Report: 18.7 pct of W.Va. residents lack nest egg

CHARLESTON, W.Va. — A nonprofit group says nearly one in five West Virginia residents have almost no savings or other assets to weather a financial crisis.

The report released last week by the Corporation for Enterprise Development shows 18.7 percent of West Virginia residents don't have a financial cushion in case they lose their jobs or sources of income.

While many West Virginia residents have jobs, they lack adequate savings or other assets to cover expenses for three months if they lose steady income. One of the measures excludes assets such as a home or car that cannot be easily converted into cash for day-to-day needs.

"Without those savings, few will be able to invest in a more economically secure future, including buying a home, saving for their children's college educations or building a retirement nest egg," said CFED President Andrea Levere.

The group used 52 measures in five different areas: finances and income; businesses and jobs; housing and home ownership; health care, and education. West Virginia ranks 18th among the states.

West Virginia earned "A'' grades in health care and in housing and home ownership. The state received a "C'' both for financial assets and income, and businesses and jobs. It also received an "F'' in education.

While West Virginia has a solid effort of enrollment early childhood education, the report noted the state's poor ranking in residents who attain two- or four-year college degrees. The state also ranked low in 8th grade math and reading proficiency.

The report noted West Virginia ranks 45th in the income poverty rate, 40th in the bankruptcy rate and 37th in consumers with subprime credit. It has among the worst rates for microenterprise ownership, average annual wages and high-cost mortgage loans.

The report suggests West Virginia can implement several policies to improve its climate for asset building.

In order to increase microenterprise and small business ownership opportunities, West Virginia should boost state funding and federal block grant funding for microenterprise development and create a self-employment assistance program.

Income for low-wage earners can be maximized by implementing state tax credits such as the earned income tax credit, child tax credit and child and dependent care tax credit.

Regulations of mortgage lenders need to be increased to reduce the number of high-cost mortgage loans, while a greater clampdown is needed on entities that offer predatory short-term loans, the report found.

"We cannot let the challenges facing our economy prevent us from investing in policies with a proven record of helping struggling families succeed," Levere said. "As a country, we must take the necessary steps today to protect vulnerable families from further financial shocks and lay the groundwork for future prosperity."

The Washington, D.C.-based Corporation for Enterprise Development is dedicated to expanding economic opportunity for low-income families and communities.

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Online:

http://cfed.org/