Retirement Savings for Low-Income Workers – California

Congress targets a California law that aims to give low-income workers retirement security, By Evan Halper, February 9, 2017, Los Angeles Times: ” An ambitious California law intended to help create retirement security for low-income workers is in the crosshairs of the Trump-era Congress, which is moving to block the state and others from launching programs to automatically enroll millions of people in IRA-type savings plans…”

Underbanked Households

The millions of Americans without bank accounts, By Gillian B. White, October 20, 2016, The Atlantic: “The number of American families without a bank account dropped to about 9 million in 2015, the lowest rate on record since the Federal Deposit Insurance Corporation started gathering data in 2009. Still, around 24 million households are considered underbanked, meaning that they have checking accounts but still rely on alternative services—such as pawn shops, check-cashing operations, and payday or auto-title loans—for their credit and cash needs. And that number, a new report finds, hasn’t improved much at all in the past few years, which means that tens of millions of Americans still struggle without access to basic financial services…”

Unbanked Households

More Americans come into the banking system, By Mitchell Hartman, September 9, 2016, Marketplace: “‘Unbanked’ is the term used by financial regulators and consumer advocates to describe people who live, work, pay bills and borrow for emergencies, entirely outside the traditional banking system. Being ‘unbanked’ can limit peoples’ access to affordable credit, and leave them vulnerable to predatory lending…”

Predatory Lending

Payday loans’ potentially predatory replacement, By Gillian B. White, August 12, 2016, The Atlantic: “Dangerous, high-cost lending isn’t going away anytime soon.  While some have heralded the Consumer Financial Protection Bureau’s long-awaited payday-lending regulations as significant progress toward the end of predatory lending practices, other, similar products have, as predicted, started to take their place…”

Income and Savings of People with Disabilities

These government rules trap millions of Americans in poverty, By Ben Steverman, August 2, 2016, Bloomberg: “Susanne Brasset has $5 in her bank account. She’s scared to save more.  Brasset, a 39-year-old freelance photographer in Denver, has cerebral palsy, which limits her ability to work. To pay her bills, she relies on Social Security, which she gets because of her disability. But the program monitors her bank accounts to make sure she’s not putting away too much money. With more than a few thousand in the bank, she’d be disqualified for the program, as well as for Medicaid and other crucial benefits. Unable to plan for the future, Brasset said her finances put her in a ‘constant state of anxiety and fear…'”

Intergenerational Poverty

Can poverty be passed down? A nonprofit tries to break the cycle, By Katie Johnson, July 12, 2016, Boston Globe: “In some households, poverty is passed down from generation to generation, almost like an inherited trait.  Teri Williams, president of OneUnited Bank, sees it happen among the lower-income Boston residents the bank serves. Often it boils down to bad decisions: people with bad credit who can’t get a utilities account use their children’s Social Security numbers to get the gas turned on and then can’t pay the bills, saddling their children with bad credit before they hit adulthood.  ‘We’ve seen that unfortunately too many times,’ Williams said.  New research suggests that these kinds of actions may be tied to the chronic stress of poverty, which can short-circuit brain development in children. This can limit their ability to plan ahead, control impulses, and juggle multiple tasks — skills that are vital to success in school and work…”

Household Economic Security

Nearly half of U.S. households would struggle with an unexpected $400 expense, Fed study finds, By Don Lee, May 25, 2016, Los Angeles Times: “Shedding light on the precarious economic state of many American families, theFederal Reserve said Wednesday that nearly half of U.S. households reported they would have trouble meeting emergency expenses of just $400.  In addition, the Fed found that 22% of workers were juggling two or more jobs last year, higher than what government jobs data would suggest. And nearly one out of three Americans said that they have no retirement savings or pension…”

Public Housing

  • Syracuse’s public housing creates prisons of poverty; what if they could move to suburbs?, By Marnie Eisenstadt, April 14, 2016, Syracuse Post-Standard: “If David Paccone could, he would begin attacking Syracuse’s poverty crisis from outside the city. He’d build small developments of low-income family housing in DeWitt, Manlius and Fayetteville, in the hopes that some people now in Syracuse’s poorest neighborhoods would move there. But that’s not a solution in Paccone’s arsenal. As the assistant executive director of theSyracuse Housing Authority, he oversees 2,340 public housing apartments. The tenants largely are the poorest of the poor, making less than 30 percent of the average median income — less than $16,000 a year…”
  • Public housing residents could get credit boost, By Philip M. Bailey, April 9, 2016, Louisville Courier-Journal: “The Louisville Metro Housing Authority is partnering with a nonprofit to help its public housing occupants improve their financial future, Mayor Greg Fischer announced Thursday morning.  The city has made an agreement with Credit Builders Alliance to begin a credit building program that Fischer’s office says is one of only five of its kind in the country…”

Resources for Low-Income Entrepreneurs

Low-income entrepreneurs welcome added assistance, By Katie Johnson, October 12, 2015, Boston Globe: “For a decade, Tiffany White worked as an executive assistant in Dorchester, living paycheck to paycheck to support herself and her son. But now she is on the other side of the corporate divide, the owner of a new business looking to hire as many as six employees for a natural skin and nail care studio scheduled to open in Hyde Park in November. White, 46, credits her leap to becoming a business owner to a free 12-week entrepreneurship program aimed at residents of Dorchester, Roxbury, and Mattapan…”

