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United Way of Southeast Louisiana
Financial Stability—Eliminating Poverty
Presented by: Odessa Adams-Payne
Educational Session
Financial Asset Building
“With income we get by, but with financial assets we get ahead.”
Ray Boshara
--Vice President of New America Foundation
“Few people have ever spent their way out of poverty. Those who
escape do so through saving and investing for the long-term.”
Michael Sherraden
--Center for Social Development, Washington University
Definitions
 Income Poverty Rate—percentage of households with
income below the poverty threshold. ($11,490)
 Asset Poverty Rate—percentage of households without
sufficient net worth to live at the poverty level for 3 in the
absence of income.
 Liquid Asset Poverty Rate—percentage of households
without liquid assets (bank accounts, other financial assets)
to live at the poverty rate for 3 months in the absence of
income.
 Level of assets needed to live at the poverty level for 3
months varies by family size. For example, a family of four
would need at least $4,632.
Louisiana Profile
 Income Poverty Rate
19.7%
 Asset Poverty Rate
26.1%
 Liquid Asset Poverty
47.4%
 Louisiana Ranks 50th in Income Poverty
Rate
United Way of Southeast Louisiana
Asset Poverty
Louisiana Profile
Percentage of Asset Poverty
19.7%
47.4%
26.1%
Income Poverty
Asset Poverty
Liquid Asset Poverty
2 in 3 Households of Color are
Liquid Asset Poor;
Source: CFED—Assets & Opportunity Scorecard—January, 2013
5
Comparison of Louisiana & United States
47.4%
50
45
40
35
30
25
20
15
10
5
0
43.9%
26.1%
26.0%
19.7%
14.6%
Louisiana
United Way of SELA
United States
Income Poverty
Asset Poverty
Liquid Asset Poverty
Net Worth Comparison
$110,973
120000
100000
80000
60000
40000
20000
$10,825
0
Household of Color
United Way of SELA
White Households
United States
MORE THAN $90,000
$55,465 - $90,000
$34,837 -$55,464
5.1%
83% EARN
11.5%
LESS THAN
18.9%
$55K
a year
$18,181 - $34,836
LESS THAN $18,181
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28%
36.5%
Households with Savings
69.2%
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58.9%
Louisiana
United States
Unbanked and Underbanked
20.1%
United States
8.2%
Underbanked - Ranked #47
Unbanked - Ranked 45th
27.2%
Louisiana
11.5%
0
United Way of SELA
10
20
30
Low Wage Jobs
35.00%
32.2%
30.00%
25.00%
21.5%
20.00%
15.00%
10.00%
5.00%
0.00%
Louisiana
United Way of SELA
United States
Average Annual Salaries
$48,500
$48,043
$48,000
$47,500
$47,000
$46,500
$46,000
$45,500
$45,516
$45,000
$44,500
$44,000
Louisiana
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United States
Retirement Plan Participation
44.6%
46
44
42
40
39.9%
38
36
34
Louisiana
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United States
Asset Poverty
Consumers with Subprime Credit
56.4%
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65%
Louisiana
United States
Households with Savings
69.2%
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58.9%
Louisiana
United States
Education
100
90
85.9%
82.5%
80
70
60
High School Dilpoma
50
2 Yr. College Degree
40
30
20
4 Yr. College Degree
36.3%
28.5%
26.3%
21.1%
10
0
Louisiana
United Way of SELA
United States
Health Care
Uninsured Rate
19.9%
20.00%
19.50%
19.00%
18.50%
17.3%
18.00%
17.50%
17.00%
16.50%
16.00%
Louisiana
United Way of SELA
United States
Social and Economic Indicators for UWSELA, LA and USA
United Way of Southeast Louisiana: Social and Economic Indicators
Location or
Service Area
% of Children (0% Pop. In
% Pop. with % Pop.
Teen Birth
# of Persons
17) living in
Poverty
Unemployment no High with 2 year % Pop. Rate (per
Total Pop. below 100%
households with
(100
Rate
School
college Uninsured 1,000
FPL
income below
FPL)
Diploma
degree
births)
200% FPL
United Way SE
LA Service Area
1,185,004
212,887
Louisiana
4,356,062
800,705
United States
298,780,000 42,739,924
Source: American Community Survey, 2007-2011
United Way of SELA
17.97
18.38
14.30
26.02
26.26
19.96
7.36
7.08
7.35
16.31
18.40
14.61
30.76
30.51
35.79
17.80
17.18
15.22
44.78
50.80
37.10
Footprint of UWSELA Service Area and LA
United Way of SELA
Building Assets
Six Core Asset Building
Strategies
FINANCIAL EDUCATION
Free financial education
curricula can help families
make informed money
management decisions.
GETTING BANKED
Bank accounts enable
families to reduce reliance
on check-cashers and
other high-cost ‘fringe’
financial services.
BORROWING / DEBT
MANAGEMENT
Families often need
assistance to establish a
positive credit history,
repair their credit, and get
out of debt.
20
IDAs
ACF’s Assets for
Independence (AFI)
provides grants for
matched savings
accounts, which can be
used to acquire lifelong
assets
PUBLIC BENEFITS
Low-income families for
eligible for federal and
state benefit programs
that can extend the
reach of their income
TAX CREDITS & FAX
PREPARATION
Low-income families can
access thousands of
dollars in tax credits
Household Financial Security Framework
LEARN build financial skills and human capital
Assets can increase earning capacity
EARN income
public benefits
SAVE for
emergencies &
the future
INVEST in assets
that will generate
wealth & income
PROTECT gains made through insurance & avoiding predatory
lending
*CFED—Why Assets Matter—2011
21
Implications for Policy
 Reinstate funding for the Individual Development Account
Program. Allow at least 20% of the funding to be used to
administer the program.
 Increase Louisiana’s Earned Income Tax Credit. Currently it is
only 3.5% of the federal credit.
 Louisiana does not provide state support for IDAs. The state
should provide at least $500 in funding per low income resident,
designate a strong steward to administer the program, allow 20%
of funding to be used for administrative costs; and ensure that
funding is stable over time.
United Way of SELA
Policy Implications Cont.
 Provide protection from Predatory Short-Term Loans—protect
consumers from predatory payday lending, the rate cap is 574%
APR; protect consumers against predatory short-term installment
loans, the cap is 81% APR; include protection for predatory
lending in basic consumer protection laws.
 Make Financial Education should mandatory early childhood
education, elementary, middle, and high school. Currently it’s
optional.
United Way of SELA
Contact Information:
Odessa Adams-Payne
[email protected]
(504) 827-6822
United Way of SELA
Thank You!