Asset Poverty

Most of us are accustomed to thinking about poverty in income terms. There is another way to think about the problem--this is "asset poverty."

According to a report by the Corporation for Enterprise Development (CfED), we need to give more attention to the importance of assets as a measure of poverty. The report says "Assets matter. Assets mean economic security. Assets mean mobility. Assets mean opportunity."

Here are a couple major findings from the CfED report:

1. In all states, except New Mexico, the asset poverty rate is higher than the income poverty rate.

2. Iowa has the lowest level of asset poverty—reporting a rate of 14%—but in 32 other states, asset poverty rates exceed 20% of their total populations. In New York, where asset poverty is the highest, it is estimated that almost one third of New Yorkers do not have sufficient net worth to live for more than three months at the federal poverty level without other support.

What are some variables used to measure asset poverty? They include:

* Home ownership.
* Educational attainment.
* Bank assets.
* Credit worthiness.
* Insurance/asset protection.
* Personal net worth

This is a meaningful concept that deserves our attention. Economic development strategies should work to raise the "asset wealth" of people and businesses. It's not enough to simply work on increasing wages or attracting higher-paying jobs. Economic developers should be coupling our existing income generation strategies with asset creation.

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