Racial Disparity in Debt Collection

The color of debt: How collection suits squeeze black neighborhoods, By Paul Kiel and Annie Waldman, October 8, 2015, ProPublica: “On a recent Saturday afternoon, the mayor of Jennings, a St. Louis suburb of about 15,000, settled in before a computer in the empty city council chambers. Yolonda Fountain Henderson, 50, was elected last spring as the city’s first black mayor. On the screen was a list of every debt collection lawsuit against a resident of her city, at least 4,500 in just five years. Henderson asked to see her own street. On her block of 16 modest ranch-style homes, lawsuits had been filed against the occupants of eight. ‘That’s my neighbor across the street,’ she said, pointing to one line on the screen…”

Education Savings Accounts

This innovative idea is helping low-income families save for college, By Jillian Berman, September 2, 2015, MarketWatch: “When he was a first-grader, Emily Gardner’s 8-year-old son Elijah Peters told her he wasn’t interested in college. He dreamed of becoming a handyman like his father instead. She signed him up for a college savings plan anyway. Now she’s glad she did. After a field trip to Manchester University in North Manchester, Ind., where Elijah held a pig’s heart and used Mentos to create an explosion in a bottle of Diet Coke, he began depositing his birthday and Christmas money into the account and asking his grandparents to help him save even more. ‘Just to hear that from a child who said ‘I’m not going to college,’ it is fantastic,’ said Gardner, 31, of Wabash, Ind., where she is director of the city’s downtown economic and community development program…”

Experimental Poverty Programs

The anti-poverty experiment, By Jason Zweig, June 5, 2015, Wall Street Journal: “The U.S. and other wealthy nations have spent trillions of dollars over the past half-century trying to lift the world’s poorest people out of penury, with largely disappointing results. In 1966, shortly after President Lyndon B. Johnson declared war on poverty, 14.7% of Americans were poor, under the official definition of the U.S. Census Bureau. In 2013, 14.5% of Americans were poor.  World-wide, in 1981, 2.6 billion people subsisted on less than $2 a day; in 2011, 2.2 billion did. Most of that progress came in China, while poverty has barely budged in large swaths of sub-Saharan Africa, South Asia and Latin America. Is it time for a new approach? Many experts who study poverty think so. They see great promise in a new generation of experimental programs focusing not on large-scale social support and development but on helping the poor and indebted to save more, live better and scramble up in their own way…”

Payday Lending

Feds aim to protect low-income users of ‘payday’ loans, By Josh Boak (AP), March 29, 2015, Detroit News: “Each month, more than 200,000 needy U.S. households take out what’s advertised as a brief loan.  Many have run out of money between paychecks. So they obtain a ‘payday’ loan to tide them over. Problem is, such loans can often bury them in fees and debts. Their bank accounts can be closed, their cars repossessed.  The Consumer Financial Protection Bureau proposed rules Thursday to protect Americans from stumbling into what it calls a ‘debt trap.’ At the heart of the plan is a requirement that payday lenders verify borrowers’ incomes before approving a loan.  The government is seeking to set standards for a multibillion-dollar industry that has historically been regulated only at the state level…”

Financial Opportunity Centers

Boston centers help low-income residents with budgeting, By Katie Johnson, March 20, 2015, Boston Globe: “Making money isn’t the problem for Adalziza Campbell. Managing it is.  Campbell works two jobs, as a hairdresser and a certified nursing assistant, but still can’t get ahead. She got turned down for a bank loan to buy a house and had to borrow from her dwindling savings account to pay her bills.  ‘I’m making money,’ she said. ‘Why don’t I have it?’  Like many people, Campbell, 35, of Charlestown, had never created a budget or tried to improve her credit score. But she has started learning these skills at the new Roxbury Center for Financial Empowerment in Dudley Square, one of two such sites to open in October as part of the city’s new Office of Financial Empowerment…”

Household Financial Security

Gap persists in homeownership, By Lisa Prevost, February 6, 2015, New York Times: “The rising tide of economic recovery is not lifting those most in need, according to an annual scorecard of financial security and opportunity put out by the nonprofit Corporation for Enterprise Development. Low- to moderate-income households and households of color remain far behind on a number of measures of financial well-being, especially when it comes to homeownership…”

Operation HOPE

Can the poor pull themselves out of poverty? By Diane Brady, June 25, 2014, Bloomberg Businessweek: “Amid all the debate over poverty’s causes and cures right now, little focus has been on what the poor can do to help themselves. They’re more often cast as the victims of concentrated wealth, misguided policies, and a laissez-faire capitalist system that’s created more crises and fewer opportunities to succeed. As President Barack Obama noted on June 23 at the White House Summit on Working Families: ‘There are a whole lot of people who are working harder than ever and can’t seem to get ahead.’ When it comes to such issues as trade and taxation, workers obviously don’t hold much sway. Almost half of Americans now attribute poverty to factors other than individual initiative, according to a recent NBC News/Wall Street Journal poll. In 1995, less than a third felt that way. Yet many Americans continue to move into higher income brackets, despite stagnant wages and job growth. They pay for cars, cell phones, and college without getting crippled by credit card debt. They’re able to buy homes and save for retirement. To John Hope Bryant, an entrepreneur and founder of the nonprofit Operation HOPE. . .”

Inadequate Emergency Funds

Many Americans struggle to maintain emergency funds, By Jennifer Elizabeth Austin-Mathewson, July 2, 2013, Deseret News: “When Jessi Stanley received a $15,000 inheritance, she dreamt about all the things she could do with the extra money. She wanted to put a down payment on a new house or buy a new car. But the 48-year-old from North Carolina knew what it was like to be poor, and decided to do something most Americans — according to Bankrate — aren’t doing: put the money in savings. “I saved approximately $40,000 over 14 years,” Stanley said. “A lot was from extra money I received.” That extra money came from tax refunds, money her father gave her that was supposed to be used for a new car and small inheritances. After paying off her car, she continued to make “car payments” to her savings account. According to a survey released last week. . .”