Almost Half of Texas Lacks Savings to Cover Job Loss, Medical Emergency
Another national report card is out, and Texas households are still struggling to beef up their savings.
Almost half of Texas households don’t have enough savings to pay for basic expenses for three months, which means most families aren’t prepared in the event of a job loss or health emergency.
According to the Corporation for Enterprise Development’s 2014 Assets and Opportunity Scorecard, the state’s policies are also not helping residents achieve financial security.
"We’ve got to do a much better job of removing the barriers for individuals to save," says Don Baylor, Jr., a senior policy analyst with the Center for Public Policy Priorities, a partner in the research behind the report. Baylor says one way state policymakers could help Texans would be to remove the cap on how much a person can save while applying for food stamps.
"Another thing that we've got to do statewide is to reform payday and auto lending," Baylor says. "This certainly eats away at financial stability and security as well as savings. So that’s another state policy move that the state can undertake. And at the same time we've got to provide incentives, whether it's paying for college, for families to get saving."
Chuck DeVore, vice president for policy at the conservative Texas Public Policy Foundation, believes analysts should be looking at consumption in Texas and across the U.S., which shows the financial picture isn’t all bleak.
"It’s true that when the poor make more money they tend to immediately put those earnings into consumption," DeVore says. "Whereas if you’re better off, there are practical limits to how much you can actually consume. So if you look at food and shelter and medical care and clothing and education, what you see is a story of constant improvements in America among the working poor with regards to what it is they’re actually consuming."
Still, Texas struggled in the rankings by the Corporation for Enterprise Development. The state scored among the lower half of all states in most categories, including health care, business, education and income. The state scored well, however, on housing and home ownership.