Few in Pennsylvania maintain a financial safety net
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More than one-third of residents in Pennsylvania are living so close to the edge financially they don't have enough saved to live at the poverty level for three months if they lost a job or had some other emergency.
The nonprofit Corporation for Enterprise Development ranked all the states using a measure called the Assets & Opportunity Scorecard to determine Americans' ability to fend off poverty and have a prosperous future.
"If there is anything the economic recession has taught us, it is that families need their own personal safety net," said Andrea Levere, president of the group based in Washington, D.C.
"We came up with a measure called 'liquid asset poverty' because it's not just the income you earn, but what you own as well," she said. "If you have savings accounts or other assets you can turn to when you need it, you are by definition more financially secure."
Federal poverty thresholds are updated each year by the Census Bureau. For 2012, the poverty level for a family of four is set at $23,050 a year.
The report paints a picture of middle class and low-income working families having a rough time.
Pennsylvania ranked 10th in the nation overall in terms of "liquid asset poverty," which means 34.6 percent of residents here do not have the liquid assets to live at the poverty line for three months without income from a job.
Hawaii ranked No. 1, with 22.8 percent of its residents living in liquid asset poverty. Nevada ranked lowest with 45.2 percent.
The Corporation for Enterprise Development also has used a measurement called "asset poverty" for the past 10 years to measure financial health. The asset poverty measure includes the value of a person's home, car and business, but those assets could not be liquidated quickly if need be.
Ms. Levere said liquid asset poverty is a better measurement of a family's ability to weather an economic shock because bank accounts, stocks, bonds and other liquid assets can be quickly converted to cash without losing much value in the conversion.
First Published February 1, 2012 12:00 am
