The racial wealth gap has been a hot topic lately on our blog.  The United States remains one of the wealthiest countries in the world, yet escaping poverty and achieving prosperity remains out of reach for millions of Americans.  Too many people of color, striving to make a better life for themselves and their families, face significant barriers to building wealth and less access to opportunities that are widely available for Whites.

This 3-minute video from the Urban Institute sheds more light on the issue with a simple, compelling illustration.  This animation is based on research by Eugene Steuerle, Signe-Mary McKernan, Caroline Ratcliffe, and Sisi Zhang of the Urban Institute.

Click here to read OK Policy’s paper, ‘Closing the Opportunity Gap: Building Equity in Oklahoma.‘

Watch This Too:

• The New Jim Crow
• The Line
• Just the Facts
• Illegal

Last week, I attended CFED’s 2012 Assets Learning Conference, a biannual national gathering of practitioners, researchers, and advocates working to promote economic opportunity and fight poverty for low- and moderate-income Americans through savings, investment and ownership. Following the conference, I sat down with Bob Friedman, CFED’s founder, Board Chair and General Counsel, to discuss the state of the asset building field.

David Blatt: You’ve been active in this field a long time. What do you see as the biggest changes in the area of asset-building today compared to 15 or 20 years ago.

Bob Friedman: First of all, it’s so much bigger. We did our first conference 16 years ago, which was an IDA (Individual Development Account) learning conference and there were 150 people.  We just finished this conference, where we had 1,200-plus.  Today we see so many more programs, people, policies across the field.  Even the classes of assets we talk about has expanded.  It was always homes, businesses and education. Now it’s citizenship, assistive technology for people with disabilities, emergency savings as well.  Also, we now cover a larger spectrum of financial security – learn, earn, save, invest, protect. The innovation is burgeoning.

continue reading Interview with Bob Friedman: Our asset policies 'reward the rich, miss the middle, penalize the poor'

These comments were excerpted from a speech given by Richard Cordray, Director of the Consumer Financial Protection Bureau, at the 2012 Assets Learning Conference, a biannual gathering on asset-building hosted by CFED (Corporation for Enterprise Development) in Washington D.C.

The recent financial crisis and the deep recession that’s followed in its wake delivered a devastating blow to American households.  In recent years we’ve seen household wealth shrink by trillions of dollars and incomes decline.  As we continue to dig out from the crisis, the Census Bureau found that 46 million Americans were living in poverty in 2011.  While these numbers are striking, they do not convey the larger toll on people of low and moderate income.

It is especially expensive to be poor.  Time is money and when the compensation for your time is meager, you can work long hours and still produce insufficient income.  At the same time, the marketplace is hostile to those in poverty, who often pay higher prices for consumer goods, including financial products and services.  These factors put disproportionate burdens on people’s lives.

continue reading Richard Cordray: "The marketplace is hostile to those in poverty."

Our friends at Prosperity Works have created an excellent video on the ins-and-outs of IDAs.  What is an IDA?  It is not, as some Facebook users suggested, internet dating advice or the International Department of Awesome.  IDA stands for individual development account.  It’s a matched savings account for low and moderate income earners to save for important assets like a college education, a home, or a business.  Watch this animated short video to find out more or click here to find an IDA near you.

View other clips from OKPolicy’s “Watch This’ video series:

Elderly parole

Long term unemployment, 1967-2011

Packed Oklahoma prisons, rising costs

Creativity & Learning

Access to credit has become a necessity for modern American living, touching virtually every aspect of our lives. Many consumers need credit to buy a house or a car, get an education, pay for medical expenses, or start a business.  ‘Credit’ is a generic term for an array of financial products and services that involve the borrowing of money and ‘affordable’ means terms of credit proportionate to a borrower’s ability to repay.  This post explores the critical role of credit in helping Oklahomans maintain financial security and build assets for a prosperous future, based on a newly released paper from Oklahoma Assets.  Oklahoma Assets advocates for policies and programs that can help create a more inclusive economy – one in which financial security and economic opportunity is available, not just to some, but to all Oklahomans.  Their new release, ‘Affordable Credit in Oklahoma: Asset-building and Financial Security‘ is available on their website along with their first brief on the importance of savings.

Affordable credit plays a pivotal role in a household’s capacity to maintain financial security and build assets. Lower income earners in particular need the flexibility that credit affords to handle emergencies, make ends meet, and avoid high cost credit products that could set them back even further.  When households without access to affordable credit face emergency situations that threaten their ability to work—like illness or car repairs—they either take the credit they are offered, often at prohibitive rates of interest, or face unemployment and insolvency.

continue reading Financial security for Oklahomans: The critical role of affordable credit

What’s up this week at Oklahoma Policy Institute? The Weekly Wonk is dedicated to this week’s events, publications, and blog posts.

This week at OK Policy, we interviewed Steven Dow about recent controversy at the Oklahoma Commission for Human Services.  We pointed out that state leaders can’t rely on growth revenue to fund infrastructure repair and other priorities if they continue to cut (or even eliminate) the income tax.

Former State Treasurer Scott Meacham explains on the OK Policy blog that Oklahoma’s Rural and Small Business Tax Credit initiatives end up costing the state hundreds of millions in tax revenues.  The blog also featured a post on asset-building as an anti-poverty strategy.  Our director David Blatt was a guest this week on Studio Tulsa, discussing the importance of the income tax in adequately funding state government and essential services for Oklahomans.  Oklahoma Policy Institute’s director was also quoted in two articles this week on federal income tax liability for low-income households and the role of unemployment benefits during a recession.

