LANSING, Mich. (WOOD) — Tuesday marks 50 years since the race riot erupted in Grand Rapids, and a new report shows there’s still a startling gap between the financial health of Michigan’s white households and their minority counterparts.
The report released Tuesday by Prosperity Now concludes that if they lost their source of income, approximately 38.2 percent of Michigan households wouldn’t have enough liquid assets (i.e., cash) to even live at the poverty level for three months. If you factor in other assets, that number dropped down to 29.2 percent of Michigan households that wouldn’t make it for three months.
When broken down by race, the number of minority households that couldn’t make it for three months without a consistent income was about double that of white households.
The report also concluded about one out of three Michigan households are in dire financial need, with 26 percent of Michigan households struggling to cover basic needs, making it nearly impossible to save.
“To put those numbers in perspective, for a single person, that’s about $3,000 in savings,” said Michigan Economic Impact Coalition program director Ross Yednock. “For a family of four, it’s $6,000 in savings.”
The Michigan Economic Impact Coalition tells our Lansing sister station WLNS that more than one-third of Michigan families are living paycheck-to-paycheck, and they are just one emergency away from a financial crisis.
“We’re not talking again living high on the hog,” said Yednock. “We’re talking just getting by and these families, you know are right on that brink.”
The report also showed the median net worth of white households in Michigan is $91,030, compared to $4,338 for households of color. When that number was further broken down, the average net worth of black households was $2,780.
However, the agency cautioned net worth and household poverty level numbers came from the U.S. Census Bureau’s Survey of Income and Program Participation, which had a relatively small sample size, likely leading to more imprecise data.
“As such, an estimate of household wealth may not accurately represent the true wealth that households in that state or population hold,” the organization stated on its website.
The national nonpartisan group defined net worth as the total number of assets for anyone age 15 or older in a household, with liabilities like debts, bills and loans subtracted.
Michigan ranks 27th in the country for its overall financial security.
Our state ranked 40th for its personal bankruptcy filing rate, which was about 3 out of every 1,000 people. Roughly one out of every four households had zero or negative net worth, according to the report.
But there is a silver lining to the report: Michigan fared better than the national average in number of residents who had savings accounts and paid their credit card bills on time.
- Six percent of Michigan households don’t have a bank account.
- Almost 42 percent of Michigan households have no money saved.
- Although the employment rate is higher, one in four Michigan workers are earning poverty wages.
The report recommends Michigan supports policies that focus on long-term prosperity programs; researchers also suggested spending more in temporary assistance and micro-business services. Prosperity Now says those solutions can help more people not only get by, but actually get ahead.
Prosperity Now says it collected its data for the report between December 2016 and April 2017, with most of the numbers generated between 2013 and 2016.
The national nonprofit based in Washington, D.C. said the numbers it crunched primarily came from public sources, including the U.S. Census Bureau and Bureau of Labor Statistics, but some numbers were also gleaned from private sources like the Mortgage Bankers Association.
—-Online:Prosperity Now report on Michigan