Breaking down barriers to employment & equitable asset building.
Enable equitable economic mobility by addressing the systemic barriers that get in the way of accessing and retaining good jobs, including self-employment, for individuals with low income. Asset building provides greater opportunities for families to sustain intergenerational economic well-being.
Key structural challenges continue to hold many individuals back from achieving economic mobility, such as how public benefits are designed, broad employer practices, limited access to critical work supports, embedded inequities in economic development and access to financial products that can drive asset-building. Nonprofit partners often seek to address these challenges through programmatic workarounds. Ultimately, lasting change will require policy changes and efforts that influence practice change within our local economy.
Investment of $2,120,000 in 16 partners
“Lack of access to capital, especially for businesses in marginalized communities. This challenge causes businesses and families to fall into predatory lending practices (pay day loans, high interest rates), raises income-to-debt ratio lowering credit scores, and leaves them with no opportunity to build wealth because they are just trying to survive.”
— Educator and Co-Op Developer
“Programs build rules that don’t work for everyone. You need to put together things that are unique for each person… these are human beings.”
— Community Partner
“One part of the challenge is that currently we are leading with deficit framing. When we lead with poverty, we run into a problem. Even people with low wages don’t identify as being in poverty. When we lead with this, we are leading with what it is we are fighting against. The challenge is to adjust our focus to what we DO want and lead with aspirations. We all want the best for our kids and our families.”
— Community Organizer
Economic mobility is a complex issue that is impacted by systems and structures often beyond the control of any one individual. Yet, the systems and structures are often what inhibit mobility the most, especially in Black and Hispanic communities and among other historically marginalized populations.
Solutions to improve economic mobility must seek to repair the current broken systems and build new systems. Impact of this work goes beyond financial stability – improving economic mobility has a positive impact on families, communities and future generations. Income and wealth (net worth and assets) are associated with better health and lower premature death as well as stronger communities, and more of them.[i] But in the United States, the opportunity for economic mobility and asset-building is not equitably available to all. The average Black and Hispanic households earn about half as much as their white peers and own only 15-20% as much net wealth.[ii] As defined by the Pew Research Center, wealth is “the value of assets owned by a family, such as a home or savings account … that provides security and social status for future generations.” [iii] The rise in economic racial inequity in the U.S. has continued uninterrupted since the 1980s, at the same time the gap between low-income and high-income Americans has widened.[iv]
Changing these trends requires new solutions that address the flawed systems and root causes driving inequitable opportunity to employment and asset-building.
Key Driver: Opportunities to Learn and Earn (Influence Driver: Supportive Communities)
Area Pillars: Financial Stability
Households earning 200% of the Federal Poverty Guidelines (FPG) are often considered to have the financial resources to be “self-sufficient” or meet their basic living expenses. For a family of four, 200% of the FPG means earning more than $55,500.[v] Earning a self-sufficient wage, which typically doesn’t provide families with available resources to build savings or invest in assets, has become more difficult and increasingly requires post-secondary education. Based on a report published by Cincinnati USA Regional Chamber, the local median income for individuals with a bachelor’s degree is nearly double of those with only a high school diploma or equivalent. The same study also showed that most job growth will continue to be in lower paying jobs with only seven of the top 25 fasting-growing occupations paying a self-sufficient or higher wage.[vi]
Access to jobs and affordable higher education are just two of the systemic challenges that hold back families from equitable opportunities that lead to economic mobility and well-being. Families also face challenges within public-benefit systems, especially low-income families with young children and those accessing disability benefits. One of the most common issues is the “benefits cliff.” This is a structural flaw in most child care assistance benefits systems. The “benefits cliff” discourages parents from earning more due to the net loss of resources that occurs despite receiving a wage increase.[vii] Families are forced to make the hard decision of maintaining lower wages so they can continue to afford child care with the help of public benefits.
These are only a few of the interconnected systemic challenges holding back families from equitable economic well-being. They intersect with and are compounded by many more challenges, such as pay inequity, discriminatory or predatory lending practices, institutionalized racism, low social capital and so on.[viii]
Due to the many factors that contribute to supporting or inhibiting economic advancement, the specific challenges that get in the way of any one family are often unique, especially when considering the community in which they live. As a result, community residents experiencing the most obstacles to achieving economic mobility best understand the complexity of the structural challenges in policies and practices. By centering community members in informing and designing new solutions, there is opportunity to improve the policies and practices that currently contribute to economic disparities, such as benefit cliffs and inequities in wages and asset-building.
