Annual Poverty Project Focuses on Financial Literacy

Contact Information:

Brian Mayer
School of Sociology
520.626.2190
brianmayer@email.arizona.edu

A lack of access to checking or savings accounts is prevalent among Tucson households whose inhabitants live below the poverty line, according to findings presented by University of Arizona students from the Poverty in Tucson Field Workshop.

During the third annual community forum, held May 11 at Habitat for Humanity Tucson, students presented data from the Tucson Wellbeing Survey to more than 100 community members, city officials and nonprofit organizers.

The event was the culmination of the students' semester-long efforts to collect data from low-income households.

The Poverty in Tucson Field Workshop was developed to help local governments and nonprofit organizations better understand the causes and consequences of poverty in Tucson. The workshop has been an ongoing research collaboration between the School of Sociology, the College of Social and Behavioral Sciences, and local nonprofits, including Habitat for Humanity Tucson, the Community Foundation for Southern Arizona and the Community Food Bank of Southern Arizona.

"Tucson has a high and unfortunately persistent problem with poverty, with 25 percent of all households and more than 33 percent of all children in Tucson currently living below the federal poverty threshold," said Brian Mayer, associate professor in the UA School of Sociology.

This year’s class interviewed 296 households from nine high poverty census tracts in Tucson. Of the respondents, 14.3 percent were unemployed; the rest were retired or working full or part time. More than 50 percent of the respondents had at least some college education.

This year, the survey introduced questions on financial security and literacy.

“Concerns about low income Americans being un- or under-banked have risen in recent years, especially in regards to increasing debt and a lack of access to financial credit in order to obtain mortgages and other credit-based opportunities,” said Mayer, who is also a fellow in the Agnese Nelms Haury Program in Environment and Social Justice.

Mayer used a version of a survey conducted each year by the FDIC, which found that nationally, about 7 percent of households were unbanked – meaning that they don’t have access to a savings or checking account. In the UA survey, 15 percent of households lacked access to either savings or checking. That number rose to 32.4 percent among those living in extreme poverty (defined as making less than half of the poverty threshold).

The most common answers for why people didn’t have checking or savings accounts were that they didn’t trust banks (38.4 percent) and they don’t have enough money for a bank account (38.4 percent). This lack of trust in banks was much higher in the Tucson sample than in the national sample. Other reasons for being “unbanked” included fees being too unpredictable (29.6 percent) and fees being too high (28.8 percent).

The FDIC also counts households that are under-banked, meaning that they use nontraditional methods to get access to finances, such as pawn shops, title loans and money orders.

“That rate is about 20 percent nationally, but is an amazingly high 64 percent here,” Mayer said. “Though that seems largely driven by people obtaining money orders, it still suggests a major financial challenge for our low-income households.”

Mayer adds, “The results really calls into question. What are our financial institutions doing for the vulnerable in Tucson?”

As in previous years, housing overburden (spending more than 30 percent of income on housing) remained a problem, with 92.5 percent of those at the poverty level being overburdened.

And housing remains the most common unmet need. From assistance with payments and utilities to finding affordable housing, 43 percent of social service providers reported being asked for help with needs related to housing.

The number of homes not accessing government and charitable assistance also remained high, with 26.5 percent of those in extreme poverty reporting that they never use government assistance. In addition, 35.3 percent of this group report never receiving help from a charity or nonprofit.

Lauren Rosell, who is majoring in sociology and communication, said she was struck by how much of a hassle it can be for people to obtain government or charitable assistance, often needing to take time off work or secure transportation to access benefits. “We need to have the resources more accessible so that they don’t have to lose resources to get more resources,” she said.

Lack of awareness of services also continues to come up as a barrier to obtaining help.

Antashia Amick, who is majoring in family studies and human development, said people in these communities are receiving advertising for title loans but not from nonprofits. “They are not seeing that there are organizations that can help them rather than get them deeper in a hole.”

The workshop demonstrate the UA's commitment to 100% Engagement. Students in the course gain hands-on social research experience, an enhanced understanding of poverty-related issues, and real-world professional skills.

“I prefer this type of class because I prefer to be a hands-on learner,” said Jordain McDanel, who is majoring in care, health and society. “Being able to be go out into the community was more beneficial than just reading a text book.”

Katelyn Gallo, a psychology sophomore, thinks the research experience she got in the class helped her secure a research assistant position. Sociology major Jessica Cornidez adds, “It got me out of my shell. It was good for my communication skills and learning to do interviews was also a lot of fun.”

The focus of next year's research will be determined by community partners and local nonprofits, Mayer said.

Published Date: 

05/18/2017 - 1:32pm