Economic Boom Hasn't Led to Economic Prosperity For All

More than 32 percent of survey participants reported experiencing at least one type of financial insecurity in the last 12 months.

More than 32 percent of survey participants reported experiencing at least one type of financial insecurity in the last 12 months. Shutterstock

Connect with state & local government leaders
 

Connecting state and local government leaders

New research suggests that about a third of Americans struggle with financial security, including many who would be considered middle class.

A third of Americans with moderate incomes faced some financial insecurity in 2017 despite low unemployment rates and a flourishing economy, according to new research from the nonprofit Urban Institute.

“Slow income growth and rising health-care and housing costs challenge the economic security of low- and moderate-income families,” says the recently released report. “Despite the country’s recent economic prosperity, many families, including many middle-income families, fear they will not have enough resources to maintain financial stability.”

Researchers surveyed more than 7,500 adults between the ages of 18 and 64 on two measures of financial distress. The first, financial insecurity, looked at respondents’ ability to “come up with a small amount of money to buffer negative economic shocks” or to pay monthly bills, including credit card balances and non-mortgage loan payments. The second measure gauged respondents’ use of “alternative financial services” to bridge temporary cash shortages, including payday loans, auto title loans or selling items at pawn shops.

More than 32 percent of survey participants reported experiencing at least one type of financial insecurity in the last 12 months. Fourteen percent of adults had been contacted by a debt collector, while 13 percent had missed a payment on a credit card or a non-mortgage loan. Nearly a quarter of them—22 percent—”were not confident they could come up with $400 for an unexpected expense.”

Likewise, about 12 percent of respondents had used an “alternative financial service” in the past year. Nearly 6 percent had sold items at a pawn shop, while 5.6 percent had taken out a payday loan and 3.7 percent had taken out an auto title loan. This, more than other metrics, showed the severity of financial constraints at play for respondents, researchers wrote.

“Parting with valuables can be a last resort for adults and families who have few other options when faced with pressing financial or material hardships, such as paying a past-due bill or making an urgent car repair,” the report says.

Young adults, unmarried people and black and Hispanic adults were more likely to access those services and to experience financial insecurity in general. Women also experience significantly more financial insecurity than men, according to the data.

“Even a relatively strong economy may not be enough to close financial gaps to produce comparable rates of financial stability for disadvantaged groups,” the report says.

And while families in poverty are more likely to experience financial hardship, households with higher incomes also struggle with financial distress. About 20 percent of families with incomes between 200 and 399 percent of the federal poverty level—$40,480 to $81,680 for a family of three—do not feel certain that they could produce $400 for an unexpected expense, and nearly 34 percent of those families experience some form of financial insecurity.

Policies, including financial coaching and employer-incentivized saving, could help combat financial distress, researchers concluded.

“Raising incomes could also lead to more financial security,” they wrote. “Although our brief shows that even low- to moderate-income adults experience financial distress, the degree of distress decreases with movement up the income ladder.”

Other potential solutions include expanding the earned income tax credit and buffering low unemployment rates with “policies that continue to advance employment and earnings for women and people of color, such as universal pre-K, expanded family leave, equal opportunity employment protections, and minimum wage increases.”

X
This website uses cookies to enhance user experience and to analyze performance and traffic on our website. We also share information about your use of our site with our social media, advertising and analytics partners. Learn More / Do Not Sell My Personal Information
Accept Cookies
X
Cookie Preferences Cookie List

Do Not Sell My Personal Information

When you visit our website, we store cookies on your browser to collect information. The information collected might relate to you, your preferences or your device, and is mostly used to make the site work as you expect it to and to provide a more personalized web experience. However, you can choose not to allow certain types of cookies, which may impact your experience of the site and the services we are able to offer. Click on the different category headings to find out more and change our default settings according to your preference. You cannot opt-out of our First Party Strictly Necessary Cookies as they are deployed in order to ensure the proper functioning of our website (such as prompting the cookie banner and remembering your settings, to log into your account, to redirect you when you log out, etc.). For more information about the First and Third Party Cookies used please follow this link.

Allow All Cookies

Manage Consent Preferences

Strictly Necessary Cookies - Always Active

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data, Targeting & Social Media Cookies

Under the California Consumer Privacy Act, you have the right to opt-out of the sale of your personal information to third parties. These cookies collect information for analytics and to personalize your experience with targeted ads. You may exercise your right to opt out of the sale of personal information by using this toggle switch. If you opt out we will not be able to offer you personalised ads and will not hand over your personal information to any third parties. Additionally, you may contact our legal department for further clarification about your rights as a California consumer by using this Exercise My Rights link

If you have enabled privacy controls on your browser (such as a plugin), we have to take that as a valid request to opt-out. Therefore we would not be able to track your activity through the web. This may affect our ability to personalize ads according to your preferences.

Targeting cookies may be set through our site by our advertising partners. They may be used by those companies to build a profile of your interests and show you relevant adverts on other sites. They do not store directly personal information, but are based on uniquely identifying your browser and internet device. If you do not allow these cookies, you will experience less targeted advertising.

Social media cookies are set by a range of social media services that we have added to the site to enable you to share our content with your friends and networks. They are capable of tracking your browser across other sites and building up a profile of your interests. This may impact the content and messages you see on other websites you visit. If you do not allow these cookies you may not be able to use or see these sharing tools.

If you want to opt out of all of our lead reports and lists, please submit a privacy request at our Do Not Sell page.

Save Settings
Cookie Preferences Cookie List

Cookie List

A cookie is a small piece of data (text file) that a website – when visited by a user – asks your browser to store on your device in order to remember information about you, such as your language preference or login information. Those cookies are set by us and called first-party cookies. We also use third-party cookies – which are cookies from a domain different than the domain of the website you are visiting – for our advertising and marketing efforts. More specifically, we use cookies and other tracking technologies for the following purposes:

Strictly Necessary Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Functional Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Performance Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Social Media Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Targeting Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.