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The Ladder

A Blog from New America's Asset Building Program

The Landscape for Economic Empowerment in 2011

Published:  October 27, 2010

The Asset Building program’s Maria Sotero spoke yesterday at the Earn It! Keep It! Save It! Annual Mini-Conference, a gathering of 100-plus Bay Area advocates of economic empowerment who convened to discuss best practices in free tax preparation and plans for the coming year.

Maria’s presentation on the economic empowerment outlook in 2011 highlighted several exciting successes for asset builders in California, from the launch of the Kindergarten to College pilot in San Francisco to the success of Payday Plus SF, which provides an alternative to traditionally exploitative small-dollar loans.

Highlighting the importance of presenting asset building realities to service providers on the ground, conference attendees were audibly surprised to learn of the structural barriers to savings facing some Californians, such as the $2,000 limit on savings for CalWORKS recipients.

They were also surprised to learn that although the federal government spends about $700 billion annually encouraging Americans to build wealth, only a small percentage of that reaches those who make less than $40,000 annually and are most likely to need a financial safety net.

Despite such challenges, the conference took an optimistic tone as Maria spoke about the policy outlook this coming year in California and nationally. The U.S. Treasury is currently working out the details for creation of Bank on USA, thanks to the program’s success in California and other states in banking Americans who previously had to rely on fringe financial services.

This year in California promises further efforts to create Auto-IRA accounts to help Californians save for retirement, implement Banking Development Districts to reach unbanked families, and increase outreach and education about the EITC, a tax credit for working families that too many do not claim.

Thinking about the coming year prompted me to reflect on what I’ve learned since joining the Asset Building program this summer. While I knew that assets were important, I had no idea of the unique challenges facing advocates of economic empowerment, or the wide range of unique policies that are constantly being innovated to meet those challenges and help more Americans permanently exit poverty.

I had no idea that so many Californians were unbanked, or that payday lenders create such a dangerous debt trap. I didn’t know about limits to savings within public assistance programs. But since learning about these barriers, I’ve also learned that the solutions to poverty aren’t limited to welfare, as I once imagined.The innovation within the asset building sphere has created a range of ideas that have the power to transform traditional assumptions about poverty policy, and that’s what makes the future look bright.

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