The ABC Data Exchange

Financial Assets and Income

The reality is that many families in our community are living paycheck to paycheck.

When a family is teetering on the edge of financial stability, even a small disruption in income, like getting sick or missing a shift, can force difficult choices about what to do with limited resources.

The measures contained in this page shine a light on different conditions that are relevant to a family’s or an individual’s fiancial stability. It is important that we look critically at this data to understand the patterns that are present across and among measures. Such patterns might include disparities by race/ethnicity, gender, and/or age; improving or worsening conditions over time; or significant difference among peer communitites. An understanding of these patterns equips us to work together to identify, explore, and address the underlying systemic inequities that are impacting our community.

Literature Review Highlights

 

Assets may raise a family’s income through the following channels: [1]

  1. Assets such as stocks bring passive investment income;
  2. Physical assets can allow people to pay less for services (people with cars do not have to pay for taxi / Uber);
  3. Help extend job search (having a car) or invest in human capital such as education;
    1. Car ownership increases employment and hours worked. [2]
  4. Functions as an insurance stock that allows job seekers to take more risks in the job market or relocate.

Asset poverty may negatively impact a family’s income through higher financial stress, which relates to increased absenteeism at work. [3]

Literature Review References

[1] Lerman, R. I., & McKernan, S. M. (2008). The effects of holding assets on social and economic outcomes of families: A review of theory and evidence. The Urban Institute, November.

[2] Raphael, S., & Rice, L. (2002). Car ownership, employment, and earnings. Journal of Urban Economics, 52(1), 109-130.

[3] Kim, J., Sorhaindo, B., & Garman, E. T. (2006). Relationship between financial stress and workplace absenteeism of credit counseling clients. Journal of Family and Economic Issues, 27(3), 458-478.

Major Finding

Across all measures, there are major disparities by race/ethnicity with African American and Hispanic/Latino residents having disproportionately negative outcomes compared to White residents.

Asset Poverty

Asset Poverty is a condition in which an individual or family lacks the savings to cover basic expenses (at federal poverty level) for three months if their income is interrupted. Liquid Asset Poverty is a similar measure, in which the household lacks the savings to cover basic expenses at the federal poverty level for three months, but only considers assets that are more readily accessible and does not include wealth-building vehicles like house and business assets. View data notes for this measure.

Data Visualization

Asset Poverty and Liquid Asset Poverty (2018)

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Key Takeaways

About 28% of all Forsyth County residents were experiencing asset poverty. Almost 40% were experiencing liquid asset poverty.
Major disparities were present by race/ethnicity.

Black and Hispanic/Latino residents had more than double the rate of living in asset poverty compared to White residents, 46% of Black and Hispanic/Latino residents compared to 19% of White residents.

Zero Net Worth

A person’s net worth is the sum of all of their assets (things like cash, savings, an automobile, or a home, for example) minus the combined value of their liabilities (also known as debts). A person with a negative or zero net worth lacks the assets to cover their liabilities and is left in a financially vulnerable situation. View data notes for this measure.

Data Visualization

Zero Net Worth (2018)

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Key Takeaways

Nearly 1 in 5 Forsyth County residents fell into the zero net worth category.

Expanded text to go here, TBD.

Forsyth County had a higher rate of residents with zero net worth than North Carolina and the United States.

19% of Forsyth County residents lived in households with zero net worth compared to 15% in North Carolina dn 16% in the United States.

Major disparities were present by race/ethnicity.

More than double Black and Hispanic/Latino residents live in households with zero net worth, 31% and 28%, respectively, compared to White residents, at 13%.

Median Employment Income

Access to adequate financial resources is necessary for economic self-sufficiency. Median income of working adults is an indicator of the financial resources available to middle-income households in our community. Median income of working adults refers to the specific income level that is below the highest-earning 50% of working adults and above the lowest-earning 50% of working adults. Because income is closely tied to poverty, the Census Bureau and other studies use household income to determine poverty status [1,2]. View data notes for this measure.

Data Visualization

Median Income (2019)

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Key Takeaways

Median income has remained the same over the last 10 years.
Middle aged adults, 35-64 years old have the highest median income.

In 2019, working adults aged 35-64 had a median income of around $40,000 compared to around $25,000 for working adults 18-34 and $15,000 for working adults 65 and over.

Disparities were present in median income by race/ethnicity.

White working adults had a median income of around $39,000 compared to around $29,000 for Black working adults and around $21,000 for Hispanic/Latino working adults in 2019.

