Economic (In)Security: Report Released
I wanted to post about a couple of segments that caught my attention from the recent report "Economic (In)Security: The Experience of the African-American Latino Middle Class." The report says:
"African-American and Latino families are less likely to be part of the middle class, and those who have entered the middle class experience significantly less economic security. This stark reality is dramatically out of sync with where we as a nation need to go in the future."
"Past investments to build a middle class have not benefited African Americans and Latinos to the same extent that they have benefited whites."
My own family is a case in point, with the GI Bill being a turning point for my family's access to education and thus, family-sustaining employment. Clearly, not all families benefited equally..and this was only one, time-limited policy to build the middle class.
Economic (In)Security: The Experience of the African-American Latino Middle Classes, followed the first report By a Thread (see previous blog). The report includes an Executive Summary...more detailed description of the findings around assets, education, budget, and health care...and three policy recommendations: boosting homeownership and savings, reducing debt and stopping discriminatory lending practices, and expanding access to higher education. For the full report, click here.
Do the findings ring true for your experience? Do you have other policy recommendations to propose to close the economic disparities that remain along racial and ethnic boundaries?
I imagine that middle class
I imagine that middle class attainment, which 41% of Latino families and 33% of African American families are at high risk of slipping out of, is even more precarious given increasing household costs. We’ve recently learned that food costs are rising at the fastest rate since 1990, the cost of gas has reached a record high, and housing costs are out of reach for many and access to mortgages has tightened. How will those families who are at highest risk of slipping out of the middle class fare over the next year or two? And how can public policy and private industry respond to secure those at risk, a set that both groups have a vested interest in?
Clearly a need exists for programs and policies – applied fairly to prevent a continued 'legacy of persistent inequalities' - to create opportunities for households to attain middle class security. However, in light of the increasing precariousness of middle class security, there also needs to be a response to maintain a level of financial security for those households who have attained the assets, education and income to place them into this class. Without a focus on maintaining economic security, families on the edge will always be a job loss, illness or car breakdown away from slipping out of the middle class.
Policies and programs should encourage the creation of an economic safety net and discourage the erosion of assets. I’m intrigued by the report’s recommendation of expanding matched savings accounts to help working families ‘weather a reduction of income and plan for the future’ and would be interested to hear thoughts on what such a program might look like. Creating a financial safety net for families on the edge of middle class may be the tool that is needed to prevent them from slipping further. Although, to permanently secure a foothold in the middle class, families will need to continue to have access to opportunities to build their education, assets, income, etc.
Thanks, Jennifer, for your
Thanks, Jennifer, for your comment. You raise some good questions. I have similar concerns about what the next few years will look like in terms of the growing wealth divide. The low savings and high debt rates are disturbing. You mentioned an interest in learning more about individual development accounts. On the program front, United Way funds an IDA initiative called Funding Futures. Your timing is good. My colleague recently posted a blog on individual development accounts. Here is a link (link to blog).
On the policy front, just underway in the Commonweatlh of Massachusetts is the establishment of the Asset Development Commission. This Commission looks at policies that encourage the building of wealth and assets...to make it easier to get into the middle class and stay there! United Way of Massachusetts Bay and Merrimack Valley holds a seat on this Commission, so stay tuned for more on this.
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