Amid robust economy, many are left behind
Even amidst a robust national economic recovery, millions of American households are struggling to make ends meet. Can better access to financial resources be a key solution?
By Shelly Gigante, Digital Content Writer
Against the backdrop of economic expansion and one of the greatest stock market rallies that Wall Street has ever known, it may seem like the rising tide of prosperity has lifted all boats–or at least all bank accounts for working Americans. And, indeed, many have benefited by building wealth, paying down debt and taking steps to secure their financial future.
A glimpse beyond the leafy neighborhoods of upwardly mobile America, however, reveals a painful truth: Forty million households in low-income communities have been left behind.
Indeed, while the overall U.S. poverty rate declined and incomes rose rapidly in 2015 and 2016, the most recent U.S. Census data available suggests that many of America’s poorest households fell deeper into poverty. In 2016, the share of the U.S. poor population in “severe poverty,” which is defined as those with family or individual incomes below half of their poverty threshold, reached its highest point in the last 20 years, rising to nearly 46 percent in 1996.
Families that live at or below the poverty line face countless challenges that hinder their ability to help themselves. They struggle to find affordable housing near public transportation, childcare that can accommodate unpredictable work schedules and jobs that pay sick leave–a particular problem for a population that disproportionately presents with chronic illness.
Many who live in the communities left behind also lack social capital, the term used to describe the support that many receive from peer networks, including caregiving reciprocity, job recommendations, help navigating the educational system and guidance on asset accumulation.
Importantly, low-income households also often lack access to traditional financial services that might help them to save for unexpected emergencies or a down payment on a home. Loans with favorable interest rates are unavailable or difficult to qualify for, making it tough to establish credit or start a business to boost their income. As a result, many are forced to rely on alternative financial tools such as pawnshops, high interest payday lenders and family money pools to make ends meet–all of which perpetuate the cycle of debt.
The solutions are not simple. Politicians and pundits disagree on how to combat poverty in a meaningful way. Some advocate strengthening the social safety net with public programs such as welfare, food stamps and unemployment insurance. Others seek bigger tax credits, a higher minimum wage or job training. Most, however, agree that education–both academic and financial–plays a pivotal role.
In this, corporations can help. Banks, lenders and other financial service providers can prioritize underserved communities. They can work with local leaders to optimize resources and help families navigate the public and private programs that already exist.
MassMutual is one of those corporations that has prioritized underserved communities through its Foundation’s Live Mutual Project. This initiative is a community and social impact program designed to empower households in underserved communities. MassMutual collaborates with nonprofits to deliver programs that help families living in poverty secure their future and protect the ones they love, while raising awareness of the many barriers to economic opportunity.
LifeBridge, for example, MassMutual’s free term life insurance program, helps children of income-eligible families pay for their education if their insured parent or guardian passes away during the term of the policy. MassMutual pays the premiums for these $50,000, 10-year term life insurance policies.
MassMutual also brings interactive financial literacy education to middle and high school students in low-income communities across the country through its FutureSmart program, a partnership with EverFi. FutureSmart is on track to reach more than 2 million students and their families by 2020.
Together, corporations and community leaders can make a difference, helping households in poverty achieve financial well-being and creating sustainable solutions that ensure that no community in America is left behind.
Learn more about the Live Mutual Project here.
Related content from MassMutual:
The neighborhoods that industry forgot
Fighting poverty one relationship at a time
This content is paid for by Massachusetts Mutual Life Insurance Company (MassMutual) and published by WP BrandStudio. The Washington Post newsroom was not involved in the creation of this content. Learn more about WP BrandStudio.