More Bad News on the Jobs Front: Families Unprepared for Unemployment
As lawmakers start to shift their attention to job creation, a Brandeis University study finds that four in 10 families don’t have enough savings or assets on hand to pay for essential expenses during a period of unemployment. The report also notes that the poor economy is hitting minority households particularly hard, erasing their economic gains of the past two decades and widening a racial wealth gap.
Here’s more about the study from EurekAlert!, a science and technology news site.
Unemployment rates topping 10 percent are the highest in 26 years. Families are working more hours and taking on more part-time jobs. At the same time, unemployment benefits are running out for many families. Faced with the worst recession since the Great Depression, many U.S. families have no choice but to draw on inadequate savings to pay for essential household expenses. Many of these families are at risk of losing their housing. They may also cut back on food and healthcare to make ends meet.
The report, from Brandeis’ Institute on Assets and Social Policy, tried to measure families’ asset holding to their ability to pay for essential household expenses and also to invest in future opportunities for mobility, such as a home purchase, business start-up, retraining, or education. The report also showed that less than half of all families have sufficient savings to address essential expenses and invest in opportunities for mobility when faced with a job loss. And things get worse from there:
Moreover, many more households of color lack the financial assets to meet their expenses during periods of unemployment. Sixty-six percent of African American and Latino households are not asset secure, and only 20 percent of households of color have financial assets to invest in opportunities for mobility. While most American families lack sufficient wealth to invest in education, housing, business ventures, or training for better jobs, the dramatic distance that marks families of color is a reflection of the profound, deep, and systematic racial wealth gap.
Instead of moving to create jobs, Congress took action recently to extend the first-time homebuyer tax credit and to give homebuilders a big tax break. Hopefully a glimpse of the harsh realities experienced by unemployed workers and their families will entice lawmakers to pass legislation that will produce many more much-needed jobs, instead of propping up home prices and paying off interest groups.