Soaring Poverty Rate and Failing Financial Literacy Scores No Coincidence in Mississippi
By Dan Kadlec
February 24, 2017
Mississippi has the highest poverty rate in the country and routinely earns the lowest scores in financial literacy tests. To her credit, State Treasurer Lynn Fitch says that is no coincidence.
Her problem is a state legislature that has its own fiscal problems, and in the most recent session shot down proposals she had endorsed to help turn the tide. Fitch wants mandatory financial literacy classes in high school and equal pay for women. Opposing lawmakers say she is “pandering.”
This is what some advocates are up against as they seek to bring financial education to young people. Mississippi is by no means alone in putting up resistance. With a budget shortfall, New Mexico recently cut its financial literacy programs. Ohio has backtracked. In Quebec, Canada, officials are embroiled in a battle royale over financial education in schools.
But the issue in Mississippi is most striking because of the state’s dubious rankings. With 22% of the state’s population living below the poverty line, it comes in dead last. In December, Mississippi received a C in a national report card on adult financial literacy from the Champlain College Center for Financial Literacy. The state rates dead last in another report on least money savvy states.
The Champlain College report card gives states a grade based on their population’s financial knowledge, credit, saving and spending, retirement readiness and levels of insurance. Mississippi got an F in all but one category: financial knowledge, where it scored a D.
Officials may have some grounds for dragging their feet on financial education. Programs cost money and servicing Mississippi’s $1.3 billion of debt consumes the third largest part of the state budget. In other words, they have a money problem and, ironically, the legislators themselves seem like good candidates for financial education.
The pandering comment was directed at Treasurer Fitch’s support for equal pay. Women in Mississippi who work full‐time earn 27% less than men who work full‐time. That is above the national average of 19%. She sees closing this gap as a step toward pulling families out of poverty.
With that in mind she may want to separate the two issues in the next go-round. Both are important. But winning one battle is better than losing both, and there is general agreement that financial education is an important tool. Already, Mississippi requires that financial literacy be offered as an elective, though it has few controls over the class and generally fails to monitor student achievement.