Ownership & Assets

The Asset Building News Week is a weekly Friday feature on The Ladder, the Asset Building Program blog, designed to help readers keep up with news and developments in the asset building field. This week's topics include inequality, retirement, the workforce, and financial services.

Editor's note: This piece originally appeared on New America's In The Tank blog.

The average childcare worker in the U.S. earns less than a janitor. Sure, some daycare centers pay well, but the average parent can’t afford those high-end centers that can cost as much as public university tuition.

Piling on to that: The daycare industry is largely unregulated with low standards on quality of care. At an event this week based off of a recent New Republic article, The Hell of American Daycare, panelists showed how that painful reality -- a broken system full of tales of toddler deaths and injuries – can also have dire consequences for our economy.

The use of credit checks to inform hiring decisions has been getting some much deserved scrutiny recently. Over the weekend, Charles Ellison for the Philadelphia Tribune and Gary Rivlin for the New York Times took a look at the practice of employers evaluating a job applicant's credit as part of the employment decision-making process. Ellison chronicles recent legislative efforts to curb the practice and points out that campaign finance data shows lawmakers are receiving sums of money from major credit reporting companies. Rivlin spoke with non-profit service providers and unemployed individuals who have experienced the negative effects of this phenomenon first hand.

On the surface, using credit checks as part of employment screening may seem like a simple, data-driven way for employers to ascertain a candidate's reliability. Upon closer inspection, however, using credit checks in this way is ineffective and exacerbates inequality.

Student loan debt has been in the news a lot these days. In the last week, a number of news outlets wrote about mounting student loan debt and the delaying of life events by their borrowers (see ABC News, the Chronicle of Higher Education, CNN Money, the NY Times [here and here], and the Wall Street Journal, to name a few). The article in the NY Times provides a great example of this, "Consider Shane Gill, a 33-year-old high-school teacher in New York City. He does not have a car. He does not own a home. He is not married. And he is no anomaly: like hundreds of thousands of others in his generation, he has put off such major purchases or decisions in part because of his debts."

The Asset Building Program is hosting an event Monday to feature Jonathan Cohn’s recent article for The New Republic "The Hell of American Day Care." A great panel will help us piece together the complicated picture of day care systems (or lack thereof) in America and offer ideas that address the issue from multiple angles. RSVP to come Monday at 12:15pm or tune in online to watch live.

Our friends at RESULTS Educational Fund are gearing up for their 2013 International Conference to be held in D.C. this year July 20-23. RESULTS works to train a new generation of advocates to address poverty and hunger both in the U.S. and around the world. The REAL Change Scholarship program is designed to bring more young people to Washington, D.C. for the international conference and provide access to trainings on organizing and advocacy, a career panel, and a chance to network with the over 500 conference attendees. The scholarship covers most of the cost of conference registration, travel to D.C., food costs, and lodging for young people ages 18 to 28. This is a great opportunity for emerging leaders in the field to build their skills and make connections to a broad range of organizations working to end poverty.

The Asset Building News Week is a weekly Friday feature on The Ladder, the Asset Building Program blog, designed to help readers keep up with news and developments in the asset building field. This week's topics include retirement security, racial wealth disparities, housing, and homelessness.

A new study came out this week evaluating the impact Medicaid coverage has on participants' health, financial lives, and general well-being. Sarah Kliff describes the study design:

The research uses data from Oregon, where the state held a lottery among low-income adults in 2008 for a limited Medicaid expansion. Of the 90,000 people who applied, 10,000 ultimately gained coverage. The lottery gave researchers a unique opportunity to conduct the first randomized experiment on Medicaid coverage, by studying those who gained insurance through the lottery and comparing them against a similar group of adults who did not.

The randomization of the study is an important feature: other studies have struggled to control for the differences in people who seek out Medicaid coverage and those who do not (but may be eligible). As Joe Colucci from New America's Health Policy team explains, "That created an incredible research opportunity - the randomized design allows researchers to really see the effect of Medicaid enrollment on people’s health, and hopefully put to bed the nonsense idea that Medicaid is bad for people’s health."

The study looked at what impact Medicaid coverage has on people's physical health, as measured by things like blood pressure, cholesterol levels and other "easy to obtain" indicators. In the two year study period, the researchers found "few short-term physical health gains," which came as a surprise and disappointment to some and as fodder for others to decry the program as ineffective. (The results on the physical health side are complicated and mixed, but I would refer you to Kevin Drum's analysis for more on some of the statistical issues at play. A question posed Aaron Carroll and Austin Frakt is also relevant here: "How many people saying that are ready to give up insurance for themselves or their family?") 

From an asset-building perspective, the really amazing finding from the study is on the impact Medicaid coverage had on participants' financial security. Jonathan Cohn explains:

The big news is that Medicaid virtually wiped out crippling medical expenses among the poor: The percentage of people who faced catastrophic out-of-pocket medical expenditures (that is, greater than 30 percent of annual income) declined from 5.5 percent to about 1 percent. In addition, the people on Medicaid were about half as likely to experience other forms of financial strain—like borrowing money or delaying payments on other bills because of medical expenses.

I bolded parts of that because I really want to emphasize what a striking impact having health insurance had on people's financial situations. On top of the benefits to low-income people's financial security, the study also reported "significant improvements in mental health outcomes, with rates of depression falling by 30 percent."

In his latest installment of global development wonkery for Business Week, our New America Fellow Charles Kenny (whom we share with the Center for Global Development) eloquently argues that the World Bank and IMF’s latest calls to all but rid the world of “extreme poverty” by 2030 are – to put it nicely – not nearly ambitious enough. This line is particularly clutch: “It seems wrong that most of the planet would subsist for a day on what many happily throw away on a [Starbucks Venti Caramel Frappuccino] and . . . that level of expenditure still doesn’t guarantee people a quality of life we should all deserve.” While I’d even argue that income itself as a measure of poverty and inequality falls flat in various and collective efforts to enable prosperity for all around the world – access to savings and asset building opportunities, in addition to income, is likely a much more powerful means of eradicating poverty over the long haul – I salute the audacity and optimism he conveys in this compelling piece and encourage others to check it out.

On April 9, 2013, the Savings Bond Working Group, a coalition of national and grassroots non-profit organizations, commercial tax preparers, tax software firms, and public officials, sent a letter to U.S. Secretary of the Treasury Lew regarding access to U.S. Savings Bonds at tax time. Asset Building Program Director, Reid Cramer, along with other members of the working group, called for continued commitment from the Treasury Department to preserving and modernizing access to U.S. Savings Bonds as a secure, simple, and powerful savings tool for working Americans at tax time.