Assets and Opportunity Scorecard, which includes state-by-state assessments. It highlights these five issues:
- Financial assets and income. About 44 percent of U.S. families live in liquid-asset poverty. In addition, when it comes to income inequality, “those in the bottom quintile earned one-fifth the income earned at the top quintile ($21,159, compared with $106,196),” the report said. The result, it says, is that many Americans resort to taking out high-interest, predatory loans to make ends meet.
- Businesses and jobs. According to the CFED, 25 percent of available jobs in the country are low paying, an increase of 4 percent from last year. Women and workers of color hold a disproportionate number of low-income jobs. Meanwhile, the report says that average annual pay across the board continued nearly a decade of stagnation and actually fell between 2012 ($50,011) and 2013 ($49,808).”
- Housing and homeownership. Although the housing market is more stable now, the homeownership rate is just 63.5 percent, a nearly 20-year low. The disparity between races is striking: 71.1 percent of white households own their home, compared with 45.2 percent of families of color. Meanwhile, eight states actually cut support for first-time homebuyers.
- Education. “While graduation rates have steadily increased nationally and in most states, these positive trends are offset by large gaps in attainment by race and income and rising student loan debt,” the report said.
- Health care. The Affordable Care Act is expected to help shrink the gap in coverage between races. But in 2013, there was still a significant gap between the rate of uninsured Americans of color (24.3 percent), and white Americans (12.3 percent). One contributing factor was the decision by several states to not expand Medicaid, which left “millions of financially insecure Americans without health insurance,” the report said.
The report concluded that policies designed to decrease poverty and help low-income families are necessary and can have a profound impact:
Without effective policies, those starting at the bottom of the economic ladder will have very little opportunity to climb higher. Those in the middle are likely to see their prospects stagnate or fall without savings and assets to help them weather the rough times and invest in a more prosperous future.
Are you surprised by the lopsided economic recovery in the United States? Share your comments below or on our Facebook page.
If you’re still trying to recover from the recession and need to get out from under debt, watch this video for tips.
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