Every two years, our partners at CFED (the Corporation for Enterprise Development) host a conference in Washington, D.C. for those who are passionate about expanding economic opportunity in the United States. This conference, the Assets Learning Conference (ALC), took place September 17-19, and brought together over 1,200 asset-building advocates from 48 states. As the Lead State Organization in Arkansas for CFED’s Assets and Opportunity Network, Southern was eager and proud to be in attendance.
In giving the State of the Field address at the ALC, Andrea Levere, President of CFED, stated “the financial and economic status of our country can be defined by three words: inequality, insecurity, and immobility.” She added the U.S. is ranked third from the bottom in economic mobility of developed nations – 65 percent of Americans born in the bottom income quintile stay there for the rest of their lives. Many sobering statistics by pioneers in the asset-building field followed Andrea’s first speech in the subsequent days. Yet, in spite of the many challenges lying ahead due to inequality, insecurity, and immobility, there was a great, palpable feeling of hope throughout conference because of the hundreds of people present passionate and committed to reversing the tide on the economic problems we face.
To illustrate some of the pressing issues of our time, and bring some encouragement on how to address them, below are several quotes taken from asset-building leaders during the ALC. Following the quotes are two notes: what Southern is doing to create economic opportunity, and what Arkansas and Mississippi can do to enable prosperity for their residents.
“Half of the people in the country do not have access to a 401(k) plan.” – Michael Sherraden, Professor at Center for Social Development, Washington University in St. Louis (founding father of IDAs)
- How Southern is creating economic opportunity: Southern offers a variety of savings accounts, including Individual Development Accounts (IDAs). A matched 401(k) plan is also available to all Southern employees after one year of employment.
- What Arkansas and Mississippi can do to enable prosperity: While neither state can mandate that every employer offer a 401(k) plan, they can advertise for increased savings through other means such as having emergency savings and/or opening a U.S. Department of the Treasury myRA to help with financial stability during retirement.
“Lack of income means you don’t get by; lack of assets means you don’t get ahead.” – Ray Boshara, Director of Center on Household Financial Stability, Federal Reserve Bank of St. Louis
- How Southern is creating economic opportunity: By offering IDAs, Southern helps low-to-moderate income individuals save for assets, such as starting a business, buying or fixing a home, and paying for post-secondary education.
- What Arkansas and Mississippi can do to enable prosperity: For most low-to-moderate income folks, saving can be challenging due to limited resources. Arkansas and Mississippi can increase the overall median household income in their states by raising the minimum wage. Further, they can ensure asset-prevention policies, such as asset limits, and asset-stripping businesses, such as payday lenders, do not deter Arkansans and Mississippians from reaching financial stability.
“I saw child savings accounts (CSAs) as a way to expand economic opportunity because I’m a mom.” – Tishaura Jones, St. Louis Treasurer
- How Southern is creating economic opportunity: Southern is one of the partners involved in the Mississippi College Savings Account Program, which was developed and administered by the Center for Community and Economic Development at Delta State University (CCED) and the Mississippi Community Financial Access Coalition (MCFAC). Presently, over 600 children’s savings accounts have been established through the program.[i] Further, Southern also participates in the Save for America program, opening savings accounts specifically for post-secondary education.
- What Arkansas and Mississippi can do to enable prosperity: Both Arkansas and Mississippi currently offer 529 savings plans, yet less than 5 percent of Arkansas and Mississippi children are set-up as the beneficiary.[ii] By modeling after states such as Colorado, Maine, Hawaii, and Nevada, Arkansas and Mississippi could implement a statewide CSA program administered through a state agency to help increase each state’s rate of post-secondary educational attainment.
“The scarcity low-income people feel is not just a juggle of income; it’s a juggle of mental resources.” – Eldar Shafir, Professor of Psychology and Public Affairs at Princeton University, author of Scarcity
- How Southern is creating economic opportunity: Southern offers personalized credit counseling to help clients get and stay on a responsible financial path. Through counseling, clients are then able to make sound financial decisions for their families and attain economic security.
- What Arkansas and Mississippi can do to enable prosperity: Both Arkansas and Mississippi should require financial education as a requirement for graduating high school. A growing body of research has revealed that financial education in schools can have a significant impact on encouraging healthy financial behaviors later in life.[iii]
“The first step to asset-building is access to responsible financial services.” – Nikki Foster, Program Officer at Northwest Area Foundation
- How Southern is creating economic opportunity: As a Community Development Financial Institution (CDFI), Southern’s mission is to provide affordable and accessible capital through a variety of financial products, especially in rural and underserved markets.
- What Arkansas and Mississippi can do to enable prosperity: Since many of the communities in Arkansas and Mississippi are classified as rural and underserved, both states should incentivize their CDFIs to ensure the availability of responsible financial services in those markets.
To learn more about our efforts to create economic opportunities for people in rural communities, we invite you to contact Meredith Covington, Policy & Communications Manager, at email@example.com.
[i] Covington, M., & Edwards, T. (2014). Evaluating college savings plans: A case study on Arkansas and Mississippi. Southern Bancorp Community Partners. Little Rock, AR. Available at http://southernpartners.org/assets/PP_VoL41_20140428.pdf.
[iii] Gutter, M. (2009). Financial capability of college students from states with varying financial education policies. National Endowment for Financial Education. Available at http://www.nefe.org/Portals/0/WhatWeProvide/PrimaryResearch/PDF/Gutter_FinMgtPracticesofCollegeStudents_Final.pdf.