Much of the asset building field gathered this week in Washington, D.C. at the Assets Learning Conference. The event, hosted by CFED, brought together experts from around the country to discuss ideas and best practices in the field. The event generated a significant amount of buzz on social media, which you can find on Twitter using #ALC2014. At the conference, CFED unveiled a new data mapping tool to allow users to find the level of financial insecurity in cities and counties across the country. Writing in The Upshot, Patricia Cohen pulls the big takeaway, “Nearly Half of Americans in Major Cities are in [a] State of Financial Insecurity.”
The Census Bureau released on Tuesday its annual report on income and poverty in the United States for the year 2013. According to The New York Times, the percentage of the population living in poverty declined slightly compared to 2012, but the actual number of people living in poverty remained statistically unchanged. Bob Greenstein of the Center on Budget and Policy Priorities offered his take on the numbers in the Huffington Post: “The economy strengthened in 2013, but too slowly to improve the living standards of many middle- and low-income Americans.” There was no change in the median household income in 2013. Before the report was released, Jared Bernstein stuck his neck out and offered predictions on what the Census would find. He was largely right.
Besides the report on income and poverty, the Census Bureau also released the results of the 2013 American Community Survey. Sam Roberts got an advance copy of the data for The New York Times and explained the findings’ significance for New Yorkers in particular: the gap between Manhattan’s rich and poor is the greatest of any County in the U.S.
Another report released this week (not by the Census Bureau) found there to be another significant and tangible effect of widening inequality in the U.S.: mounting pressure on states’ bottom lines. According to the report by Standard & Poor’s, rising income inequality is responsible for at least a part of the slowdown in state tax revenues. One of the authors of the report summed up one reason this finding is so important: “Rising income inequality is not just a social issue” anymore; “It presents a very significant set of challenges for the policymakers.” The AP covered the report, syndicated here in the Washington Post.
Wallethub analyzed the tax systems of all fifty states in order to compile a list of the “most and least fair state tax systems.” The analysis takes into account the disparity of tax rates for the top 1 percent of earners and for middle- and low-income earners. Montana has the most fair (that is, least regressive) tax system, while Washington State has the least fair. Danny Vinik offered highlights in the New Republic.
The House passed by a voice vote H.R. 3374, the American Savings Promotion Act, which would remove federal barriers for financial institutions to set up prize-linked savings programs.
Another piece of legislation didn’t fare as well this week. The Paycheck Fairness Act, which aims to narrow the gender pay disparity, was blocked by a minority of Senators. Jonnelle Marte explained “how the pay gap leads to the retirement savings gap.”
In a blog post, Willie Elliott and Melinda Lewis of the Assets and Education Initiative distilled the main points of a new report on Canada’s children’s savings account program. Among the most important things that Canada’s experience can “teach us about child savings accounts” is quite simply that they work: “Canadians, including low-income families, are saving for higher education at a significantly higher rate and in greater amounts than in the U.S.”
On the other side of the balance sheet, debt remains a big issue for many American families. A recent report by the GAO has sparked concern about the extent of student debt owed by Americans over 65. One of the main problems is that the Social Security benefits of some of these seniors are being garnished to pay back the loans, pushing families into poverty. Shahien Nasiripour in the Huffington Post emphasized a few of the most distressing findings of the report, including that “more than half, or 54 percent, of federal student loans held by borrowers at least 75 years old are in default.”
The Education Department is not the only actor employing aggressive tactics to recover debt obligations. Private debt collectors are exploiting what Paul Kiel described this week as “outdated laws” that enable them to garnish wages even beyond the point at which families can afford to pay for regular living expenses.
The Senate Finance Committee held a hearing on Tuesday titled “Retirement Savings 2.0: Updating Savings Policy for the Modern Economy.” You can watch the recording here.
Catherine Rampell surveyed the current evidence about why “many life milestones are out of Millennials’ reach.”
Registration closes next week to attend the public meeting of the President’s Adivsory Council on Financial Capability for Young Americans, which will be held on October 2nd.