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The Ladder

A Blog from New America's Asset Building Program

Asset Building News Week, June 25-29

Published:  June 29, 2012
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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 homeownership, financial security, and inequality in education.

Promoting Homeownership

“Imagine every family in the world – even those making less than $2 per day – suddenly having potential access to sturdy, affordable housing.” That’s the vision of Bill Gross, a social innovator with a tech background, who has launched an initiative to build modular housing units for families in the developing world for under $2,000 total. In India, Worldhaus aims to create an “affordable housing boom”: 200 new houses by the end of the year and one million by the end of this decade. Closer to home, June is National Homeownership month, and, like families in the developing world, for many the goal of homeownership is defined by affordability and adequate savings. Check out this blog post from the USDA about their work to support rural homeowners.

Financial Security

Bankrate’s survey of American’s opinions on financial security revealed disparity along gender, political, racial, and geographic lines. New data on precautionary savings activity show that 28% of Americans possess no emergency savings, and 49% do not have enough to cover three months worth of expenses. We hosted an event this week discussing one possible way to help Americans save for emergencies: develop a postal savings bank to support small-dollar savings. Sheldon Garon spoke to an audience of Congressional staff and others on Tuesday about the potential for postal savings to simultaneously address the fiscal problems of the USPS and promote savings. Our friends at the National Disability Institute authored a series of guest blog posts this week discussing several key lessons advocates for people with disabilities have taken from the asset building field. Read part one and part two of the series and check back for the third and final post later today. Also this week, the OECD unveiled its Economic Survey of the United States, within which the organization recommended that the U.S. focus on shrinking income inequality and long-term unemployment through an increase in funding for higher education and worker training.

Inequality in Education

“A top-scoring, low income student has about the same chance of completing college as a low-scoring, high income student” reports a recent analysis from the Economic Policy Institute. These troubling statistics complicate the traditional notion of the meritocratic American educational system, where the highest achieving students from all economic backgrounds have equal opportunity for future success. Addressing college affordability and disparities in college savings are approaches that can help close this gap. In this vein, the Department of Education is conducting a large-scale demonstration project that will give 10,000 low-income high schoolers access to college savings accounts. Read Reid Cramer’s blog post on the announcement and stay tuned for our final comments to the Department of Ed early next week.

Quick Hits

We are pleased to be hosting an event July 11th to commemorate the release a special issue of the Washington Monthly, entitled “The Future of Success.” Our event “Jobs are Not Enough: Why are the Campaigns Ignoring Americans’ Lost Wealth?” will feature several of the contributors to the issue and look at declining wealth, personal debt, inequality in the tax code, and the effect of assets. Join us in person at 9:15 Tuesday morning or online for the live webcast. 

Multiple sources this week indicate the continued growth of America’s racial wealth gap. Census Bureau data show that while the median net worth of white Americans fell 15% between 2005 and 2010, the net worth of black, Latino, and Asian Americans fell 55%, 56%, and 54%, respectively. Because a house is typically a family’s single largest investment and because black and Latino households are almost twice as likely to have been affected by foreclosure as white households, these data reflect the way the housing crisis translated into greater declines in wealth for households of color.

The 7th Annual Underbanked Forum discussed the desirability of two opposing small-dollar credit models: One based on profit, the other on consumers. As Gregory Mills writes on the Urban Institute blog, the consumer-focused model originates from the idea that “loan products can be designed to enable repayment and thus avoid the debilitating cycle of loan rollover and borrower dependency.” Pamela Chan also attended the Underbanked Forum and presented on the “market potential and consumer preferences for small dollar savings products among lower-income consumers.”

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