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The theory that California has evolved into a two-tier society is getting another dose of statistical support from a new nationwide survey of family economic security.

The Washington-based Corporation for Enterprise Development (CFED) found that Californians rank 38th among the states in economic security by such indices as poverty rate, savings, and net worth. It means, CFED's report said, that nearly half of California residents have no savings on which to rely in the event of job loss, illness or "other income-depleting emergency."

The state would rank even lower were the federal government to adopt a proposed new standard of gauging poverty. Under the current system, which is reflected in the CFED report, the state ranks 29th in poverty rate at 14.6 percent, but under the proposed new system, which takes into account living costs and other factors, the state would have the nation's highest poverty rate.

The detailed section of the report on California cites as major factors in the state's low economic security ranking its high level of average credit card debt ($13,825; ranked 48th) and its high bankruptcy rate, 6.2 per 1,000 residents, nearly 50 percent higher than the national rate (ranked 45th).

The state also ranks 49th in home ownership and the same level in the percentage of household income devoted to rent or house payments. Meanwhile, the Census Bureau also released a new report on home ownership, confirming that California has one of the nation's lowest levels of living in owner-occupied homes and revealing that the state's large population of foreign-born residents are less likely than those in other states to own homes.

Nationwide, the Census report said, 51.5 percent of foreign-born Americans live in owner-occupied homes, but among California's nearly 4 million foreign-born households, it's 47.9 percent, the seventh-lowest rate among the states and the District of Columbia.

The state's brighter points in the CFED report include a No. 10 ranking in very small business (micro-enterprise) ownership, 18th and 15th places in possession of two- or four-year college degrees, and low levels of college debt, thanks to the state's historically low costs of obtaining higher educations.

The state's wide economic disparities include the finding that white households have 10 times the net worth of non-white households and that Californians in the top quintile of income have 147 times the net worth of those lower on the economic totem pole, while the national rate is 68 times.

The "asset poverty rate" - a measure of family wealth - is twice as high for non-white households as it is for white-headed families, the study also found, and the disparity is similar in the "liquid asset poverty rate."

The report recommends that California deal with the gaps in economic security by providing more assistance to first-time homeowners, protecting consumers from predatory lending, encouraging savings by public assistance recipients, spending more on K-12 education to raise its comparatively low high school graduation rates and creating "strong systems for teacher evaluation and retention."


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