Degrees of Exclusion: Signs of Economic Progress Don’t Account for the Financially Vulnerable

Conventional wisdom suggests that the economy has bounced back. Low unemployment levels, a booming stock market and a stabilized housing market all paint the picture of a prosperous America.

But if you look at the pocketbooks of the average American, the outlook is far from rosy.

As CFED’s newly released 2015 Assets & Opportunity Scorecard reveals, the U.S. economy may be improving, but how individuals and families are faring in the economy is not. The Scorecard data confirm what most families have known for a while—that even those squarely in the middle class are living on the brink of financial disaster. In fact, 44% of American households (nearly 50% in Florida and 60% in Miami-Dade County) live in liquid asset poverty, meaning they lack the resources necessary to subsist at the poverty level in the event that a job loss or medical emergency leaves them without their primary source of income. 

The high liquid asset poverty rate is perhaps unsurprising given the patterns we see emerge from the Scorecard data. Among those patterns:

• Control over day-to-day and month-to-month finances. One reason households struggle to control their day-to-day finances is because even as unemployment rates tick downward, wages have actually declined since 2012.

• Capacity to absorb a financial shock. Not having emergency savings means that liquid asset poor families can’t overcome otherwise minor setbacks such as a broken-down car.

• Being on track to meet financial goals. Being riddled with debt, lacking strong credit scores or not having a bank account make it so that even families that might otherwise get by lack the flexibility to invest in assets like a home or a college education for their kids.

While these findings reveal that just about all families are experiencing some kind of exclusion from the financial mainstream, the Scorecard also indicates that the degree of exclusion is much greater for some families than for others. Perhaps unsurprisingly, Black and Hispanic households, younger households, low-income households, and households in the South and Southwest are much more likely to experience financial exclusion.

Together, the data paint a grim picture for American households. However, the Scorecard story isn’t all bad. In addition to the outcome measures tracked, the Scorecard also examines the policies available to states in their quests to promote financial stability among their residents. Analysis confirms that in most states, these policies make a significant difference; where policies are in place, outcomes tend to be higher. In other words, while states have much work to do to improve the financial well-being of their residents, many opportunities exist to make a meaningful difference.

For a full analysis state- and national-level outcome and policy data, visit

http://scorecard.cfed.org.