Asset Building News Week, July 21–25

article | July 25, 2014

C The Asset Building News Week is a weekly Friday feature on The Ladder, the Asset Building Program blog, designed to help readers keep up with news and developments in the asset building field. This week's topics include financial services and knowledge, poverty, and jobs.

Financial Services and Knowledge

The Asset Building Program released a new publication this week by Terri Friedline and Nic Schuetz, both of the University of Kansas School for Social Welfare. The report looks at the potential of incorporating Child Development Accounts into other early childhood interventions and programs. As they put it, "CDAs are a preventive, economic intervention that can complement early childhood interventions and may improve children's opportunities for educational and economic advancement."

Danielle Kurtzleben for Vox analyzes some new data on young people's feelings about stocks and concludes: "But all of this fretting inspires the question of why we are so obsessed with a generation's financial know-how. It's not just that Millennials have been dumped from school into the longest downturn since the Depression, with stagnant wages for many. It's that the retirement system we have waiting for them is broken. It's complicated, it has low participation rates, people are not saving nearly enough, and for many, it shifts the risk and responsibility of not-living-in-squalor in one's golden years squarely onto the worker and that worker's investment abilities."

For The Hill, Benjamin Goad and Megan Wilson write that "the financial industry is clashing with the Obama administration over forthcoming regulations that are intended to protect college students from excessive bank fees." According to Michael Corkery and Jessica Silver-Greenberg writingfor the New York Times, "an increasing number of the nation's biggest lenders are doing just that, devising low-fee banking especially for customers with troubled finances. The products, including bare-bones bank accounts and prepaid debit cards, are hardly big money makers — in some cases, the banks barely break even."

Advocates on issues of domestic violencehave a unique perspective to contribute on the importance of financial knowledge: "Financial abuse, whether you're talking about ruining her credit, getting her fired or hiding the money, is just as effective in controlling an abused victim as a lock and key. If your credit has been ruined, you can't get an apartment. If you've been fired twice because your abuser harasses you at work, you can't get a job."

Jobs and Poverty

In the National Journal, Sophie Quinton notes the important role that car ownership plays for people given the reality of where jobs are located: "The suburbs are home to many low- and middle-income jobs that can be hard to reach without a car. Accessing these workplaces is at best time-consuming and at worst impossible for low-income residents of urban neighborhoods." Danielle Kurtzleben takes a step beyond at Vox: "To the extent that public transit combats that segregation, it can be a boon to low-income children beyond their parents getting new jobs […] Improving transportation infrastructure is a way of making communities less-isolated, and breaking down some of the barriers of stratified neighborhoods."

David Wheeler writes for The Atlanticabout the faltering middle class lifestyle open to religious clergy. "Of the seminary students who graduated in 2011 with a Master of Divinity degree (the typical degree for a full-time pastor), more than 25 percent accrued more than $40,000 in educational debt, and five percent accumulated more than $80,000 in debt. Those lucky enough to get a full-time job as a pastor will join a profession whose median wage is $43,800, according to the U.S. Department of Labor."

Annie Lowrey, for New York Magazine, sees some positive elements in Paul Ryan's latest anti-poverty proposal, but expresses some concerns about the details; she argues that it "threatens to punish the poorest and most unstable families for their poverty and instability." Reihan Salam, for Slate, sees the potential upside of Ryan's proposal to combine federal grants into a single pot of flexible money: "People with low or no earnings, in contrast, face diverse obstacles...Sure, you could give both kinds of people food stamps and call it a day. Or you could recognize that one-size-fits-all programs don't do justice to the ways in which individual circumstances vary."

Kyla Calvert for PBS looks at new data from the Annie E. Casey Foundation showing that more U.S. families with children are struggling with poverty and high levels of job insecurity.

Meanwhile, an analysis of compensation data at Bloomberg Businessweek"shows little correlation between CEO pay and company performance." The data of 200 highly paid CEOs lined up against metrics like company revenue and stock returns show an apparently random pattern.

Quick Hits

New research from Cornell looks at the likelihood of black and white homeowners returning to renter status and finds that: "African-American homeowners who purchased their homes in the late 1960s or 1970s were no more or less likely to become renters than were white owners. However, emerging racial disparities over the next three decades resulted in black owners who bought their homes in the 2000s being 50 percent more likely to lose their homeowner status than similar white owners."

The Asset Funders Network is hosting a webinar on Thursday, July 31 at 1pm Eastern to learn about key findings from "The Web of Wealth: Resiliency and Opportunity or Driver of Inequality?" a new brief in the Institute on Asset and Social Policy's Leveraging Mobility Series. The webinar is designed to give participants an understanding of the role of extended family wealth networks in providing resiliency and opportunity, as well as how wealth networks drive inequality. Register herefor the webinar and check out the full report here.

Jimmie Gates for the Clarion-Ledger reports that a group of privacy advocates, Democratic lawmakers, and low-income individuals are raising concerns about the design of a new Mississippi law that would implement a drug testing and screening program for applicants to the state's TANF (cash welfare) program.

Gene Sperling outlines the inequities baked into the U.S. tax code in an op-ed for the New York Times. After detailing examples of the imbalance, he asks: "If the main justification for savings incentives is to help workers overcome shortsightedness about the benefits of long-term accumulated savings, how is it defensible to focus so many of our resources on those best poised to save anyway?"

Last Friday, our Aleta Sprague had an op-ed run in The Hill describing the ins and outs of the REDEEM Act which would help address a few of the ways in which poverty and disparities in incarceration are a self-perpetuating cycle.