A diverse coalition working to build the strength and stability of families and communities. IABG began in 2004 to promote asset building as an innovative approach to eliminating poverty and creating opportunities for Illinois residents.
How is asset poverty different from income poverty?
Measuring net worth by considering assets and liabilities, as opposed to income alone, provides a more long-term and encompassing view of economic security and mobility. In Illinois 26.9% of households are asset poor vs. 10.9% that are defined under income poverty.
What is Assets Poverty?
Households experiencing asset poverty do not have enough cash reserves (savings, stocks, retirement accounts, equity in a home or business) to get by at the federal poverty level for three months when their primary source of income is eliminated through job loss or other disruption.
The Illinois Asset Poverty Index (IAPI) provides data on asset poverty for counties and county groupings across Illinois. Developed with help from our partner organization in California, the IAPI enables Illinois residents to ascertain asset poverty rates for the communities in which they live. Illinois Asset Poverty Index
IAPI County Clusters Asset Poverty in Cook County To view IAPI data for all of Illinois go to: http://www.illinoisassetbuilding.org/data/assetpoverty/ 39.7% 15.4% 0.2% Native 27.6% 9.3% 5.6% Asian 49.5% 15.8% 14.8% Latino 48.9% 20.5% 15.9% Black 19.4% 5.3% 63.6% White Race 64.4% 18.0% 42.0% Renters 3.6% 3.5% 58.0% Homeowners Housing Tenure 29.2% 9.6% 1,160,152 Total Asset Poverty Income Poverty Demographics Category
IAPI County Clusters Asset Poverty in Cook County To view IAPI data for all of Illinois go to: http://www.illinoisassetbuilding.org/data/assetpoverty/ 50.9% 21.5% 14.5% Single, children at home 36.6% 12.0% 35.8% Single, no children at home 18.2% 5.0% 34.6% Married, children at home 15.7% 2.9% 15.1% Married, no children at home Family Composition 16.2% 8.4% 16.7% Over 55 20.8% 7.2% 25.0% 45-54 27.7% 9.0% 28.4% 35-44 44.8% 12.8% 30.0% Under 35 Age Asset Poverty Income Poverty Demographics Category
IL Household Net Worth 15.4% of all Illinois households have zero or negative net worth, meaning they may owe more than they own. Median Net Worth of Illinois Households by Race in 2004 White – $128,444 Minority – $12,100 Illinois asset poverty has increased 6.4% since 2004
Education as an Asset As an asset, education has a cumulative life-long impact in the form of higher annual incomes and more money to put away into savings or investments such as a home. Illinois Educational Attainment, 2006 $60,695 10.8% Graduate or professional degree $47,484 18.1% Bachelor’s degree $33,383 27.3% Some college or associate’s degree $27,048 28.9% High school diploma $20,019 15.0% Less than a high school diploma Illinois Median Annual Earnings Percent of Adults age 25 and Over Highest Educational Level Attained
Ways to Help Build Assets Earned Income Tax Credit Children’s Savings Accounts Payday Loan Reform
Earned Income Tax Credit The Earned Income Tax Credit (EITC) is a refundable income tax credit for low-income working individuals and families.
Because it is refundable the EITC is given as a tax refund payment when the credit exceeds the amount of taxes owed
EITC is available on both federal and Illinois state income taxes
In 2007 the maximum federal EITC for a individuals with two or more qualifying children was $4,716
In the past payday loans normally had terms of approximately two weeks. After an Illinois law was initiated to regulate payday loans most lenders extended terms past 120 days as a loop hole to avoid this law. By doing so lenders can continue to provide loans with no consumer protections.
Payday Loan Reform
How to Reform Payday Loans:
In order to eliminate loop holes, and reform payday lending once and for all, amendments must be made to the Consumer Installment Loan Act
Amendments should include limits on charges & fees, cap interest rates, restrict prepayment penalty and amortize all loans
Legislation is being discussed in this session and will continue until the problem has been solved