This week, as the nation pauses to reflect upon the legacy and service of Rev. Dr. Martin Luther King, Jr., the Asset Building Policy Network (ABPN) marks the occasion as an important opportunity to take stock of the progress achieved towards expanding financial access and inclusion in the United States, and to identify areas where more work and collaboration is needed.
On the surface, there appear to be some encouraging signs that the nation’s economy is slowly recovering from the Great Recession of 2008. The recent jobs report from the Bureau of Labor Statistics shows that the number of unemployed Americans fell by 1.7 million in 2014, and the Commerce Department’s latest report on personal wages shows a slow but steady growth. African-Americans’ real median household income climbed slightly to $34,598 in 2013, though still only a fraction of that of White households.
However, a deeper look into the numbers behind the recovery reveals a growing disparity: according to new data from the Pew Research Center, the median net worth of African-American and Hispanic households dropped nearly 34% (from $16,000 to $11,000) and 14.3% (from $16,000 to $13,700), respectively, between 2010 and 2013, while the median net worth for White households increased by 2.4% (from $138,600 to $141,900). The unemployment rate for African-Americans in December remained double that of Whites at 10.4%—the same as the past 40 years, as reported in Forbes last week. And according to Family Assets Count—a project of the Corporation for Enterprise Development in collaboration with Citi Community Development—40.7% of households of color lack sufficient net worth to sustain three months at the poverty level in the event of a loss of income.
These trends are not just reflected in the numbers, but in the voices of the communities themselves. The Leadership Conference, in partnership with ABPN, conducted a public interest research study last year entitled “Reaching Communities of Color on Real Finances” to gain insight into how communities are faring in today’s economy. The project comprised focus groups made up of low-income Hispanic, African-American and Asian individuals in Prince George’s County, MD, and San Francisco, CA, and interviews with over 1,200 low-income minorities from across the country.
Their stories are as sobering as the statistics. Respondents felt that the American Dream is simply beyond their reach, with no sense that things are getting any better for them. For many, the word “savings” is much more about short-term concerns—paying this month’s bills or weathering an emergency—than it is about buying a home or planning for retirement (this mirrors the findings of National CAPACD’s, National Urban League’s and NCLR’s recent study, Banking in Color). And, most reported that they are either just barely making ends meet or falling behind as wages fail to keep up with the rising costs of living.
The U.S. Census Bureau data offers a clear rationale for why we should prioritize savings and expanding financial access within communities of color. According to their projections, it is likely that no single ethnic group will represent a majority population segment in 2043. Building and preserving assets among communities of color must begin now if we are to foster a truly inclusive economy that can continue to compete on the global stage in the years to come.
Achieving this is the central goal of the Asset Building Policy Network (ABPN), a coalition comprising of Citi and eight of the nation’s leading civil rights and asset building organizations. In 2015, we will redouble our efforts to frame our communications, policy advocacy and research, as well as implementation of programs in service of generating savings and strengthening household financial resiliency in communities of color. Our individual and collective energy and efforts will focus on:
- Expanding the awareness and effectiveness of the Earned Income Tax Credit.
- Creating pipelines to improve to access to credit for strengthening one’s financial identity and promoting small business success.
- Enabling more eligible Legal Permanent Residents to attain the benefits of citizenship through the Cities for Citizenship initiative.
- Providing municipal governments and community advocates with vital data and policymaking tools to improve household financial security through Family Assets Count.
Accomplishing the goals of this collaboration would bring us closer to realizing Dr. King’s vision of a more inclusive economy for all.
The Asset Building Policy Network