Disparities were present in median income by sex.

In 2019, male working adults had a median income of around $39,000 compared to around $30,000 for female working adults.

Disparities are present in median income by educational attainment.

Working adults who had a Bachelor’s degree or more than a Bachelor’s degree had median incomes of around $51,000 and $66,000, respectively, compared to around $28,000 for working adults with a high school diploma or less.

Income Insufficiency

Income insufficiency is a measure of financial hardship that compares family income to estimated family expenses. While poverty rates are widely used as a measure of financial hardship, there is some evidence that poverty rates rely on outdated assumptions, which can lead to underestimated family expenses and financial hardship [1]. The income insufficiency measure supplements analysis of financial hardship based on poverty rates; it accounts for factors not considered in poverty calculations. View data notes for this measure.

Data Visualization

Income Insufficiency (2018)

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Key Takeaways

There has been relatively little change in overall income insufficiency rates over time.

Between the years 2009 and 2018, there has not been large changes in the percent of residents living in household experiencing income insufficiency.

Among age groups, younger residents (under 25 years old) are most likely to live in households without sufficient income.

Children under 18 years and young adults ages 18-24 in 2018 were the most likely to be living in households with insufficient incomes at 46% and 52%, respectively. Residents who were 45 to 64 years old were the least likely to live in households with insufficient income at 23% in 2018.

Females are slightly more likely to have insufficient income than males.

In 2018, 37% of females lived in households that did not have sufficient income compared to 32% of males.

There are significant disparities by race/ethnicity.

The percentage of Black and Hispanic/Latino residents living in households experiencing income insufficiency was more than double White residents in 2018, at 50%, 62%, and 22% respectively.

Poverty

In practical terms, poverty indicates insufficient financial resources to pay for basic needs such as food, housing, and health care [1,2]. It is important to note that while poverty rates are widely used as a measure of financial hardship, there is some evidence that poverty rates rely on outdated assumptions, which can lead to underestimated family expenses and financial hardship [3]. For an alternative measure to poverty, see the income insufficiency measure above. View data notes for this measure.

Data Visualization

Poverty (2019)

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Key Takeaways

Poverty rates peaked in Forsyth County in 2014 and have decreased by 6% since then.

Expanded text to go here, TBD.

Poverty rates were highest for children and young adults.

Children under 18 and adults 18-34 were the most likely to live in poverty in 2019, at about 19% and 17% , respectively. The group least likely to live in poverty is adults 65 years and older at 6%.

There were major disparities in poverty rates by race/ethnicity.

Black and Hispanic/Latino residents had more than double the rate of experiencing poverty compared to White residents; about 24% for Black and Hispanic/Latino residents, compared to about 6% for White residents.

Residents with a high school diploma or less were more likely to live in poverty.

In 2019, about 19% of residents with a high school diploma or less were living in poverty, compared to less than 9% for all other groups.

Adult females were more likely to live in poverty than adult males.

In 2019, about 16% of adult females were living in poverty compared to about 9% of adult males.

Household Banking Status

The unbanked are described by the Federal Deposit Insurance Corporation (FDIC) as those adults without an account at a bank or other financial institution and are considered to be outside the mainstream for one reason or another. The Federal Reserve estimated there are 55 million unbanked or underbanked adult Americans in 2018, which account for 22 percent of U.S. households.

The majority of the unbanked and underbanked are American-born while a growing number are immigrants where the two groups have low income as a commonality and lack the minimum balance to open checking and savings accounts [1]. According to Congressman Rubén Hinojosa, half of the unbanked had a bank account previously but are choosing to not have an account and opting to use the services of check cashers and payday lenders instead. Research has shown that immigrants who have experienced a banking crisis in their countries of origin are significantly less likely to have bank accounts in the U.S., [2] and researchers also found that lower rates of financial market participation tend to persist even for immigrants who have lived in the U.S. for several years [3]. Attributes that contribute to these decisions, however, vary for each racial/ethnic group. View data notes for this measure.

Data Visualization

Unbanked and Underbanked Households (2017)

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Key Takeaways

Over 8% of the overall Forsyth County population is unbanked and 19% underbanked.
There were major disparities in rates of unbanked and underbanked households by race/ethnicity.

Black residents were unbanked at six times the rate and Hispanic/Latino residents eight times the rate compared to White residents, at 17%, 24%, and 3%, respectively. The disparities are not quite as large for underbanked status with 30% of Black residents, 24% of Hispanic/Latino residents, and 14% of White residents being underbanked.