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 gaps in wealth and income, welfare, and savings.
Gaps in Wealth and Income
A new study
shows that New Jersey’s wealth gap is the largest it’s been since the Great Depression. This discovery has caused policymakers in the state to focus attention on efforts to address this polarization of wealth. Aparna Mathur of the American Enterprise Institute suggests continuation and expansion of the Earned Income Tax Credit, while others such as Legal Services President Melville D. Miller Jr. point to exorbitant upper-echelon incomes which drive prices up. Regardless, these conversations are indicative of a larger national debate. The study reports that, "New Jersey’s experience tracks that of the country as a whole."
Janitors in Houston, Texas have been on strike since May of this year and are asking for one thing: a living wage. Strikers of the Service Employees International Union (SEIU) are proposing an hourly wage increase from $8.35 to $10 per hour over the next three years. This piece from Marketplace’s Wealth and Poverty desk
investigates a few personal accounts of this struggle, as well as the lack of responsiveness by the companies who depend heavily on these janitorial staff to keep their buildings functioning. (Also a hat tip to Greg Kaufmann at The National
who covered the janitors’ strike in detail two weeks ago.)
A new report from the Children’s Home Society of Washington
evaluates different strategies for improving bank access and “building personal financial safety nets” among recipients of TANF in the state of Washington. Among the striking findings, the report notes that just 12% of TANF recipients have their benefits deposited into an existing bank account. The rest pay 85 cent transaction fees every time they access the funds at ATMs, which siphons off their money to the tune of a combined $1.2 million per year. The report also finds that low-income families have both the desire and capability to save, if the opportunity is present. The report offers a promising set of policy solutions which would increase TANF families’ access to manageable accounts. Rachel Black weighs in
on the importance of bank accounts for TANF recipients.
“The first thing needed if we’re to get people out of poverty is more jobs that pay decent wages,” argues Peter Edelman in this recent New York Times piece
. He also points to “the near disappearance of cash assistance for low-income mothers and children” as a reason why poverty remains so persistent in the United States. Only when all Americans, especially the middle class, begin voting in their own economic self-interest, Edelman argues that the political system will truly become responsive to the needs of those struggling in or near poverty. Read more about the piece on our blog
In this Huffington Post piece
, Jon Stein points out that many Americans (not only those with lower levels of income) have trouble saving. He points to work by New America Foundation Senior Research Fellow Phillip Longman which shows that “44% of Baby Boomers and Gen Xers lack enough savings to fund even a modest life in retirement.” This problem also stems from a lack of trust in Wall Street investment entities.
In June, we hosted an event, “Saving (at) the Post Office
,” which explored the idea of the U.S. Postal Service providing small-dollar bank accounts to consumers and in the process becoming less of a burden on U.S. taxpayers. Joe Corbett, the USPS’s chief financial officer, says this idea might become feasible in as little as five years. Check out this article from The American Banker
On Monday, President Obama signed the Helping Expedite and Advance Responsible Tribal Homeownership (HEARTH) Act
, which “allows American Indian tribes to lease restricted lands for residential, business, public, religious, educational, or recreational purposes without the approval of the Secretary of the Interior.” The act is expected to result in tribes holding greater economic self-determination, as well as incentivizing business growth and homeownership in tribal areas.
NPR’s Planet Money
team successfully opened an off-shore company to demonstrate the ease with which companies can find ways to harbor funds in tax havens. Rachel Black points out the absurdity
that this process is easier than the process that families must go through to apply for the Earned Income Tax Credit.
Meanwhile, the Treasury Department is out with a new report showing the threat that identity theft poses to the tax system, as criminals exploit technology used to make the system convenient to steal billions, the Boston Globe
has the story.