In the Know, Policy Notes

• Tthe Economix blog examines whether it is more cost-effective to direct resources to college students or to preschoolers and kindergarteners in order to increase college completions over the longer term.
• Researchers at the University of Colorado at Boulder discover that immigration is correlated with falling crime rates.
• Bloomberg reports on how municipalities and state agencies, including the Oklahoma Turnpike Authority, are taking advantage of historically low interest rates to refinance bond issues and save money.
• The National Employment Law Project warns that if Congress doesn’t renew extended unemployment insurance by the end of this year, we risk plunging millions into deeper financial crisis and putting yet another obstacle in the path of economic growth.
• The National Academy of State Health Policy released a paper detailing efforts by state agencies to identify and act on racial and ethnic health disparities.

Numbers of the Week

• 16.43 inches – Amount statewide average precipitation was below normal this water year (October 1-September 30), the 2nd driest year on record for Oklahoma.
• 1,865 – Number of foreclosures in Oklahoma in August, down 5.8 percent from the same month in 2010
• $31,600 – Minimum amount in salary and fringe benefits earned by a first-year Oklahoma public school teacher with a bachelor’s degree, 2011-2012
• 80.3 – Number of primary care physicians per 100,000 people in Oklahoma, compared to 120.5 nationally.  Oklahoma ranked 49th in availability of primary care physicians, 2010
• 29 percent – Percentage of Oklahoma’s K-12 children who are on their own after school, 2009

Everyone manages money almost every day.  Often we wonder how to better manage our money when it seems there is never enough.  CareerBuilder surveyed 3,900 American workers and found that more than six-in-ten workers – 61 percent – live paycheck to paycheck.  Many families have no way to cover day-to-day expenses if their income drops or disappears.  Unemployment, medical crisis, or car repairs can put a family into debt – or deeper into debt if they already owe large sums.  Such families are “asset poor.”  Michael Sherraden, director of the Center for Social Development at Washington University and author of Assets and the Poor: A New American Welfare Policy, points out that assets affect us financially, socially and psychologically in a way that income alone does not.

Asset-building is beginning to gain traction as an anti-poverty strategy.  Assets for Independence (AFI), a federal grant program that enables nonprofits and government agencies to incorporate assets-based principles into their programming, recently launched the ASSET Initiative.  The ASSET Initiative hopes to expand the reach of the asset-building message and encourage more collaboration across government agencies who do anti-poverty work.  Another such initiative that is picking up steam locally is Oklahoma Assets, an organization whose mission is to advocate policies and programs that can help create a more inclusive economy – one in which financial success, economic stability, and opportunity is available, not just for some, but for all.

continue reading Six strategies to promote financial security for families

Oklahoma Assets will host the third in a series of webinars on asset-building next Thursday, June 23rd from 1:00 to 2:00 pm CDT.  The 60-minute webinar, “Individual Development Accounts (IDAs): Programs and Policies that Work!” will show how IDAs offer individuals with low income and limited resources the opportunity to save money for education, a small business, or a home.  IDA participants enjoy matched savings, peer support, financial education and training specific to their savings goal.  Click here to register, free of charge.

continue reading Upcoming Event: Webinar on Individual Development Accounts (IDAs): Programs and Policies that Work!, June 23rd

A few weeks ago I had the opportunity to attend a conference hosted by the Ford Foundation and Howard University’s Center on Race and Wealth.  The three-day meeting was the first annual gathering of a diverse group of representatives supported by grants from the Ford Foundation’s Building Economic Security Over a Lifetime initiative.  The initiative promotes programs that help low-income families achieve and maintain economic stability throughout their lives.  The conference focused on a particular and troubling aspect of economic achievement in the United States:  the racial wealth gap.

Few ideas are more evocative of the American dream than wealth and economic security, yet opportunities to accumulate wealth and secure income have never been equally distributed.  In virtually every measure of wealth, non-white households are falling behind.  For example, homeownership, the primary vehicle for building wealth for most Americans, is more attainable for white households than their minority counterparts.  According to the U.S. Census, in 2008 only 47.5% of African-Americans and 48.9% of Hispanics owned their own homes, compared with 74.9% of whites.   White households continue to accumulate more savings, more assets (vehicles, houses, businesses), and more wealth, consistently maintaining larger net worths than minority households.  While some of this gap is attributable to higher incomes and educational attainment, it takes a longer view of history to understand and explain its persistence.  Historically, some of the largest expansions of American wealth were achieved through sacrifices disproportionately shouldered by the poor, the disenfranchised, and communities of color.

continue reading Wealth and Worth: What’s race got to do with it?

Oklahoma Assets will host a 60-minute webinar on promoting savings in Oklahoma on Thursday, March 24 from 2:00 to 3:00pm CDT.  The presentation, ‘Taking it to the Bank: Promoting Savings in Oklahoma,’ features expert speakers via conference call and on-line content exploring policies and programs that promote savings for low-income individuals and families.  Register for the webinar here.

This event is the first in a series of webinars produced by Oklahoma Assets, a coalition that aims to identify and strengthen programs and policies that help Oklahoma residents achieve economic security.  For more information about this event and the continuing series click here or email info@oklahomaassets.org

continue reading Upcoming Event: Webinar on promoting savings in Oklahoma