Many Nevadans on financial cliff
Las Vegas Review Journal
By: Chris Sieroty
January 30, 2013
Nearly two in three Nevada residents are living on the edge of financial disaster with almost no savings or other assets to weather a financial crisis, the national nonprofit Corporation for Enterprise Development said today.
The group's "2012 Assets & Opportunity Scorecard" said that 43.9 percent are "asset poor," meaning they have little to no financial cushion to rely on if unemployment or another emergency leads to a loss of income.
The report ranked Nevada last in the country overall for how residents fare in achieving financial security across 53 measures in five issue areas.
"Although there are signs of improvement in Nevada's economy, with unemployment edging downward in recent months, this year's (study) paints a picture of a state that is struggling to achieve economic opportunity for all residents," said Jennifer Brooks, director of state and local policy for the Washington, D.C.--based CFED.
The nonprofit said that "asset poverty," the scorecard's signature measure, is a conservative estimate of financial security since it includes all assets, including home ownership, that would be liquidated to pay for day-to-day expenses.
A more realistic measure of resources available to a family is "liquid asset poverty," which excludes assets such as a car that are not easily converted to cash.
The liquid asset poverty rate is 62.5 percent for Nevada residents, the report said.
Nevada earned an "F" for financial assets and income with a high bankruptcy rate (ranking 51st ) and a high number of unbanked households (ranking 51st ).
The report said Nevada earned a "D" in businesses and jobs and housing and homeownership. The Silver State received an "F" in health care with a high-uninsured rate (49th ) and uninsured low-income children (51st ).
Nevada places in the bottom five states for 17 out of 53 outcome measures and ranks last in seven measures, including underbanked households, bankruptcy rate, unemployment, delinquent mortgages and uninsured low-income children.
Also, 68 percent of Nevada consumers have subprime credit scores - the worst in the nation.
One bright spot is education, where Nevada places fifth nationally in average college graduate debt, graduating with $6,646 less in debt that the average U.S. graduate. The average amount of loan debt carried by students in the U.S. increased by $552.98 in 2012 to $26,600.
"Our (counselors) provide assistance daily to Nevadans considering bankruptcy or seeking other options after falling into the payday or title loan debt spiral, unable to meet their monthly living expenses," said Michele Johnson, president and CEO of Financial Guidance Center in Las Vegas. She said Nevada's housing crisis, compounded by the national economic downturn, "exacerbated the already tenuous financial stability situation of many Nevadans." She also said a "concerted effort by all stakeholders" is necessary to reverse the current trends.
In its report, CFED offers several suggestions to help Nevada combat the problem, including maximizing income for low-wage workers by adopting state tax credits for working families and prohibiting or capping interest rates on payday and car-title loans.
The CFED also calls on Nevada to continue providing access to mediation programs and regulate mortgage servicers in an effort to reduce foreclosures and delinquent mortgages.
The best states in the overall ranking were Vermont, New Hampshire and North Dakota. Joining Nevada in the bottom three was Georgia and Mississippi.
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