Report: Poverty Looms for Millions of Middle Class Texans
A scary new report indicates the fragility of the middle class lifestyle that most Texans enjoy, 1200 WOAI news reports.
A report from the Corporation for Enterprise Development says follow half of all Texas households are 'one crisis' away from significant poverty and even homelessness, with a dangerously higher percentage of Texas middle class families listed as 'liquid-asset poor,' or without any appreciable savings in the bank.
"What that means is a loss of a job or an unfortunate health event could really knock many hundreds of thousands of Texas households into poverty," said Tim Morstad, who is with the AARP in Texas and helped gather the information for the study.
'Liquid assets' are assets which can be easily obtained in case of an emergency, and generally does not include home equity or money in a pension plan.
The report shows families of four making as much as $90,000 a year, that is two adults with successful middle class professions, are still considered 'financially insecure' due to a lack of liquid assets.'
Also contributing to the state's financial insecurity is the fact that Texas has one of the highest percentage of low wage jobs in the country, at 27.8%.
Conservative groups point out that with the unemployment level reaching full employment in places like San Antonio, Texas can offer people in financial trouble the one thing they need to pull themselves out...a job. They also point out that national surveys don't take into consideration Texas' significantly lower cost of living.
But Morstad says the real problem may be yet to come, when this huge group of Middle Class Texans seeks to retire.
"There are fewer and fewer pensions that previous generations counted on, there are fewer and fewer matching 401k's," he said. "Fewer and fewer Texas private savings over the decades mean that more of us are going to be dependent on programs which are under their own financial stress," like Social Security.
Morstad says the key is to create a 'culture of savings' in Texas, including classes in school on the importance of paying down debt and investing for the future.'