Americans with lower incomes have better outcomes in Vermont, North Dakota and New Hampshire, according to a new study on household financial security.

Wyoming and Alaska round out the top five in the latest annual survey by the Corporation for Enterprise Development (CFED), a Washington-based policy and advocacy center for low-income families and communities.

In a release accompanying its scorecard, the advocacy organization laments that nearly half of all Americans, 44%, are living paycheck to paycheck, with insufficient liquid assets needed to weather a financial calamity such as loss of a job or a medical emergency.

These “liquid asset poor” Americans are those lacking three months’ worth of savings — conservatively quantified at $5,887 for a family of four — and reaches farther up the income scale than stereotypes might suggest.

“One quarter (25%) of middle class households (those earning $56,113 to $91,356 annually) have less than three months of savings,” CFED says in its report. “The majority of the liquid asset poor are white (59%) and employed (89%), and nearly half (48%) have at least some college. Among liquid asset poor families with children, roughly half (51%) are headed by two parents.”

When low-liquidity Americans get squeezed, their options can be quite limiting as a majority of all Americans, 56%, have subprime credit scores, meaning that they may have to take out a “high-cost — often predatory — loan, which can create a cycle of debt and worsen financial insecurity,” CFED says.

CFED, which has been scoring the states for 20 years but modified its assessment in 2007 to focus more on financial security, is  particularly interested in the geography of financial security, since it finds that widely varying social policy at state and local levels affects Americans’ ability to secure their financial futures.

Southern states performed worst in the 2014 scorecard, with Mississippi most behind, followed by Nevada, Georgia, Alabama and South Carolina.

In top-ranked Vermont, where the average annual pay is $40,844, 27% of residents are “liquid asset poor,” a figure that rises to 61.9% for 51st-ranked Mississippi, with a nearly identical average annual pay of $40,309.

The low-income advocacy center argues that better policy can affect these scores, and offers the ability to compare states on an variety of socioeconomic measures. For example, a user can customize a chart comparing the share of people without health insurance in Massachusetts, which ranks best in this category with 4.4% uninsured, and the rate in Pennsylvania, which is 11.5%.

CFED argues that if Pennsylvania adopted Massachusetts’ health insurance policies, an additional 742,971 Pennsylvanians would be covered, thus illustrating “the power that good policy can have on the lives of individuals and households.”

While Vermont ranks highest in overall household financial security outcomes, CFED places Maryland at the top of a separate ranking of states in terms of the policies the center advocates.

The mid-Atlantic state has a state earned income tax credit; has eliminated asset tests for welfare programs like Temporary Aid for Needy Families and the Supplemental Nutrition Assistance Program (food stamps); requires full-day kindergarten; and has a minimum wage higher than the federal level, among a variety of generally liberal policy measures CFED endorses.

New York, New Jersey, Maine and Connecticut round out its top five list.

The advocacy organization identifies Wyoming, Mississippi, Alaska, Alabama and Missouri as the states least helpful in the area of policies it argues promotes financial security. So Wyoming has none of the programs and Mississippi only has a required full-day kindergarten of those policies noted above for Maryland.

In its report, CFED states that financial security outcomes are helped by, but are not all about, policy.

“Even with strong policies, it is more difficult to improve outcomes in states that have high levels of income inequality, a high cost of living and substantial demographic diversity. For example, states like New York, Connecticut and New Jersey all have policy ranks in the top 10, yet their outcomes ranks trail by more than 20 places,” CFED writes.

“On the flip side,” the report continues, “improving outcomes is less difficult in states with low cost of living, minimal income inequality, homogenous populations and strong economies (often fueled by abundant natural resources), such as Wyoming, Alaska and South Dakota. Those factors, combined with a libertarian streak that eschews government intervention, help explain the comparatively better outcomes for families in spite of having adopted few policies that promote economic security.”

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