Advancing Economic Justice Today Part II: A Roadmap for the Future
Editor’s note: This post has been adapted from a speech on the state of the asset-building field delivered at the 2018 Prosperity Summit by Andrea Levere, President of Prosperity Now. This is the second of a two-part series, “Advancing Economic Justice Today”. Part one of the series takes stock of the challenges and victories the asset-building field has experienced over the last two years. This post examines the current state and future of the asset-build movement.
Where is the asset-building movement today? We face the future as a mobilized community, shaping our solutions with the insights from the communities we serve and delivered through partnerships with the private, philanthropic and public sectors and tribal governments aligned to promote financial well-being. Our commitment to bridging the racial and gender wealth divides drives our programs, policies and narratives. It is with these strengths that we face the grim reality captured by economist and Nobel Prize winner Joseph Stiglitz in the New York Times:
“Democracy and high levels of inequality of the kind that have come to characterize the United States are simply incompatible.”
These words are sobering. But they also raise the stakes of our work to new heights. Our shared commitment to reduce wealth inequality is also an investment in democracy. Our vision for the future must be bold. Here’s how we move forward:
1. We Must Give Everyone a Fair Shot: Let’s Close the Racial Wealth Divide in One Generation
There are many forces that drive inequality. But the force that Prosperity Now has focused on for the past decade has been the tax code. We calculated that in 2017 alone, the federal government spent $729 billion building wealth for taxpayers, the majority of which went to the wealthiest.
Last year, Congress had a tremendous opportunity with the Tax Cuts and Jobs Act to provide the kind of wealth- and asset-building help to the asset-poor majority. Unfortunately, by spending the majority of the $1.5 trillion to provide large tax breaks for the wealthy and corporations, Congress made the tax code more regressive than it already was.
For households of color — especially Black and Latino households — missing out on wealth-building opportunities or losing what little wealth they own is not something they can afford. Today, when you take out the family car and other durable goods, Black and Latino households own just $3,400 and $6,300 in wealth — a fraction of the $140,000 in wealth owned by White households.
After the 2016 presidential election, Prosperity Now created four federal policy campaigns that we believed were essential to this goal: increasing homeownership, protecting the safety net, safeguarding consumer financial protections and turning the tax code right-side up. In 2017, we published the State Policy Blueprint and the Racial Equity Design and Advocacy Primer. This year, we released the Municipal Policy Blueprint. Together, this federal, state and municipal policy infrastructure provides a robust foundation on which to build a campaign to eliminate the racial wealth gap in one generation.
This is not an impossible task: we know what to do and where the money is. But we need the political will and courage to do the right thing. That’s why we’re launching the Fair Shot 2020 campaign this year to engage our field in identifying champions on Capitol Hill and developing a comprehensive policy agenda that will be ready for primetime by 2020. If wealth inequality is undermining democracy, and communities of color are experiencing the greatest wealth inequality of all, it is up to all of us to close the racial wealth gap in one generation!
2. Let’s Create a New Playing Field Where We Build Wealth Together
We know that low- to moderate-income people can and do save when given the opportunity to do so. But they need a better environment supporting their savings efforts. That includes personalized advice from trusted sources in their community, easy-to-access digital tools that enable them to act on that advice and, most importantly, options for savings solutions that will help weather income volatility and unexpected expenses while also being able to plan for long-term needs. In effect, they’ve told us they don’t have a savings problem; we have an ecosystem problem.
To solve this, we must work with funders and investors to fuel innovation, Community Development Financial Institutions to leverage capital with deep community knowledge and financial institutions and employers to achieve scale. In two years, the practitioners in this room will have better tools to advance local savings strategies, and we’ll also have started building a new “playing field” that respects and meets the needs of low-income, low-wealth people.
3. The Prosperity Now Community: Think Long, Act Now
We have learned that building trusted partnerships in the communities we serve is essential at every stage of building financial capability, savings and wealth. But we have also learned that solutions that are too customized cannot be scaled, and if we want to make meaningful progress in reducing wealth inequality, we need to create new systems and partnerships that make scale possible.
To increase our influence on those who hold power, we need to act now but keep our minds on the long game.
By 2020, we will have expanded the reach, power and inclusiveness of our Community by another order of magnitude, bringing leaders — particularly leaders of color — to the table. By growing the breadth and depth of the Community, we will be even more of a force to be reckoned with.
