10 Congressional Districts with the Most and Least Short-Term Savings
More than one-third of U.S. households don’t have enough savings to weather a financial crisis like a sudden job loss, medical emergency or other economic setback. It’s a problem that makes financial stability much more difficult, and affects people of color almost twice as often as White households.
Without emergency savings, many families turn to predatory lending—like payday loans—paying astronomically high interest rates. And without short-term savings, long-term savings (for investments like a home or a car) easily fall by the wayside.
That’s why Prosperity Now has advocated for policies that would allow families to build savings in both the short- and long-term. This includes encouraging employers and banks to adopt and promote rainy day accounts; lifting asset limits on social safety net programs like the Supplemental Nutrition Assistance Program (SNAP), Temporary Assistance for Needy Families (TANF) and Medicaid that penalize low-income families for saving; and establishing national retirement savings programs.
People across the country are affected by this lack of liquid savings, but some communities are harder hit than others. New data released in the Prosperity Now Scorecard allows us to look closer at the congressional districts with the highest and lowest Liquid Asset Poverty (LAP) rates.
LAP rates describe access to savings that could be used for an emergency tomorrow, not savings toward long-term goals in restricted accounts, like a 401(k). The rate for a given district is equal to the share of households that don’t have enough short-term savings to make it through a financial emergency. (For example, a family of four is considered liquid-asset poor if it does not have $6,150 in accessible assets.)
Top 10 Congressional Districts with the Highest and Lowest Liquid Asset Poverty Rates
In general, the congressional districts with the highest LAP rates tend to be primarily urban, and all but one (Kentucky's 5th District, which covers the eastern part of the state in Appalachia) are majority-minority. Four of the top 10 districts below are at least one-half Hispanic, three are majority African-American and the remaining two are districts in which no single racial group has a majority.
Highest LAP Districts (Least Access to Emergency Savings)
- New York’s 15th District (Rep. José Serrano, D): 54.1%
- Arizona’s 7th District (Rep. Ruben Gallego, D): 49.8%
- Texas’s 33rd District (Rep. Marc Veasey, D): 48.4%
- Michigan’s 13th District (vacant, formerly Rep. John Conyers, D): 48.3%
- Kentucky’s 5th District (Rep. Hal Rogers, R): 48.0%
- Florida’s 5th District (Rep. Al Lawson, D): 47.9%
- Alabama’s 7th District (Rep. Terri Sewell, D): 45%
- Mississippi’s 2nd District (Rep. Bennie Thompson, D): 47.3%
- North Carolina’s 12th District (Rep. Alma Adams, D): 47.2%
- California’s 34th District (Rep. Jimmy Gomez, D): 47.2%
By contrast, districts with low LAP rates are overwhelmingly White and suburban. In nine districts, Whites make up more than half of the population. And while many of the high-LAP districts are deep in the nation's cities, all of the below districts are just outside many of those same cities. Six are suburbs of New York City, three are suburbs of Washington, DC and one is in Silicon Valley, not far from San Francisco.
Lowest LAP Districts (Most Access to Emergency Savings)
- New York’s 3rd District (Rep. Tom Suozzi, D): 20.4%
- New Jersey’s 11th District (Rep. Rodney Frelinghuysen, R): 21.2%
- Virginia’s 10th District (Rep. Barbara Comstock, R): 21.4%
- New Jersey’s 7th District (Rep. Leonard Lance, R): 21.7%
- Virginia’s 11th District (Rep. Gerry Connolly, D): 22.5%
- California’s 18th District (Rep. Anna Eshoo, D): 22.6%
- New York’s 4th District (Rep. Kathleen Rice, D): 22.7%
- Maryland’s 8th District (Rep. Jamie Raskin, D): 22.9%
- New Jersey’s 5th District (Rep. Josh Gottheimer, D): 23.3%
- New York’s 2nd District (Rep. Peter King, R): 23.9%
Using Prosperity Now's New Data
The newly released data in the Prosperity Now Scorecard allows advocates to drill down into their congressional districts and tribal lands for the first time and explore the numbers behind poverty and prosperity in their communities. The data goes well beyond LAP rates, including more than two dozen measures of financial health. Among them: homeownership rates, unemployment, the ratio of wealth held by White households to households of color, prevalence of health coverage and educational attainment.
With the midterm election fewer than five months away and primary elections already underway, now is the time to push Congress and local officials to adopt policies that help all Americans—regardless of where they live—create financial stability. For example, congressional backing of these Prosperity Now-endorsed policies would create greater opportunity for people to build emergency and long-term savings:
- Rainy Day EITC: The Earned Income Tax Credit (EITC) is the largest U.S. government program that boosts the earnings of low-income workers. A proposal to let EITC recipients delay 20% of their refund and receive a modest increase in the payout would encourage savings and make the EITC a tool for financial security.
- Credit Access and Inclusion Act: People who rent a home are often left out of the credit market because on-time rent and utility payments don't factor into credit scores. Congress is considering legislation to encourage use of alternative data, which could help boost low-income individuals' credit history and scores. Access to credit allows people to benefit from lower interest rates and avoid predatory payday lending. This can contribute to greater savings capacity over time.
- Strengthened consumer protections: Acting Director Mick Mulvaney has worked to roll back Consumer Financial Protection Bureau (CFPB) regulations and stop the agency's enforcement actions against financial institutions. Last week, President Trump nominated Kathy Kraninger from the Office of Management and Budget to be the agency’s next director, even though she has not worked in consumer financial protection. Congress should focus on strengthening the CFPB’s regulations to protect consumers and ensuring the agency has leadership that believes in its mission.
Using this new data, as well as the existing state, city and county information in the Scorecard, advocates and community members can make a stronger case for policies that reduce inequality and create financial stability.