Poverty cannot be understood and defined solely as a lack of income. Families also need assets, which are the building blocks of long-term economic security and the “rungs” needed to climb the economic ladder. They need to be able to rely on responsible financial services that help build and not destroy those assets. Thus, any comprehensive strategy to combat poverty must include strengthening the assets of low-income families, from home equity, to savings to pensions and retirement accounts.

 

People who are asset-poor live on the edge of financial disaster. They are the families who, in the face of unexpected crises, such as layoffs or serious illness, will deplete their savings and other assets within 12 weeks while living at the poverty level.

 

More than twice as many families are asset-poor than are income-poor in the United States. And, while our nation suffers from income inequality, the inequalities in asset ownership are even more dramatic. The lowest-earning 40 percent of U.S. workers take home 10 percent of the nation’s wealth, but they own just 1 percent of the assets. These inequalities are even starker when broken down by race and ethnicity. A typical African American family earns 66 cents in income for every dollar earned by a white family, but owns just 7 cents for every dollar of white wealth. For Latinos the ownership figure is slightly higher at 11 cents.

 

If asset building is about making sure there is opportunity for all, closing the racial and ethnic wealth gap may be one of the paramount civil rights issues of our age.

 

The JCPA calls for the federal government to help families create long-term financial assets. To that end, we call on the federal government to support:

 

The community relations field should:

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