When we talk about poverty- you always think about somebody else right?
Well, a report released today says when you look at poverty in terms of assets – not income - then a whole lot more of us are poor.
At least something called ‘liquid asset poor.’
Ask Stratham-resident Lois Matheson where she and her husband keep their money.
“In a savings account, in a 401 account, in a retirement account of some kind, an annuity account.”
That’s liquid asset wealth...money you can get to when you need to.
Which is exactly what Matheson did after she lost her job back in 2010.
“That was the first time that I thought, ‘this is not a good situation, this is not something I want to be doing.’”
But for the past 16 months the Matheson’s have been dipping into their 35 years worth of reserves because they can.
A new report from the Corporation for Enterprise Development finds that many Americans cannot.
The Corporation’s Andrea Levere.
“43% or almost half of this country is living in liquid asset poverty.”
That means some 50 million families don’t have money to cover the basics for more than three months when faced with job loss.
In New Hampshire, that works out to about 300,000 families.
This report evaluates how well states help residents build and retain assets.
Comparatively speaking, New Hampshire does better than most.
The state enjoys high marks for employer-provided health coverage, home ownership and education attainment.
But the Corporation’s Levere says she the debt load the state saddles on college graduates is striking.
“In the whole United States they are virtually the worst when it comes to the amount of college debt that students have. If we believe education is the key ingredient in economic competitiveness and prosperity in the future that New Hampshire should think about how we incent college savings so we lower this rate of debt for the students.”
New Hampshire also has the lowest household income poverty nationwide at about 8%, that compares to the national average at 14%.
But Ray Boshara with the Federal Reserve in St. Louis says income poverty doesn’t tell the full story.
“For too long, we’ve focused simply on income. We didn’t focus on savings and assets.”
Given the awful job market, income has become more unreliable than before the Recession.
If you can’t count on your job, then Boshara says people have to look at what else they own.
But the Senior Fed Advisor says the benefit of liquid savings isn’t just about weathering financial storms.
“You don’t have to go to the check casher or the payday lender if you need some cash. You can open up a mainstream banking account...and it also means you can start a business, you also can make a down payment on a home.”
Boshara says easy to grab cash helps determine who stays in poverty, who falls further behind and who moves up.