Oklahoma ranks low in financial stability
BY LAURIE WINSLOW World Staff Writer
Wednesday, January 30, 2013
1/30/13 at 8:02 AM
The recession's lingering effects have taken an enormous toll on Oklahoma families, as more than two in five state residents have almost no savings for an emergency, according to a report released Wednesday by the national nonprofit Corporation for Enterprise Development.
The 2013 Assets & Opportunity Scorecard ranks Oklahoma 32nd for the financial stability of its residents, up one notch from 33rd last year.
The scorecard offers a comprehensive look at Americans' ability to save and build wealth, fend off poverty and create a more prosperous future. It evaluates all 50 states and the District of Columbia on how their residents fare in terms of achieving financial security across 53 measures in five areas.
In Oklahoma, nearly 44 percent of residents are considered "liquid asset poor," which means they lack adequate savings to cover basic expenses at the federal poverty level for three months if they suffer a loss of stable income.
This includes Oklahomans who live below the federal income poverty level of $23,050 for a family of four as well as many who consider themselves middle class, according to the report.
It says 26 percent of households earning between $44,893 and $73,140 per year have less than three months of savings, or $5,762 for a family of four.
Additionally, 23.4 percent of Oklahomans are asset poor, meaning the assets they have such as a savings account or durable asset such as a home, business or car are overwhelmed by debt, according to the report.
"The really clear takeaway is that when wages are too low for too many people, it becomes a problem in terms of wealth building," said Kate Richey, a policy analyst with the Oklahoma Policy Institute.
According to the report, 32 percent of jobs in Oklahoma are low-wage positions, ranking the state 46th in wages.
"If someone works full time and still doesn't earn enough to make ends meet or have money left over to buy a house or car, that becomes a serious problem and prevents people from building wealth," Rickey said. "When people run out of money, they may turn to outlets with incredibly high interest, which becomes a further drain on low wages.
"People working full time can't raise a family on the wages of most jobs, and this scorecard shows this. About one of every three jobs in Oklahoma is an occupation that pays below poverty wage."
The scorecard grades and ranks states in five areas: financial assets and income, businesses and jobs, housing and homeownership, health care, and education.
Oklahoma earned a "D" and ranked 39th in the area of financial assets and income. The states ranks 42nd in households served by a bank and 45th in households with savings accounts.
Nearly 63 percent of Oklahomans have subprime credit scores, the 44th worst rate in the nation.
Oklahoma ranked well in two areas of debt, however. The state has the fourth-lowest level of credit card debt with an average of $6,495 per borrower compared to a U.S. average of $10,736.
The percentage of college graduates with debt is 53 percent compared to a U.S. average of 66 percent, ranking Oklahoma No. 10. Also, the average college graduate debt is $20,897, below the U.S. average of $26,600, putting the state at No. 8.
The less school debt people have helps them save for a home or further their education, said Kasey Wiedrich, senior program manager for the Corporation for Enterprise Development.
But, Wiedrich said, "There is still a really large savings gap between what families have and what they really need to have - that personal safety net that could potentially get them through a job loss or medical emergency, or even something like if they had to fix their car."
Oklahoma earned a "B" in the categories of "business and jobs" as well as "housing and homeownership," and ranked 18th and 15th, respectively.
The state ranked No. 14 for its microenterprise ownership rate and No. 17 for its small business ownership rate. Nearly 49 percent of Oklahomans participate in a retirement plan compared to almost 45 percent of the nation, putting the state at No. 19.
The state has a 67 percent homeownership rate and ranked 29th.
The report also offers suggestions on what Oklahoma can do to help residents, including increasing the Earned Income Tax Credit and funding a state Individual Development Account program. To ensure access to safe financial products, the state should put in protections against payday loans or high-cost short-term loans, Wiedrich said.
Financial report card
2013 Assets & Opportunity
Scorecard for Oklahoma
Financial Assets & Income.......D
Business & Jobs .......................... B
Housing & Homeownership .... B
Health Care ..................................D
Source: Corporation for Enterprise Development
Laurie Winslow 918-581-8466