South Carolinians rank low on economic security, report says
Jan 25, 2016
Too many South Carolina families remain economically vulnerable, with low-wage jobs and crippling health care costs disproportionately burdening families of color, a new report says.
South Carolina placed 45th among the states and the District of Columbia in a ranking of economic opportunity and security by the Washington-based nonprofit Corporation for Enterprise Development. The scorecard is based on factors such as financial assets and income, education, health care, businesses, jobs and homeownership.
Vermont topped the list as the state with the most financially secure residents, while Mississippi came in last.
“We’re not just talking low income, but low to moderate, people who are living paycheck to paycheck,” Jeremie Greer, the group’s vice president of policy and research, said in an interview.
The report finds that 47 percent of South Carolina households live in liquid asset poverty, which means they don’t have three months of savings set aside to cover basic expenses and stay above the poverty level.
“In South Carolina, which is above the national average (44 percent), what we found is that there’s a huge disparity for households of color,” Greer said. “In these, 68 percent are liquid asset poor.”
This is partly due to the prevalence of low-wage jobs in the state. South Carolina is one of just nine states where more than 1 in 3 jobs are considered low wage.
Those who once enjoyed a modicum of financial stability have settled into a “new normal” of ongoing financial vulnerability, while the struggles of those who were financially insecure before the recession have only deepened. CFED 2016 Assets and Opportunity Report
One of the main roadblocks to financial stability is the cost of health care, which keeps many South Carolina families stuck in a cycle of debt and insecurity. The report found that 18 percent of adults in South Carolina could not see doctors due to cost, and it gave the state low marks for not expanding Medicaid under the Affordable Care Act.
“Health insurance is really the driver in which people keep their health care costs under control. We know that the lower down the income scale you are the less likely you are to have the kind of job that has it,” Greer said.
“Expanding Medicaid is the step states like South Carolina can take to help these families manage health care costs,” he said.
South Carolina residents whose income falls below 138 percent of the federal poverty level – about $16,000 a year for a single adult or about $33,500 for a family of four – would qualify for Medicaid if the state participated in the expansion.
South Carolina Republican Gov. Nikki Haley and other conservative lawmakers have opposed the expansion, saying the system is broken and too costly.
With this month’s addition of Louisiana, 31 states and the District of Columbia have expanded their Medicaid programs under the Affordable Care Act.
2.1 Times more likely that households of color live below the federal poverty level
Among the Palmetto State’s poor letter grades in the scorecard – an F in education, an F in businesses and jobs, a D in financial assets and income, a C in health care – South Carolina did better in homeownership, with a B. The state ranked 13th out of the 50 states and the District of Columbia for its rate of residents who are homeowners, and it placed high for homeownership by gender and income. But this silver lining can be a bit of an illusion, the report’s authors say.
“While homeownership is high in South Carolina, the cost burden is increasing,” Greer said. A “cost-burdened household” is any whose residents spend more than 30 percent of their income on housing – which is 30 percent of homeowners and 52 percent of renters in the state.
“Even in South Carolina, you’re one emergency away from losing that home. If you get sick, can’t go to work, miss a few mortgage payments, people are really in a tenuous place,” Greer said.
34% Jobs in South Carolina that are low-wage
One of the main recommendations in the report is implementing a state-level earned income tax credit.
“This would really affect South Carolina. It’s the most proven anti-poverty program available,” Greer said. “States like Maryland and Louisiana who have done this have been effective in helping families when unexpected shocks hit.”
The low scorecard ranking could present an opportunity for change at the state level, said Kate Pratt, vice president of operations at the South Carolina Association of Community Development Corporations, an association for local economic-development organizations.
In addition to a state earned income tax credit, more funding for micro-enterprise loans and providing state funding for individual development accounts – which match the savings of low-income individuals with funds to purchase their first homes, go back to school or start small businesses – would go a long way, Pratt said.
“If the state would enact even one of these, we believe there would be an improvement in at least one area of the scorecard,” she said.