By Chris Thomas
Utah News Connection
SALT LAKE CITY — One-third of Utahns don't have enough savings to keep them afloat for three months in case of a job loss or other emergency, and the Corporation for Enterprise Development says Utah could do more to help its residents improve their financial stability.
It recommends, in a new report, increasing the minimum wage and capping interest rates on payday and car-title loans.
Martha Wunderli, state director of the Utah IDA Network and AAA Fair Credit Foundation, says financial education also should start earlier than high school. She says many folks have to find it on their own, and there are a lot of misconceptions.
"Especially young people may think that a cell phone will establish credit," she says. "Well, it'll establish bad credit if you don't pay your cell phone bill. So, we teach people how to manage credit properly, how to open up accounts, how to pay those off monthly and not get themselves into trouble."
The report also cites Utah's high personal bankruptcy rates and too many children without health insurance as areas of concern. But overall, it ranks the state 11th in the nation for a Utah resident's ability to achieve financial security.
Another new report examines why it's harder for some Utahns to get ahead.
The Institute on Taxation and Economic Policy says people at the lowest 20 percent of the income scale in Utah pay 9.4 percent of their income in state and local taxes — and middle-income earners pay 8.7 percent. The wealthiest Utahns pay 5 percent.
Tracy Gruber, policy analyst with Voices for Utah Children, says that's partly because sales taxes take a bigger bite out of a lower-income budget.
"The top one percent is doing very well," she says. "And the middle and low-income earners are just struggling along - because of wage inequality and tax inequality. Even in Utah, which doesn't rank among the worst, that fairness issue really could be improved."
Gruber says one way to make Utah's tax system more fair would be to institute a state Earned Income Tax Credit for low-wage workers. It's being proposed again in this year's legislature.