liquid asset poverty,” just one emergency away from financial ruin.
Perhaps more troubling about this data—released today by the U.S. Census Bureau—is that it remains virtually unchanged, marking the fourth year in a row in which the rate of poverty in the US hasn’t budged.
Although these data don’t provide much reason to rejoice, there is some good news. This year marks the first time the Census Bureau has also released updated data on the Supplemental Poverty Measure simultaneously with the official poverty figures. This is a victory for advocates because it offers an alternative to measuring poverty, which experts and researchers have argued for years fails to reflect the full amount of income a family needs to live in our current economy. By this measure, 15.3% of Americans are living in poverty—1.4 million more households than are accounted for by the federal poverty guideline measure. While that number is far too high, having a more accurate estimate of who lives in poverty is critical for organizations like CFED who are working to create an economy built on opportunity and inclusion.
Yet even the supplemental poverty rate still only captures one aspect of a family’s financial life: its income. While income helps families get by, we know that assets help families get ahead. Assets are crucial to a family’s financial well-being and matter economically, socially and psychologically. By not capturing families’ assets, federal poverty measures fail to take into account the financial fragility of a wide segment of our population.
At CFED, we use the concept of asset poverty and liquid asset poverty to broaden our understanding of financial instability. These measures take into consideration the assets a family has to weather a financial storm such as a job loss or medical emergency, defined by their ability to live for three months at the poverty level.
Our partners agree that true economic security means much more than having an income just above the federal poverty threshold. In the coming weeks, CFED’s team of expert researchers will join the national conversation about poverty and financial security through a series of blog posts that dig deeper into the new poverty data, as well as the data on health insurance coverage also released today and the results of the latest American Community Survey coming out tomorrow. We believe these analyses are critical as they inform the strategies CFED and our partners will advance as we work toward building the opportunity economy we all envision.
To look up estimates of asset poverty and liquid asset poverty in your community, visit the A&O Local Data Center.