Arizona made progress over the past year and achieved its best overall ranking in an annual national study of household financial wellness conducted by the progressive Prosperity Now organization.

But economic improvement at the national level isn’t broadly shared by lower-income Arizonans, and the report puts the state among the bottom third nationally, at 36th among the states.

Among the good news: Arizona’s unemployment rate is at an 11-year low, the poverty rate has decreased slightly and the housing market is solid, with some of the nation’s lowest rates of foreclosures and delinquent mortgages. 

But widening income inequality, underemployment, education deficiencies and a relatively low rate of health-insurance coverage pinpointed some of the problems.

Arizona’s overall ranking marked an improvement from 40th place last year and represents Arizona’s best showing in the annual study, which began in 2012.

The study evaluates the 50 states and Washington, D.C., in five areas: financial assets/income, businesses/jobs, homeownership/housing, health care and education.

Here’s how Arizona fared:

Homeownership and housing: 16th place

Arizona’s highest ranking among the 50 states and Washington, D.C., was in this category, helped by the nation’s third-lowest rate of foreclosures and eighth-lowest rate of delinquent mortgages.

Among negatives, a large percentage of Arizona homeowners have high-cost mortgages, which often reflect low credit scores.

Assets and income: 31st place

Arizona next-best showing was in financial assets/income, with relatively high levels of emergency savings but poor results in terms of overall poverty and the proportion of seriously delinquent borrowers.

One notable finding was that the richest 20 percent of Arizona households earn 4.6 times more than the poorest 20 percent, a relatively wide income-inequality gap.

Education: 39th place

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Relatively good marks for student-loan debts and and college degrees by income in Arizona were offset by poor showings in terms of high school graduation rates, college degrees by race and early childhood education enrollments, among other factors.

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Businesses and jobs: 44th place

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While Arizona has the nation’s highest proportion of women-owned businesses, it suffers in other areas. These include a relatively high underemployment rate and the nation’s lowest rate of small-business ownership in general, according to the study.

SEE ALSO: Arizona companies hiring 100 or more in February 2018

Health care: 47th place

Arizona’s lowest ranking among the five main categories came in health care. It reflected a high health uninsurance rate (near 12 percent of the population), a high rate of uninsured low-income children and a low rate of workers with employer-provided coverage.

All told, the study evaluated 62 measures in the five categories in ranking the states. Vermont had the top overall ranking, followed by New Hampshire, Hawaii, Minnesota and Utah. Mississippi placed last.

The report is at scorecard.prosperitynow.org.

RELATED: Health-care lifeline: St. Vincent de Paul clinic aids metro Phoenix poor, uninsured

How can the state improve?

Andrea Levere, president of Prosperity Now, called on Arizona lawmakers to “invest in the state’s most financially vulnerable residents,” especially as federal income-tax reform could widen income inequality.

Among race-related findings cited in the report, Arizona’s minority households are 1.5 times less likely to own a home than White households. Also, nearly 22 percent of minority households have income at or below the federal poverty level, compared to 11 percent of White households.

Arizona has made some progress to support financial security, according to the report, which cited the state’s adoption of mandatory paid sick leave for nearly all workers as a positive.

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That change, the result of a ballot initiative vigorously opposed by the Arizona Chamber of Commerce and Industry, took effect last year. But the study criticized Arizona for reducing funding for workforce training, which can make it more difficult for residents to find quality jobs.

Nationally, Prosperity Now sees income inequality widening, especially as a result of income-tax reform. The group called on states to do more to help families achieve financial stability and prosperity.

Among other key national findings:

  • Nearly 37 percent of households don’t have enough liquid savings to make ends meet for just three months in the event of a job loss or other significant financial setback, including 61 percent of Latino households and 57 percent of Black households, compared to 28 percent of White households.
  • Among consumers, nearly one in four has at least one account in collections on their credit report, leaving them vulnerable to having wages or bank accounts garnished. 
  • The nation’s homeownership rate has held steady, near 63 percent, yet homes have gotten more expensive, making purchases more elusive for many.

Reach the reporter at russ.wiles@arizonarepublic.com or 602-444-8616.

 

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