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The Ladder

A Blog from New America's Asset Building Program

Asset Building News Week, May 7-11

Published:  May 11, 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 the Millennial generation, homelessness, economic mobility, public benefits, and banking innovation.

The Millennial Generation

Millennials (born between 1981 and 2000) are making headlines regularly as they navigate young adulthood in the midst of a struggling economy. New data show that just half of college grads who graduated between 2006 and 2011 are working full time. As NPR points out with 1.5 million 2012 grads entertaining the “job seeking” pool in the coming weeks, things aren’t looking too bright. However, with all the hand-wringing over the prospects of college-educated Millennials, it’s easy to forget that a college education still serves as a buffer from greater financial hardship. Nona Willis Aronowitz at GOOD Magazine argues that pitying young adults who have moved back in with parents is a waste of time – these are kids whose parents can afford to support them through the recession. Instead, she writes, we should be more concerned about young adults whose families are lower-income and therefore don’t have the financial resources to help them over the transition to adulthood by giving them a place to live. 


Minnesota Public Radio reports that, despite improvements in housing infrastructure on Minnesota’s Indian reservations, homelessness remains a widespread problem. Researchers found that “more than 600 people interviewed fit the strict federal definition of homeless, while the other 1,500 were doubled up with friends or relatives, usually in overcrowded condition.” Closer to home, the Washington Post reports that the number of homeless families in D.C. has “soared 18 percent,” that shelters are at capacity, and the loss of federal funding is squeezing the city budget to accommodate the growing numbers. In El Paso, Texas, at least 3,000 public school students are homeless. Advocates and school administrators cite high unemployment, domestic violence, and rising housing costs as some of the key drivers.

Economic Mobility and Inequality

Pew’s Economic Mobility Project has new data out on rates of economic mobility by state. Their infographic illustrates that some states, primarily those in New England and the Midwest, have higher rates of economic mobility (defined here as the ability to move up the earnings ladder during prime working years, 35-49). NPR has more analysis of the data. A Wall Street Journal press release shares findings from a Wellesley economist that studies the role of income inequality on early non-marital childbearing. “They found that poor teens were more likely to give birth if they lived in a state with high income inequality.” The study authors conclude that teenage parenting is a symptom, not a cause of poverty. One author explained, "If a young woman sees little chance of improving her life by investing in her education and career skills, or by marriage, she is more likely to choose the security, immediate gratification and happiness of parenthood. Our work captures this idea in a standard economics model of decision-making."

Restrictions on Public Benefits

Colorlines has a long, but engaging piece up exploring the motivation to conflate drug use with poverty. Seth Wessler writes that legislative moves like imposing drug tests on welfare applicants are designed “to stigmatize poor people and, thus, provide political cover for safety net cutting in a time when millions of Americans need it more than ever.” An op-ed from a Pennsylvania woman entitled “Gov. Corbett's food stamp change hurts the working poor like me” articulates many of the flaws of asset limits we’ve talked about recently.  She explains, “A household such as mine (without an elderly or disabled member, and I am under age 60) is limited to just $5,500 in cash and other assets. Could you live, let alone eat, on that amount? Or the alternative, risk “spending it down” to qualify, as my kind and sympathetic caseworker suggested?” Check out our recent blog posts for more on this issue.

Banking Innovation

The Atlanta Journal-Constitution has an op-ed that advocates for Georgia to offer prepaid cards for unemployment benefits instead of paper checks. Jennifer Tescher from the Center for Financial Services Innovation has an op-ed that looks at creative approaches banks and credit unions are taking to meet unbanked customers’ savings and checking account needs. Those seeking mortgage refinance opportunities are not seeing that same level of bank innovation: the Wall Street Journal reports that “clogged mortgage pipelines have created headaches for hundreds of thousands of Americans trying to take advantage of low mortgage rates.” A small mortgage lender in Wisconsin described the refinancing process as a “rat’s maze for the consumer.” The Huffington Post reports that the Consumer Financial Protection Bureau is considering overhauling mortgage fees, such as origination fees, that may obscure consumers’ ability to make educated decisions.

Quick Hits

  • Don't miss our event next week with Louis Hyman, author of Borrow: The American Way of Debt and Janis Bowdler from National Council of La Raza's Wealth Building Policy Project. You can watch live at 12:15 ET on May 17th.
  • As more students rely on free and reduced price lunch in Minnesota, educators and policymakers grapple with the achievement gap they’re seeing along both race and income lines.
  • A new Maryland law will kick in next month that will allow banks and credit unions to offer raffles with cash prizes as a way to promote savings. Representatives from the Maryland CASH Campaign and the Doorways to Dreams Fund weigh in on the potential benefits and pitfalls of introducing prize-linked savings.
  • The U.S. Mexico Border Philanthropy Partnership is hosting an event about the asset building needs of cross-border families in the San Diego/Tijuana region May 17th and 18th. The event page explains, “Our member and partner organizations have engaged in ongoing discussions about the implications of designing and delivering asset building initiatives in a trans-border context and what the Mexican counterpart of "family asset building" looks like.”
  • A piece at The Root looks at black stay-at-home mothers, looking at both the economic circumstances and social contexts of black motherhood. Black women are half as likely as white women to stay home with their children, largely for economic reasons. "The path to success in the black community has almost always been through economic empowerment, so to stay at home is really going against the grain,” explains Kuae Mattox, president of a support group for black stay-at-home mothers.

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