Thanks to Tom Shapiro for the report.
With Demos, the Institute on Assets and Social Policy released a report on the state of the African-American and Latino middle class and its ability to achieve the American Dream. This landmark study is based on the new “Middle Class Security Index”. Major findings demonstrate that three out of four African-American and four out of five Latino middle class families are either borderline or at high risk of falling out of the middle class altogether. (Download the full report at http://iasp.brandeis.edu/pdfs/byathreadlatino.pdf )
Economic (In)Security: The Experience of the African-American and Latino Middle Classes is the first comprehensive report to measure economic stability of American middle class households of color. Based on national data, Economic (In)Security is the second in a series of reports and briefing papers that utilize the new “Middle Class Security Index” developed by IASP/Brandeis and the non-partisan policy center Demos.
This Index measures the financial security of the middle class by rating household stability across five core economic factors: assets, educational achievement, housing costs, budget, and health care. Based on how a family ranked in each of these factors, they were defined as financially “secure,” “borderline,” or “at risk”.
The Middle Class Security Index shows worrying trends in African-American and Latino households:
African-American and Latino families have more difficulty moving into the middle class, and families that do enter the middle class are less secure and at higher risk than the middle class as a whole.
Only 26 percent of African-American middle-class families have the combination of assets, education, sufficient income, and health insurance to ensure middle-class financial security. One in three (33 percent) are at high risk of falling out of the middle class.
Fewer than one in five Latino families (18 percent) are securely in the middle class. More than twice as many Latino families (41 percent) are in danger of slipping out of the middle class.
African-American middle-class families are less secure and at greater risk than the middle class as a whole on four of the five indicators of security and vulnerability. Latino middle-class families are less secure and at greater risk on all five indicators.
The report also shows that assets and housing costs are among the key destabilizing factors Latino and African-American families face:
Only 2 percent of African-American, and 8 percent of middle-class Latino families have enough net financial assets to meet three-quarters of their essential living expenses for nine months if their source of income disappeared.
About 95 percent of African-American, and 87 percent of Latino middle-class families do not have enough net assets to meet three-quarters of their essential living expenses for even three months if their source of income were to disappear.
Only 26 percent of African-American, and 37 percent of Latino middle-class families spend less than 20 percent of their after-tax income on housing - both are below the national average of 40 percent.
The Economic (In)Security report recommends a set of policies that will help open access to, and strengthen, America's middle class. These policies cover a range of important issues affecting American households, including asset building and debt reduction, making higher education more accessible and affordable, and addressing the health care crisis.
I hope you find this report of interest. Please follow the link below to download the report.
Director, Institute on Assets and Social Policy
The Heller School for Social Policy and Management