How might we center families in informing and designing new policies and practices that seek to address the structural challenges currently inhibiting equitable economic mobility?
Economic well-being is often assessed through financial indicators, but it encompasses more than just income. It is the ability of an individual or family to have present and future financial security. This includes being able to make economic choices and feel a sense of security, satisfaction and personal fulfillment with one's personal finances and employment pursuits. As a result, it’s also important to understand and assess mindsets – sense of personal value, belonging, inspiration and overall well-being.
Too often, solutions focused only on assessing the change in income miss opportunities to also support a mental shift toward more holistic well-being. By partnering together, nonprofit organizations have the opportunity to combine their individual expertise to test holistic solutions that build equitable economic well-being.
How might we work to shift the mindset from poverty to building holistic economic well-being by leveraging the individual expertise of nonprofit organizations working to improve economic mobility for families and individuals living with low incomes?
Survey participants shared the following insights:
[i] Woolf, S. H., Aron, L., Dubay, L., Simon, S. M., Zimmerman, E., & Luk, K. X. (2015). How Are Income and Wealth Linked to Health and Longevity? In Urban.org. Urban Institute . https://www.urban.org/sites/default/files/publication/49116/2000178-How-are-Income-and-Wealth-Linked-to-Health-and-Longevity.pdf
[ii] Aladangady, A., & Forde, A. (2021, October 22). Wealth Inequality and the Racial Wealth Gap. Wealth Inequality and the Racial Wealth Gap. https://www.federalreserve.gov/econres/notes/feds-notes/wealth-inequality-and-the-racial-wealth-gap-20211022.htm
[iii] Johnson, C. C. (2021, May 6). Intergenerational wealth goes beyond money—and everyone deserves to pursue it. Fortune. https://fortune.com/2021/05/06/generational-wealth-black-families-in-america-economic-inequality-black-intergenerational-inheritance/
[iv] Pew Research Center. (2020, January 9). Most Americans Say There Is Too Much Economic Inequality in the U.S., but Fewer Than Half Call It a Top Priority. Pew Research Center’s Social & Demographic Trends Project. https://www.pewresearch.org/social-trends/2020/01/09/trends-in-income-and-wealth-inequality/
[v] Department of Health and Human Services (HHS). (2022, January). Poverty Guidelines. ASPE. https://aspe.hhs.gov/topics/poverty-economic-mobility/poverty-guidelines
[vi] UC Economics Center. (n.d.). Jobs Outlook 2028. Cincinnati USA Regional Chamber. Retrieved June 23, 2022, from https://www.cincinnatichamber.com/cincy-region/employ-grow/jobs-outlook-2028
[vii] Women’s Fund of the Greater Cincinnati Foundation. (2020). The Cliff Effect and Other Disincentives in our Public Benefit System. In GCFDN.org. Women’s Fund of the Greater Cincinnati Foundation. https://www.gcfdn.org/wp-content/uploads/2020/07/00.-2020-The-Cliff-Effect-and-Other-Disincentives-in-our-Public-Benefit-System.pdf
[viii] Hardy, B., & Logan, T. (2020, February 18). Race and the lack of intergenerational economic mobility in the United States - Equitable Growth. Washington Center for Equitable Growth. https://equitablegrowth.org/race-and-the-lack-of-intergenerational-economic-mobility-in-the-united-states/
[ix] The wealth gap between Black and white households will need big ideas to fix. (2021, April 12). The New York Times. https://www.nytimes.com/2021/04/12/business/the-wealth-gap-between-black-and-white-households-will-need-big-ideas-to-fix.html?
[x] Center for American Progress. (2021, July 28). RELEASE: New Data on the Black-White Wealth Gap Before and During the Pandemic. Center for American Progress. https://www.americanprogress.org/press/release-new-data-black-white-wealth-gap-pandemic/
[xi] Bureau, U.S. Census. (2022). S1701: POVERTY STATUS IN THE PAST 12 MONTHS. 2020: 5 Year Estimates for Cincinnati, OH-KY_IN Metro Area. Census Bureau Table. Retrieved May 19, 2022, from https://data.census.gov/cedsci/table?q=poverty&g=310XX00US17140&tid=ACSST5Y2020.S1701
[xii] UC Economics Center. (n.d.). Jobs Outlook 2028.