South Texas Cities Rank Among Nation’s Worst for Financial Health, WalletHub Analysis Shows

South Texas cities such as San Antonio, Laredo, and McAllen rank among the worst in the U.S. for financial health, according to a recent analysis by personal finance site WalletHub. The study, published on April 5, 2024, evaluated 180 U.S. cities based on metrics including median household income, poverty rates, and access to banking services. San Antonio placed 168th out of 180 cities, while Laredo and McAllen ranked 173rd and 175th, respectively, according to the report.

What Metrics Did WalletHub Use to Determine Financial Health?

WalletHub’s analysis focused on 24 factors, including median household income, poverty rate, unemployment rate, and the percentage of residents with access to a bank account. The study also considered the cost of living, housing affordability, and the availability of financial education programs. “Cities with lower median incomes and higher poverty rates tend to score worse, as these factors limit residents’ ability to build savings or access credit,” said WalletHub analyst Sarah Lin in a statement accompanying the report.

San Antonio’s median household income of $56,500 in 2023, according to U.S. Census Bureau data, is below the national average of $70,700. Laredo and McAllen, both located in deep South Texas, have median incomes of $48,200 and $49,100, respectively. The report also noted that 18% of San Antonio residents live below the poverty line, compared to 23% in Laredo and 22% in McAllen.

Why Do These Cities Struggle With Financial Health?

Experts point to systemic economic challenges in South Texas, including limited access to high-paying jobs and underfunded public services. “Many residents in these cities work in low-wage industries such as agriculture or retail, which offer little room for financial stability,” said Dr. Maria Gonzalez, an economist at the University of Texas at San Antonio. “Additionally, rural areas often lack the infrastructure for financial institutions, making it harder for residents to open bank accounts or secure loans.”

The WalletHub report highlighted that 12% of San Antonio residents, 15% of Laredo residents, and 14% of McAllen residents are unbanked, meaning they do not have a checking or savings account. This lack of access exacerbates financial instability, as unbanked individuals often rely on costly alternative services like payday lenders.

How Do These Rankings Compare to Other U.S. Cities?

San Antonio, Laredo, and McAllen ranked near the bottom of WalletHub’s list, which included cities such as New York, Los Angeles, and Chicago. For example, New York City ranked 12th, with a median income of $77,400 and a poverty rate of 15%. Chicago placed 18th, with a median income of $72,100 and a poverty rate of 12%. In contrast, Salt Lake City ranked first, with a median income of $85,300 and a poverty rate of 8%.

WalletHub’s analysis also compared the financial health of cities with similar population sizes. San Antonio, with a population of 1.5 million, fared worse than cities like Austin (population 980,000), which ranked 34th. Austin’s median income of $82,600 and poverty rate of 10% contributed to its higher standing.

What Are the Implications for Residents?

The financial challenges in South Texas could have long-term consequences for residents, including reduced economic mobility and increased reliance on public assistance. “Families in these cities often struggle to save for emergencies or invest in education, which limits their ability to break the cycle of poverty,” said Gonzalez. “Without targeted interventions, these disparities are likely to persist.”

Local leaders have begun addressing these issues. San Antonio Mayor Ron Nirenberg announced in March 2024 a initiative to expand financial literacy programs and increase access to affordable banking services. Laredo and McAllen have also launched efforts to attract businesses that offer higher wages, according to local news reports.

As the debate over economic inequality continues, the WalletHub analysis underscores the need for policy solutions tailored to the unique challenges of South Texas. “This isn’t just about numbers—it’s about the people who live here and their opportunities for a better future,” said Lin.