NC Budget and Tax Center, Poverty and Policy Matters, Uncategorized

ASSET POVERTY IN NC: AN IMPORTANT DIMENSION OF HOUSEHOLD ECONOMIC SECURITY

Economic security throughout the life course is linked to income and asset ownership. Households that are poor or low-income have a hard time building assets and, as a result, face a significant barrier to long-term financial stability. According to a recent report by the Corporation for Enterprise Development (CFED), asset poverty is on the rise in North Carolina.

More than 1 in 4 households in the state are “asset poor,” meaning they do not have adequate resources to keep them out of poverty for three months in case of a layoff, a reduction in hourly wages, or an emergency. Nearly 1 in 2 households are “liquid asset poor,” meaning they do not have immediate access to savings. Even more unsettling, the share of asset-poor households is much higher for households of color.

Asset poverty is distinct from the traditional federal poverty threshold—which was $22,314 for a family of four in 2010—as it measures a household’s financial vulnerability as well as the ability to access opportunities requiring significant upfront investments

What qualifies as an asset or a liquid asset? If you listened to Fergus Hodgson, the Director of Fiscal Studies at the John Locke Foundation, on Carolina Journal Radio (audio is included below), you may believe that household appliances are assets.

[audio:http://pulse.ncpolicywatch.org/wp-content/uploads/2012/04/Fergus-Hodgson-on-Poverty-and-Assets1.mp3|titles=Fergus Hodgson on Poverty and Assets]

Contrary to the information shared in this recording, household appliances—such as televisions and microwaves—are not assets. As succinctly pointed out by the Center for American Progress, these household appliances have limited re-sale value and cannot be sold to lift a struggling family out of poverty. Assets, on the other can, can help families fend off poverty.

Assets are stocks of resources that people accumulate over time and are a means to build wealth. Because they are investments, assets generate returns and are a source of security against unexpected economic events. Examples include home ownership, savings accounts, retirement savings accounts, and advanced college education.

Income and asset poverty exist in North Carolina and they are a barrier to economic opportunity and greater stability and prosperity in the broader economy.

Check Also

Redesigning TANF to lift more families out of poverty

The 1996 welfare law that created Temporary Assistance ...

Top Stories from NCPW

  • News
  • Commentary

When Gov. Roy Cooper visits Wilmington on Monday, it's unlikely that he will be greeted by the [...]

When Gov. Roy Cooper signed the Strengthen Opioid Misuse Prevention or STOP Act into law last month, [...]

Support for needy districts and key positions within North Carolina’s top public school agency may b [...]

Wilmington is bustling this summer. Downtown, horse-drawn carriages take tourists along the riverfro [...]

It’s not an original thought to point out that the Trump Administration is a larger version of what [...]

Why this is not “business as usual” and should not be condoned Sometimes all one can do is stand and [...]

5.0---percentage of overall state spending in the 2017-2018 budget passed by the General Assembly as [...]

The post A legislative addiction appeared first on NC Policy Watch. [...]

Featured | Special Projects

NC Budget 2017
The maze of the NC Budget is complex. Follow the stories to follow the money.
Read more


NC Redistricting 2017
New map, new districts, new lawmakers. Here’s what you need to know about gerrymandering in NC.
Read more