Mind the gap
At the outset of this post, I would like to make a statement about the location of poverty. Poverty, as a micro-phenomenon, exists at an individual level. But poverty is also a macro-phenomenon, existing within society. Moreover, features from the macro-level often influence the experience of persons at the micro-level, making poverty a meso-phenomenon. Responding to poverty in a holistic way requires at least awareness of these three levels and a willingness to consider the implications of features at these three levels.
This morning, the Guardian carried a lead story called “A $95,000 question” which concerned itself with the household asset disparity between white Americans and African Americans. I have also heard about the gap in household assets from a book (Divided by Faith: Evangelical Religion and Race in America). The interesting piece of household assets is that it speaks to liquidity in the midst of a crisis. Many people, including both of these authors, view home value as an additional asset not immediately counted as household assets. The persistent presence of household assets speaks to the conventional wisdom of stewarding a rainy day fund.
We can assert the importance of a rainy day fund for all persons. Additionally, we can experience a knee-jerk reaction against people who, for whatever reason, have no rainy day fund. However, in reading the Guardian’s reporting today, Shapiro (the researcher who conducted the study in question) identified some different cultural features present in African-American households.
In African-American families there is a much larger extended network of kin as well as other obligations. From other work we’ve done we know that there’s more call on the resources of relatively well-off African-American families; that they lend money that’s not given back; they help cousins go to school. They help brothers and sisters, aunts and uncles, with all kinds of legal and family problems.
So when thinking about poverty, we find questions about what we do with the assets we cultivate. Additionally, we see that how we view and define community affects how we respond. Moreover, we also see some effects of policy creation declaring certain forms of wealth as valuable, while down-playing other forms. I am not trying to assert that asset protection is inherently evil, but we can and do struggle to determine what sorts of assets are best for long-term financial stability.
The brief from the source report also highlights some of the hazards associated with banking options for low-income households. It could be that differential access to loans meant that African-Americans increasingly found themselves in situations where the only option for financial assistance meant asking their families. [Because of the income brackets in question, I also considered the Federal Pell Grant program which provides assistance to low-income families, which does have differential likelihood of eligibility dependent on enrollment status. Eligibility requirements indicate the need to be at a participating program.]
The report sponsored by the Institute on Assets and Social Policy also further disaggregated the data by income bracket, indicating that high-income whites and middle-income whites saw about the same percentage growth (400%) of their assets. Also, this great growth in the assets of American whites might be strongly contingent on the housing bubble, as a non-owner occupied home counts as an asset, where the bubble started to pop first in populations of color. Other recent reports from the same institute review the experiences of the American middle class and the elderly in America.
Our economic lives connect us, one to another, in both seen and unseen ways. Moreover, we might want to consider how certain economic policies work within a system instead of solely considering whether we benefit as individuals.