Another 81 million Americans one step from poverty
What does it mean to be poor?
If it means living at or below the poverty line, then 15 percent of Americans — some 46 million people — qualify.
But if it means living with hardly any savings — so that one piece of bad luck, one major financial blow, could land you in serious, lasting trouble — then it’s a much larger number. In fact, it’s almost half the country.
“The resources that people have — they are using up those resources,” said Jennifer Brooks, director of state and local policy at the. “They’re living off their savings. They’re at the end of their rope.”
According to a report by The Corporation for Enterprise Development, a Washington, D.C., 43 percent of households in America — some 127.5 million people — are liquid-asset poor. If one of these households experiences a sudden loss of income, caused, for example, by a layoff or a medical emergency, it will fall below the poverty line within three months. People in these households simply don’t have enough cash to make it for very long in a crisis.
A family that loses its job, that was maybe solidly middle class, in a state where they have restrictive asset tests, is going to have to liquidate all their assets, all their savings for the future in order to qualify for benefits.
The Corporation for Enterprise Development findings echo other recent studies showing that many Americans are ill-prepared for financial emergencies. Analysts said the reasons include flat wages, the high cost of medical treatment and the nationwide drop in housing values leaving homeowners with less wealth than they believed they had.
So another 81 million Americans (i.e. 127.5 million who are liquid-asset poor minus the 46 million already below the poverty line) could be just one step away from dipping below the poverty line!
[Read Huffington Post article]