A Washington, D.C. nonprofit studying economic opportunity released a report Thursday that contains devastating news about Texas. A full 49.8 percent of Texas households lack savings to pay for three months of basic expenses. That means they are one crisis, such as a job loss, away from poverty. This is what the nonprofit, the Corporation for Enterprise Development, calls "liquid-asset poverty."
"Despite steady job growth and low unemployment rates, many Texas residents are still struggling with persistent financial insecurity and have difficulty moving up the economic ladder," said Tim Morstad, manager of advocacy and outreach for AARP Texas.
Texas is 30th in the country for liquid-asset poverty. Texas 48.8 percent liquid asset household rate is 6.5 points above the national average.
What did you say about Texas' miracle economy, Rick Perry? More below the jump.
|The great lie about Texas' economy is about job growth. Texas ranks 42nd in the country with 27.8 percent of its jobs paying a low wage. There's another interesting point in the report: Texas' middle class isn't so "middle class".
"A majority of Texans who live below the federal poverty line of $23,550 for a family of four are considered financially insecure, as are nearly a third of households earning between $54,049 and $90,468 a year," the Texas Tribune explains.
That emboldened category is the middle-class. "Fully 32 percent of households earning $54,049-$90,468 annually have less than three months of savings," the report said.
One out of three "middle-class" households are a crisis away from poverty, hardly speaking to a strong Texas economy. Texans also have far worse credit than the rest of the nation. Sixty-five percent of Texas have subprime credit, almost ten percentage points higher than the national average of 56.3 percent.
The median net worth of Texans is $53,452 -- $17,000 less than the $70,359 national average. "Over half of the clients that I meet with are 'liquid asset poor,' and they don't fall into the official income poverty level," said a community development coordinator at City Credit Union in north Texas. "When I tell an individual or a family that they need to have three times their monthly salary in a liquid emergency fund, their faces drop."
Laura Ewing, president of the Texas Council on Economic Education said there are many Texas homes "in which kids are not learning financial literacy in the home because the parents don't understand it. Because they don't understand it themselves, they're not modeling concrete, secure, safe financial decision-making."