The Shriver Brief : Poverty Law Commentary & Insights : Sargent Shriver National Center on Poverty Law : Affordable Housing, Healthcare Reform

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The results are in: poverty is on the rise in America. Over 46 million Americans, 15% of the country’s population, are income poor. This number has grown from 1 in 5 in 2009 to 1 in 4 today. And this is actually an underestimate of the U.S. poverty level since the Census Bureau’s current method for calculating poverty is outdated. In fact, the Census Bureau recently announced a new supplemental poverty measure to help update the way it calculates poverty.

While income poverty is important, it refers only to a person’s cash flow. Asset poverty, on the other hand, focuses on net worth. Individuals who cannot get by for three months if all of their outside sources of income cease are considered asset poor. Asset poverty is, therefore, is more important than income poverty, since income poverty examines only whether people have enough to get by, whereas asset poverty examines whether they have enough to get ahead. 

This week, the Corporation for Enterprise Development (CFED) released the 2012 Assets & Opportunity Scorecard, which highlights the growing asset poverty trend. According to this report, 43%, or 127.5 million people, are asset poor. The Scorecard focuses on five areas and provides an overall ranking and grade per subject area for each state, as well as policy solutions for states to implement to improve their scores. As CFED’s State Asset Network partner for Illinois, the Shriver Center contributed data for this report.

Based on this data, Illinois ranks 32^nd in the nation with almost 13% of its population experiencing income poverty and over 26% experiencing assert poverty.

Financial Assets and Income
Illinois scored a C and ranked 29^th in the nation in terms of assets and income. The most dramatic figure ranks Illinois 42^nd in the country for bankruptcy; 6.3 per 1,000 residents have filed for bankruptcy, compared to the national average of 5.

Businesses and Jobs
Illinois also scored a C and ranked 31^st in the nation in the area of business and jobs. While the national unemployment rate is 9.6%, in Illinois it is 10.2%, ranking the state 36^th in the country. Similarly, the national underemployment rate is 16.7% versus 17.5% in Illinois, ranking it 40^th. These numbers depict the continuing struggle of those looking for work and lingering unemployment.

Housing and Homeownership
Illinois scored a D for housing and homeownership, ranking it 44^th in the nation. The state’s foreclosure rate is 7.29%, 48^th in the nation, meaning that 1 in every 498 households are in foreclosure. Forty percent of residents are also financially overburdened by their homeownership costs and another 52% are overburdened by rental costs.

Health Care
Illinois scored a C in health care and ranked 26^th in the nation. Although health care reform will provide health care coverage for more Americans, currently the poorest 20% of Illinois residents are 13.6 times more likely to be uninsured, and people of color are 2.3 times more likely to be uninsured than the rest of the nation.

Racial Wealth Gap
Nationally there has been a dramatic increase in the racial wealth gap. While 20% of white families are asset poor, over 44% of households of color in America are asset poor. In Illinois, people of color are 2.6 times more likely to be asset poor.  

Asset Building Policy Solutions
The recession may be over, but families are still reeling from the aftermath and struggling to get ahead. The U.S. income poverty level is the highest it has been in the 52 years that poverty data has been collected. It is imperative that states and the federal government begin addressing these overwhelming figures. By implementing asset building strategies, the nation will create opportunities for families to both move out of poverty and become economically upwardly mobile. The Shriver Center and its Assets Opportunity Unit will continue its efforts to ensure that these issues receive the attention that they deserve. 

For more information about the Shriver Center and its work on alleviating poverty visit Shriver’s Website and subscribe to our asset building newsletter, or follow us on Twitter and Facebook.

For a complete look at all 50 states and their scores, see the full CFED Asset and Opportunity Scorecard.