4 in 10 US families lack money for essential household expenses when unemployed

Nov 17, 2009

Today the Institute on Assets and Social Policy (IASP) at Brandeis University's Heller School released a new research and policy brief which reports that four in ten U.S. families lack sufficient assets to pay for essential expenses in the face of unemployment.

IASP created a new approach to measuring asset poverty that includes benefits and compares families' asset holding to their ability to pay for essential household expenses and also to invest in future opportunities for mobility, such as a home purchase, business start-up, retraining, or education.

The IASP research and policy brief also shows that less than half of all U.S. families have sufficient savings to address essential expenses and invest in opportunities for mobility when faced with a job loss. Moreover, many more of color lack the financial assets to meet their expenses during periods of unemployment. Sixty-six percent of African American and Latino households are not asset secure, and only 20 percent of households of color have financial assets to invest in opportunities for mobility. While most American families lack sufficient wealth to invest in education, housing, business ventures, or training for better jobs, the dramatic distance that marks families of color is a reflection of the profound, deep, and systematic racial wealth gap.

"The wealth gains of families of color over the past two decades are being savaged by the Great Recession, illustrating the persistence of the racial wealth gap in the U.S.," said Thomas Shapiro, IASP Director and co-author of the report.

Unemployment rates topping 10 percent are the highest in 26 years. Families are working more hours and taking on more part-time jobs. At the same time, unemployment benefits are running out for many families. Faced with the worst since the Great Depression, many U.S. families have no choice but to draw on inadequate savings to pay for essential household expenses. Many of these families are at risk of losing their housing. They may also cut back on food and healthcare to make ends meet.

"This timely and incisive report documents the lack of financial capacity of families to weather tough times. In this financial crisis, millions of American families have used up their nest-eggs, with job and wage recovery nowhere in sight," said Robert Kuttner, co-editor of The American Prospect, a Senior Fellow at Demos, a nonpartisan public policy and advocacy organization, and Author of "Obama's Challenge."

"Now, more than ever, Tom Shapiro, Melvin Oliver and Tatjana Meschede, turn our attention toward what it will take to make America again, the land of opportunity," Said Bob Friedman, Chair, Corporation for Enterprise Development (CFED).

Source: Brandeis University (news : web)

Explore further: 3 Qs: Economist makes the case for new quasi-experiments as a way of studying environmental issues

add to favorites email to friend print save as pdf

Related Stories

American seniors living longer on less, study

Jan 28, 2009

Older Americans have experienced huge, negative financial shifts that now make it more difficult to enter retirement with sustainable economic security, a new study finds. Seventy-eight percent of all senior households are ...

Recommended for you

Which foods may cost you more due to Calif. drought

Apr 17, 2014

With California experiencing one of its worst droughts on record, grocery shoppers across the country can expect to see a short supply of certain fruits and vegetables in stores, and to pay higher prices ...

Performance measures for CEOs vary greatly, study finds

Apr 16, 2014

As companies file their annual proxy statements with the U.S. Securities and Exchange Commission (SEC) this spring, a new study by Rice University and Cornell University shows just how S&P 500 companies have ...

Investment helps keep transport up to speed

Apr 16, 2014

Greater investment in education and training for employees will be required to meet the future needs of the transport and logistics industry, according to recent reports by Monash University researchers.

User comments : 0

More news stories

Study finds law dramatically curbing need for speed

Almost seven years have passed since Ontario's street-racing legislation hit the books and, according to one Western researcher, it has succeeded in putting the brakes on the number of convictions and, more importantly, injuries ...

Treating depression in Parkinson's patients

A group of scientists from the University of Kentucky College of Medicine and the Sanders-Brown Center on Aging has found interesting new information in a study on depression and neuropsychological function in Parkinson's ...