New York, U.S.A. – Bankrate.com’s monthly Financial Security Index hit a new high of 99.9 in April 2012, surpassing the previous high-water mark of 98.5 that was last recorded in May 2011 (the polls began in Dec. 2010). Americans’ attitudes regarding their net worth and overall financial situation also reached new highs this month. Sentiment regarding savings improved for a fifth consecutive month, and Americans’ comfort level with debt is at its highest point since June 2011.

Despite these positive developments, Americans are still wary of investing in stocks. The poll found that 76% of Americans are not more inclined to invest in the stock market despite near record low savings rates, and merely 18% of Americans are more inclined to invest in stocks today. Another soft spot is job security: 22% of Americans reported less job security than one year ago versus 20% that reported better job security.

“Overall, there are several positives that can be taken from this month’s report,” said Greg McBride, CFA, Bankrate.com’s senior financial analyst. “Americans are feeling better about the money they have in the bank and in their investment portfolios, and they’re also feeling better about what they owe. However, job security is still a pain point, and there are plenty of reasons to worry that we might be headed into a third straight weak summer for the economy. The trouble spots include jobs, high gas prices, the ongoing European debt crisis and more.”

A reading of 100 is considered the Financial Security Index’s baseline; any reading above 100 indicates improving financial security compared to one year ago, while any reading below 100 indicates decreasing financial security compared to last year.

Here are more details regarding the components of the Financial Security Index:

Overall Financial Situation

• Consumers’ feelings about their overall financial situation hit a new high, with 29% saying their overall financial situation is better today than it was 12 months ago, compared to 26% saying it is now worse.
• Those under age 50 are more likely to report a better overall financial situation, while those age 50 and up are more likely to report a worse financial situation than one year ago.

Net Worth

• With the stock market near four-year highs, more consumers report higher net worth compared to one year ago than at any time since polling began in Dec. 2010.
• Twenty-nine percent report higher net worth versus 23% that report lower net worth.
• Households with income of $50,000 or more are the most likely to report higher net worth than last year.

Savings

• The margin between those feeling worse about their savings and those feeling better about their savings has been nearly cut in half since Dec. 2011.
• Those under age 30 tend to be more comfortable with their savings, and those age 50 and up tend to be less comfortable with their savings compared to other age groups.

Debt

• Americans’ comfort level with debt is at its highest point since June 2011.
• More consumers report being more comfortable with their debt than less comfortable.
• Households with annual income of $50,000 or higher are more comfortable than other groups, while households with income under $30,000 are less comfortable.

Job Security

• Job security slipped following the disappointing March jobs report that was released on April 6.
• Only one in five (20%) Americans say they are more secure in their jobs compared to last year; 22% are less secure.

Investing in Stocks

• Those under age 30 are only slightly more inclined to invest in the stock market than the overall average (23% versus 18%), despite having the luxury of a long time horizon and having a greater burden of retirement savings than any previous generation.

The new study was conducted by Princeton Survey Research Associates International (PSRAI) and can be seen in its entirety here: http://www.bankrate.com/finance/consumer-index/financial-security-poll-0412.aspx.

The PSRAI April 2012 Omnibus Week 1 obtained telephone interviews with a nationally representative sample of 1,000 adults living in the continental United States. Telephone interviews were conducted by landline (600) and cell phone (400, including 191 without a landline phone). Interviews were done in English by Princeton Data Source from April 5-8, 2012.

Statistical results are weighted to correct known demographic discrepancies. The margin of sampling error for the complete set of weighted data is plus or minus 3.6 percentage points.

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The Employee Ownership Foundation has focused on convincing evidence from the most prestigious social survey in the U.S., the General Social Survey (GSS), that showed employees in the U.S who had employee stock ownership were four times less likely to be laid off during the Great Recession than employees without employee stock ownership.

Specifically, the 2010 GSS, funded primarily by the National Science Foundation and conducted by the National Opinion Research Center at the University of Chicago, found that 3% of employees with employee stock ownership, which include the ESOP model and other forms of employee ownership, were laid off in 2009-2010 compared to a 12% rate for employees without employee stock ownership.

In addition, the 2010 GSS data indicated that 13% of the employees with employee stock ownership intended to leave their companies in the coming months whereas the rate was 24% for employees without employee stock ownership. This indicates significantly lower expected turnover for workers with employee stock ownership.

“These numbers confirm what observers of employee stock ownership have been saying for years,” said J. Michael Keeling, president of the Employee Ownership Foundation. “Employees with employee stock ownership, including those with ESOPs, in general, have more sustainable employment. Too bad we had to suffer a Great Recession to have the objective data to shed more light on these claims,” he added.

Additionally, the survey found that employee ownership rates remained stable since 2006 with 17.4% of individuals reporting they owned company stock. About 19 million U.S. citizens own stock in the companies in which they work.

The Employee Ownership Foundation provided significant funding for the supplemental series of questions on shared capitalism in the survey. Shared capitalism is defined as broad-based employee, current or deferred, stock compensation programs, such as ESOPs (employee stock ownership plans), stock purchases, stock options, gain sharing, profit sharing, and bonus programs.

The shared capitalism series of questions were developed and analyzed by well-known employee ownership researchers, Professor Joseph Blasi and Professor Douglas Kruse (School of Management and Labor Relations at Rutgers University) who submitted an application for their inclusion in the GSS.

The researchers are continuing to analyze these and other related data from the Survey to shed light on the role of employee stock ownership in the U.S. economy. ”We need policies that are job sustainers, not just policies that are job creators,” Keeling said.

“Hopefully our national leaders, including the current group of those running for President, of both parties, will take note of this evidence, and understand that national policies to encourage employee stock ownership, and new policies to increase ownership among more working Americans, need to be considered as an effective way to ensure our national employment rate is where we all want it to be.”

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