Recession May Be Past, But Underemployment and Low-Wage Jobs Still Define Landscape in Indiana

Indiana Ranks 30th Overall in Financial Security of Residents;
Households of Color Face Huge Uphill Climb


WASHINGTON, D.C. – Even though the national unemployment rate has dropped to five percent in recent months, the underemployment rate in Indiana remains stubbornly high with only negligible improvement in the number of state residents stuck in low-wage jobs, according to a new report from the Corporation for Enterprise Development (CFED).

Indeed, 43% of Indiana’s households are locked into a “new normal” of perpetual financial insecurity, unable to build the savings needed to last even three months in the event of an emergency. The research, reflected in CFED’s 2016 Assets & Opportunity Scorecard, also found that state policies are doing little to improve Hoosiers’ financial security.

The situation is most dire for households of color. African-American and Latino households in Indiana are significantly more likely to live below the federal poverty line compared to white households. Even more startling, new data show that businesses owned by whites in Indiana are valued more than five times higher than businesses owned by African-American residents.

“Indiana needs more economy boosting jobs that help working families reach financial security by providing wages that ensure they can meet more than their basic needs,” said Kelsey Clayton, Indiana Assets & Opportunity Network Manager.

Published annually, the Assets & Opportunity Scorecard offers the most comprehensive look available at Americans’ ability to save and build wealth, stay out of poverty and create a more prosperous future. This year’s Scorecard assesses all 50 states and the District of Columbia on 61 outcome measures spanning five issue areas: Financial Assets & Income, Businesses & Jobs, Housing & Homeownership, Health Care and Education. It also ranks the states on 69 policies that promote financial security. When it comes to outcomes, Vermont ranks at the top of the country overall, while Mississippi ranks last.

Indiana received a “C” in all five outcome categories and ranked 30th overall (up from 34th last year). A high bankruptcy rate, (4.4 per 1,000 people; ranked 46th), contributed to a “C” in Financial Assets & Income. The state’s low microenterprise ownership rate (13.8%) led to its “C” grade and 32nd-place ranking in Businesses & Jobs. The Hoosier State had its highest ranking in Housing & Homeownership (23rd), but nonetheless ranked 45th in the percentage of mortgage loans considered to be high cost (9.6%). Finally, the state’s low educational attainment (ranking 42nd and 43rd, respectively) in two- and four-year college degrees, as well as its high percentage of residents defaulting on their student loans (14.8%) led to Indiana’s 31st-place finish in Education.

The Scorecard also evaluates 69 different policy measures to determine how well states are addressing the challenges facing their residents. Having adopted less than a third of the policies assessed available to the state, Indiana is among the bottom half of states in overall policy adoption (ranked 37th) and is among the lower half of states in three of five policy areas, including Businesses & Jobs (where it passed none of the assessed policies and ranked 46th), Housing & Homeownership (41st), and Education (31st). The state fared slightly better in Financial Assets & Income and Health Care, receiving a ranking of 20th in both areas.

Across the nation, the Scorecard found scant evidence that federal and state governments were willing to embrace policies that would open new doors to greater financial security for those struggling the most in the American economy. Without such commitments, most low-income individuals—particularly people of color—find themselves falling farther behind.
 

Among the key findings from this year’s Scorecard:

  • Homeownership rates remain at historic lows, falling to 63.1% for the eighth consecutive year of decline and contributing to crowding and rising costs in the rental market.
  • Fully 14.3% of adults say there was a time in the past year that they needed to see a doctor but could not because of cost. The statistics are worse for individuals of color with one in four Latino adults and one in five African-American adults saying money concerns prevented them from seeing a doctor.
  • Although both high school graduation rates (82.3%) and four-year college degree attainment (30.1%) increased from 2013 to 2014, racial disparities remain severe. Less than 20% of African-American adults and fewer than 15% of Latino adults hold four-year degrees.
  • While the national unemployment rate has dropped to 5%, the underemployment rate is twice as high, at 10.8%. What’s more, one-in-four jobs is in a low-wage occupation.
  • Building up even a small amount of savings is a challenge for almost half the country. Some 44% of households are “liquid asset poor,” meaning they have less than three months of savings to live at the poverty level if they suffer an income loss.
  • Business ownership among both men and women (21.4% and 17.1% of the labor force, respectively) declined from 2007 to 2012, even as average business value for both groups increased. Yet female-owned businesses still are worth only a third the value of the average male-owned business—$239,486 to $726,141, respectively.

“There certainly are positive signs that the nation’s economy is improving,” noted Andrea Levere, President of CFED. “But there also is very compelling evidence that many households are stuck in a financial hole and are struggling to dig themselves out. State governments can play a critical role in helping them move on to firmer ground and a more prosperous future.”

To read an analysis of key findings from the 2016 Assets & Opportunity Scorecard, click here. To access the complete Scorecard, visit http://scorecard.cfed.org.

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CFED's work makes it possible for millions of people to achieve financial security and contribute to an opportunity economy. We scale innovative practical solutions that empower low- and moderate-income people to build wealth. We drive responsive policy change at all levels of government. We support the efforts of community leaders across the country to advance economic opportunity for all. Established in 1979 as the Corporation for Enterprise Development, CFED works nationally and internationally through its offices in Washington, DC; Durham, North Carolina, and San Francisco, California.

To improve policies and programs that promote financial security and opportunity, CFED is the backbone organization for a national Assets & Opportunity Network, which is comprised of nearly 2,000 advocates, service providers, researchers, financial institutions and others representing all 50 states and DC. To learn more about the Assets & Opportunity Network and to join, visit http://assetsandopportunity.org/network.