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Little long-term security for Latino middle class

Many Latino families who have made it to the middle class might not be there for long. A study by Demos and the Institute for Assets and Social Policy at Brandeis University concludes people in this group are either borderline or at high risk of not being in the middle class altogether.

Fewer than one in five Latino middle-class families in the U.S. is financially secure, according to “Economic (In)Security: The Experience of the African American and Latino Middle Classes,” the first comprehensive report to size up the economic stability of households of color in the United States. Economic (In)Security” is the second in a series of reports and briefing papers developed by the non-partisan policy center Demos and IASP/Brandeis.

Using government data, the study uses the new Middle Class Security Index that measures middle class financial security by rating household stability in assets, budget, educational achievement, healthcare and housing costs. A family’s rankings in these factors were labeled as financially “secure,” “borderline” or “at risk.” The study revealed Latino middle-class families are less secure and at greater risk on all five indicators than the middle class as a whole. Also, poor Latino families face more challenges moving into the middle class than do poor people as a whole. In fact, 41 percent of Latino middle-class families are in danger of slipping into poverty.

The study says assets and housing costs are among key destabilizing factors Latino middle-class families face. For example, only 8 percent of the families claim enough net financial assets to meet three-quarters of essential living expenses for nine months if income sources stopped. Further, about 87 percent of Latino middle-class families do not have sufficient assets to meet three-quarters of three months in living expenses if income disappeared. Just a little more than a third of the families spend less than 20 percent of after-tax income on housing – below the national average of 40 percent.

“Given the forecasts for population growth, (political) candidates who say they are trying to build a better future for America cannot continue to ignore the great disparities, especially in key areas such as assets and housing costs that make the African-American and Latino middle classes financially weaker and less stable than their white counterparts,” says report co-author Jennifer Wheary.

To help offer access to and strengthen the middle class, the report recommends policies impacting such areas as building assets and reducing debt, making higher education more accessible and affordable, and addressing the healthcare crisis. For more, www.demos.org and www.iasp.brandeis.edu.