Heated dissention over tax cuts and health care for Americansare center stage. But back stage, a relevant, worrisome and largelyoverlooked issue lingers: The average Financial Wellness Score for U.S. employees is a dismayinglylow 5.4 on a scale of one to 10. Indeed, only about 6% of theoverall workforce can be considered financially secure, defined asscoring at least nine out of 10.

Driven by money behaviors, financial wellness means maintaining a lifestyle at or below one'sfinancial needs, keeping an emergency fund and carrying areasonable level of debt, among other components, said CynthiaMeyer, resident financial planner at Financial Finesse, a leadingfinancial education and research company.

In its study, “Optimizing Financial Wellness for a DiverseWorkforce,” released in May, Financial Finesse found that only onein five employees of all ethnicities, including earners of $200,000or above, had emergency savings.

Focusing on disparities among ethnic groups, the study showedthat 31% of African-American employees and 25% of Hispanic/Latinosare “struggling” or “suffering” financially. Further, unlesseducated and coached, these groups are likely to maintain behaviorsthat keep them in a “cycle of low financial wellness.”

With the U.S. workforce becoming more diverse, these matters areincreasingly important to employers. For example, employees who arestruggling or suffering financially are costly to companies becauseof absenteeism, tax issues, wage garnishment and delayedretirement. A 2016 Financial Finesse study of all ethnicitiesshowed that, on average, the annual cost to employers totals $198per suffering employee and $94 per struggling employee.

Below is an excerpt of an interview with Meyer.

Q: Just what does financial wellnessentail?

A: A state of financial well-being thatincludes maintaining a manageable level of financial stress, alifestyle that's at or below financial needs, a strong financialfoundation including emergency savings and basic insurance, a willor estate plan and low or not-high credit card debt or otherdebt.

Q: How do U.S. employees of all ethnicitiesscore on financial wellness?

A: It's so depressing. Our 2016 data show thatonly 6% of employees were in the “Secure” category. Our “DiverseWorkforce” survey found that the overall average was 5.4. There's alot of room for improvement.

Q: Why are the levels so low?

A: Financial wellness is about people'sbehavior. Small daily activities lead to strong, robust financialwellness — being relatively restrained in spending, making sureyou've automated your savings so that you have a set amount goingto important goals. Risk management is a big component. So ismaking sure you put some money away for high-deductible health careplans.

Q: Did your recent study include high earningAfrican-American and Hispanic employees in the survey too?

A: Yes. We looked at employees in eachdemographic group. We found that only one in four African-Americanshad an emergency fund to cover unexpected expenses. Even withemployees who have very high incomes — $200,000 and above [of allethnicities] — we still find that almost one in five have noemergency fund. They don't have a cash cushion. So a big negativefinancial event can send the whole cart tipping over.

Q: The study pointed out thatmost in the minority groups of African-American and Hispanic haveno investment account. Why is that?

A: Folks in the struggling and sufferingcategories need to build an emergency fund first before they'regoing to have that nice brokerage-account nest egg to invest. Wefound that people in those two groups were more likely to pull outloans for hardship withdrawals from their 401(k) plans or take outcash when they move from one job to another.

Q: Do they distrust financial advisors? Is thatalso a reason for not having an investment account?

A: In general, there's research showing thattrust in financial services plummeted during the [financialcrisis], and the industry as a whole has a way to go to achieve theprevious level of trust.

Q: But isn't lower income among blacks andLatinos a major part of why people in these groups are strugglingor suffering financially?

A: Certainly income and age are factors. Wefound that both groups of employees consistently lagged across theincome spectrum — that is, they started off in the lower incomebrackets and finished lower in the highest income brackets. So,even for those employees who had an income of $200,000 and above,there's still this big divide.

Q: The survey also showed that blacks andHispanics are loaded with debt. Can part of that be blamed on bankswooing people to open accounts and buy on credit? If so, they pileon more and more debt.

A: Certainly credit card debt is a big issuefor people of any age and income level. A lot of that happens whenyou're young: People get in trouble and over time, can't dig out.Also, folks in the lower income category may be underbanked orunbanked [have no checking accounts]. They may have had some badcredit. People get in trouble with student loans; some don'tunderstand the implications of taking them. Right now, 11% ofstudent loans are in one-year default. That's really high.

Q: How well do these groups know how to managethe money they earn?

A: We found a higher percentage ofAfrican-American and Hispanic employees in “the cycle of lowerfinancial wellness,” which you can see in non-minority groups too.For instance, if your parents didn't have resources to contributeto your college education, you paid for it through student loans.So you start off with higher loan and credit card debt, and maybenot as much knowledge of how to manage your money. Then that slidesinto delayed or no homeownership. It's a kind of slipperyslope.

Q: Is it reasonable to suppose thatAfrican-Americans and Hispanic employees are low in financialwellness because they don't have access to financial education inschools and their communities?

A: Yes. In New Jersey, for example, in order tograduate students in public schools are required to have only onesemester of a finance-based course — and a lot of schools let themtake it online. I don't think that's enough. Financial literacyshould be incorporated into math classes and health classes. Weshould be teaching kids about that [throughout all their school]years.

Q: What can be done to reduce the high level ofdistress and disappointment with financial services brought by thefinancial crisis?

A: Any information that advisors can offerincorporating financial wellness issues into their practice isgoing to help them build relationships with prospective clients andcurrent clients.