Washington, D.C. – Despite lower unemployment, a booming stock market and a modest decline in the poverty rate, there is growing evidence that positive economic gains at the national level are not widely shared by low- and moderate-income families in Mississippi, according to a new report from Prosperity Now (formerly CFED). Policymakers are not doing enough to address this imbalance, and future prosperity for Mississippi families is at risk. 

The 2018 Prosperity Now Scorecard found that unemployment in Mississippi is at its lowest rate in more than a decade, and average annual pay for workers has increased slightly in the last year. Despite these gains, however, income inequality increased in Mississippi last year; the richest 20% of households now earn 5.5 times more than the poorest 20%.

Published annually, the Prosperity Now Scorecard (formerly the Assets & Opportunity Scorecard) offers the most comprehensive look available at Americans’ ability to save and build wealth, stay out of poverty and create a more prosperous future. This year’s Scorecard assesses all 50 states and the District of Columbia on 62 outcome measures spanning five issue areas: Financial Assets & Income, Businesses & Jobs, Homeownership & Housing, Health Care and Education.

Mississippi ranks 51st  in the Scorecard on its outcomes for the seventh year in a row. The Scorecard grades states on their progress in the five key outcome areas. The state earned an “F” in four of five areas, but earned a “B” in Homeownership & Housing, up from last year’s “C”. The Magnolia State also ranked 8th in the nation for having affordable homes (the median home value only being 2.7 times higher than the median income). The addition of new credit measures highlighted some areas where Mississippi can further improve: namely, Mississippi had the highest percentage of severely delinquent borrowers on total debt (22.1%) and the highest rate of credit card borrowers using over 75% of their credit card limit (35.0%). Additionally, 24.4% of Mississippians with debt have student loans, with a median debt burden of $16,630, and nearly one in four (23.2%) of those student loan borrowers have severely delinquent loans.

While the Scorecard’s findings are troubling for all Mississippi households, evidence of ongoing racial disparities in nearly every issue area for which data are available make the Scorecard’s findings especially alarming for Mississippians of color. Households of color in Mississippi are 1.5 times as

likely to live paycheck-to-paycheck than White households in the state, leaving them one crisis away from financial catastrophe. And, the challenges facing households of color in their quest to save play out in their overall net worth. Whereas 14.1% of White households in the state have zero or negative net worth, meaning they owe more than they own, that number skyrockets to 21.3% of Black households in Mississippi.

“Our research shows that there are troubling signs beneath the economic surface,” said Andrea Levere, president of Prosperity Now. “Income inequality continues to worsen. Affordable housing is harder to find. Most disturbingly, racial disparities persist. And none of these problems are improved when our federal government chooses to invest in the wealthiest Americans and corporations in the form of tax cuts. Given the federal government’s recent actions to change the tax code, it is imperative that lawmakers in Mississippi invest in the state’s most financially vulnerable residents. Such investments begin with strong policies.”

Additionally, the Scorecard evaluates 53 different policy measures to determine how well states are addressing the challenges facing their residents. Mississippi has adopted fewer than a quarter of all the recommended policies, with the least progress in the area of Businesses & Jobs, where the state has only adopted one of the 10 recommended policies. On a positive note, Mississippi limited the circumstances under which a mortgage holder can pursue deficiency judgments against a borrower who experiences foreclosure, as such judgments make the homeowner personally liable for the full value of the unpaid debt on the foreclosed home.

Although the 2018 Scorecard assesses states on the steps they took in 2017 to help their residents get ahead, actions at the federal level threaten any progress that states have made, increasing the onus on states to be even more proactive in their efforts to create opportunity. Massive tax breaks provided by the “Tax Cuts and Jobs Act” and the booming stock market constantly touted by President Trump may be good for the very wealthy, but low- and moderate-income households will only see a modest decrease—and perhaps even an increase—in their taxes down the road.

“At a time when federal policymakers seem increasingly indifferent—or even hostile—to the economic futures of low- and moderate-income Americans, good policy at the state and local levels is more important than ever,” said Solana Rice, director of state and local policy for Prosperity Now. “While some states have made progress, it’s clear we need to do much more to help families achieve financial stability and long-term prosperity.”

Among the Scorecard’s other key national findings:

  • More than one in three households (36.8%) does not have enough liquid savings to replace income at the poverty level for just three months if they lose a job or suffer another significant income loss. However, this liquid asset poverty is much more prevalent for households of color: a startling 60.7% of Latino households and 56.7% of Black households are liquid asset poor, compared to 28.2% of White
  • Nearly one in four consumers (24.5%) has at least one account in collections on their credit report, leaving them vulnerable to having their wages and bank accounts
  • Since last year’s Scorecard, the homeownership rate has remained essentially the same at 63%, while homes have gotten more expensive. Median home values have increased 1% (more than $8,000), while median household income has increased just 2%, or roughly $1,138.
  • New Scorecard data show that people with disabilities face significant barriers to financial stability. They are almost twice as likely to live in income poverty and half as likely to have a four-year college degree than those without a disability. Half (50.3%) of households with an adult member with a disability are also liquid asset
  • In 2017, three states (Montana, South Carolina and Hawaii) established a state earned income tax credit (EITC) and two states (Illinois and California) expanded their existing EITCs to cover more working families. Now, a total of 29 states have a state EITC and 12 have a refundable credit that is at least 15% of the federal

To read an analysis of key findings from the 2018 Prosperity Now Scorecard, including data for people with disabilities and households of color, read the main findings report. To browse the comprehensive data, visit scorecard.prosperitynow.org.