Landmark study finds state "asset building" policies hold key to reducing poverty in America
Working hard and being employed may no longer be enough to ward off poverty, according to a study released today by the Sodexho Foundation and Brandeis University's Institute on Assets and Social Policy. The study finds that the U.S. has a large contingency of working poor who do not have sufficient resources to support their families at a minimum economic standard.
The future might be more promising, however. The study shows that new state policies are enabling more low-income households to move from poverty to the middle class by rewarding work effort, enhancing job-related earnings and providing ways to encourage the accumulation of assets such as savings and home ownership.
The study, Innovative State Policies to Reduce Poverty and Expand the Middle Class: Building Asset Security Among Low-Income Households, examines a new domestic policy framework called "asset building." The framework is based on the concept that helping people develop financial assets provides stability and an opportunity to move into the middle class.
"Asset-building is not only an anti-poverty strategy, it helps families realize the American dream by being rewarded for hard work through social mobility and economic security," said Dr. J. Larry Brown, executive director of the Institute on Assets and Social Policy, and Distinguished Scientist at Brandeis University. "Social investments encourage the accumulation of assets among the working poor, such as solid earnings, savings accounts, education and home ownership, to help reduce poverty in our country."
The Sodexho sponsored research looks at how states apply asset building to new social policies, and which state programs offer significant potential. The pioneering research shows that states with both abundant and lean fiscal resources, with urban and rural populations and reflecting a variety of ideologies, are increasingly centering their policies on the assets that residents need to build educational and technical skills, an income base and the financial wealth necessary for upward mobility and security.
"Our vision is to eliminate hunger in America, therefore the Sodexho Foundation is always seeking new ways to address poverty as its underlying cause," said Stephen J. Brady, president of the Sodexho Foundation. "Asset building is a universal solution because it addresses the shared needs and aspirations of households and promotes initiative."
The report classifies state asset policies with exceptional potential in three categories:
The analysis features these states and policies:
- Income, or creating and preserving an asset foundation;
- Human capital, or strengthening individual capacity; and
- Wealth, or building and securing financial assets.
Florida: Minimum Wage and Passport to Economic Progress
Kentucky: State Income Tax Threshold and Adult Education Transition to Post-secondary Education
Kansas: State Earned Income Tax Credit
New Mexico: Unemployment System and Home Loan Protection Act
Arizona: Child Care Subsidies for Working Parents and Phoenix's Community Initiatives for Financial Independence
Arkansas: Career Pathways, Workforce Improvement Grant Program and Individual Development Accounts
Georgia: HOPE Grant and GoodWorks!
Ohio: Elimination of Asset Tests
Louisiana: START Savings Program
Utah: Financial Literacy for Youth and Adults
Source: Eurekalert & othersLast reviewed: By John M. Grohol, Psy.D. on 21 Feb 2009
Published on PsychCentral.com. All rights reserved.
Ordinary riches can be stolen; real riches cannot. In your soul are infinitely precious things that cannot be taken from you.
-- Oscar Wilde