EDITOR’S NOTE: This content originally appeared in The Hill Blog.
Job creation was a frequent refrain in this week’s Republican debate on the future of the American economy, with each candidate touching on the ever-popular trope of getting Americans “back to work”. Though this “jobs solve all” mentality makes for a convenient narrative, it completely sidesteps the true needs of the 100 million Americans who live in, or hover just above, poverty. The majority of America’s poor have jobs, often more than one, but still live precariously from paycheck to paycheck because of governmental and economic systems that thwart their ability to save, own assets, or build any kind of financial security.
So while investments in workforce development, a living wage, and education — topics that have made it onto the presidential debate agenda — are important, they simply will not be enough to break the cycles of poverty that keep so many Americans on the fringes of the economy. Candidates on both sides of the aisle need to start talking about comprehensive ways to build financial security, especially within low-income communities and communities of color hit hardest by cycles of debt and poverty.
Right now, 60 percent of Americans lack the savings to handle a $500 emergency. Forty percent — and over 60 percent among people of color — are “asset-poor”, meaning they couldn’t handle three months of expenses if their income was interrupted. Given that traditional banks seldom offer small or short-term loans, this means that for millions of American families, the slightest financial disruption — a healthcare expense, an overdue traffic ticket, missed work due to an injury, e.g. — can force them into credit card debt or leave them prey to predatory payday lenders, who, due to loopholes in state usury laws, can charge annual interest rates ten to a hundred times what traditional banks charge wealthier clients.
Numerous articles have documented how local, state, and national policies further strips from the most vulnerable: From unreasonably high traffic ticket and court fees that bolster city budgets on the backs of poor residents (predominantly those of color) to modern-day “debtor’s prison” laws that jail those who cannot afford to pay tickets, municipal fees, or child support — saddling them with the stigma and employment-barrier of being formerly incarcerated.
But when it comes to helping low-income communities and communities of color build wealth and financial resiliency, our policy landscape is paltry. The federal tax system predominantly favors the wealthy, distributing the lion’s share of its $1 trillion in annual tax benefits to those who already occupy the top rung of the income ladder. Even for tax policies that were designed to help working families build wealth by buying a home, saving, or investing in the stock market — the top 1 percent of households receive more from these benefits than the bottom 80 percent combined.
These are only a few examples of the ways that local, state, and national policies both maintain and exacerbate cycles of poverty and economic immobility for millions of Americans — yet you won’t hear any of these factors mentioned during the presidential debates. Instead, at best we hear about improving access to higher education or workforce development — important topics, but also ones chosen for their palatability and mass appeal. At worst, we hear a narrative around individual responsibility and hard work that ignores the many ways that the dominant governmental systems in this country (financial, tax, justice, and others) are tying the limbs of those trying to climb the economic ladder. When you’re the wealthiest nation in the world, but one in three of your citizens lives at or near poverty, it’s a systemic problem, not an individual one.
It’s high time for the presidential debates to acknowledge and discuss the crisis of systemic poverty facing the country, instead of rehashing oversimplified arguments about the middle-class building, cure-all of job growth.
Because we can’t expand the middle-class without lifting people out of poverty. And we can’t lift people— and keep people — out of poverty without comprehensive measures to reform the systems that are holding so many families back and install resources and institutional supports that give all Americans a fair shot at financial security.
Brown is director of the financial security program at PolicyLink, which works to promote local, state, and nationwide strategies and policies that enhance economic mobility. He serves as the co-chair of the Tax Alliance for Economic Mobility, a national coalition focused on equitable tax reform.