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Crisis Assistance Ministry

Crisis Assistance Ministry

Charlotte, NC

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Can Baby Bonds Ease the Racial Wealth Gap?

The impacts of wealth inequalities are quite evident every day at Crisis Assistance where we see people, through no fault of their own, struggling to pay rent, keep the lights on, and afford clothes for their children. In a community that is majority white, the overwhelming majority of people who seek help with basic needs here are Black and Hispanic. But the reality is that the nonprofit sector can only do so much to address the long-term struggles of the economically disenfranchised. Systemic policies have created and sustained the continued wealth gap, and it will require a systemic approach to reverse that impact.

January 25, 2023

This month, while some of the wealthiest individuals in the world gathered at the annual World Economic Forum in Davos, the charity organization Oxfam released a report detailing how, from the start of the pandemic through the end of 2021, the wealthiest 1% across the globe amassed two-thirds of all new wealth created. This startling concentration of wealth exists in the United States as well. Here, those wealth disparities manifest themselves acutely across racial lines.

This is certainly evident in Charlotte-Mecklenburg, where the effects of the racial wealth gap are visible daily. The fact that more than 8 out of 10 people seeking assistance at Crisis Assistance Ministry are people of color is no coincidence. More than 150 years of policy-induced systemic racism have resulted in the current inequities.

But what if local government could act right now and drastically reduce the racial wealth gap in just a generation?

RACIAL WEALTH GAPS

Nationally, the median wealth of white households is ten times that of Black households and eight times that of Hispanic households.  Here, in Mecklenburg County, the disparities persist: one in three Black and Hispanic families in Charlotte have a negative net worth, meaning that their total debts exceed the value of their assets. Only one in seven white households in Charlotte experience this. Black and Hispanic households also experience much higher rates of asset poverty, meaning that they lack sufficient wealth to provide basic needs for three months.

The rate of asset poverty among Black households in Mecklenburg is 42.9%; for Hispanic households, 40.7%; for white households, only 15.5%.

By nearly every measure, white families in Mecklenburg County are far better off than Black and Hispanic families. These divides are the product of decades of racial injustice and unfair policy practices in both the private and public spheres.

BABY BONDS

How can we remedy this in the present day? One public policy with potential is commonly referred to as Baby Bonds.

Baby Bonds, in essence, are government-funded trust accounts set up for newborn infants, specifically those born into asset-poor households. The seed money put into the account appreciates in value until the child turns 18, at which point the account becomes accessible to use for a major asset investment like a college education or home ownership. The ultimate goal is to build long-term wealth for those born into economically disadvantaged families. Senator Cory Booker recently proposed the American Opportunity Accounts Act (AOAA), which would provide every American child with $1,000 in an account at birth, plus up to an additional $2,000 per year depending on the income level of the child’s family.  

One study from Columbia’s Center on Poverty and Social Policy examined how a hypothetical Baby Bonds program, similar to Booker’s, would have affected wealth inequalities among 18–25-year-olds in 2015. The study found that the program would lower the wealth gap between white and Black households significantly: moving from a difference of more than 10-fold to just 1.4.

While this policy uses income, rather than race and ethnicity, as an eligibility marker, the intricate relationship between race and income potential in the U.S. means it could still do a good job of narrowing the racial wealth gap.

BABY BONDS FOR CHARLOTTEANS?

The impacts of wealth inequalities are quite evident every day at Crisis Assistance where we see people, through no fault of their own, struggling to pay rent, keep the lights on, and afford clothes for their children. In a community that is majority white, the overwhelming majority of people who seek help with basic needs here are Black and Hispanic. But the reality is that the nonprofit sector can only do so much to address the long-term struggles of the economically disenfranchised. Systemic policies have created and sustained the continued wealth gap, and it will require a systemic approach to reverse that impact.

Programs like Baby Bonds apply the power of policy to reduce racial wealth disparities in order to create a more equitable community for us all. While most Baby Bonds programs have been proposed at the federal and state level, Mecklenburg County could consider piloting a bond program for its residents. By creating such a pilot and carefully tracking its outcomes, Mecklenburg County could become a national leader in championing Baby Bonds as well as fighting racial wealth inequality.

Over time, systemic approaches like this could get Crisis Assistance Ministry closer to our ultimate goal: closing our doors because people living in Charlotte-Mecklenburg can meet their basic needs without help from agencies like ours.

Filed Under: Advocacy Tagged With: Asset Poverty, Baby Bonds, Charlotte-Mecklenburg, Columbia's Center on Poverty and Social Poverty, Cory Booker, Mecklenburg County, Racial Wealth Gap, Systemic Racism

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Crisis Assistance Ministry

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  • Main Office:
    500-A Spratt St.
    Charlotte, NC 28206
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crisisassistmin

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We had an unusual 🐿️ visitor this morning. While we DO specialize in stabilizing families through emergency basic needs and financial empowerment, our services are designed for neighbors of the human variety! 🤣 
Fortunately, our little squirrel buddy has been successfully relocated to the outdoors where they can continue to take care of their family too 😁 🎉

crisisassistmin

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Pulitzer Prize-winning author Matthew Desmond’s thought-provoking message will help us understand the systemic issues contributing to poverty and inspire us to be part of the solution here in our own community. Tickets are free, but required. Seating is Limited. <Link in Bio>

crisisassistmin

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We aren't throwing a big party, but we ARE asking friends and neighbors to make a direct contribution to help stabilize families facing a financial crisis. Your help with this Non-Event will make more stories like this one possible. Join us with a gift to help neighbors avoid eviction and loss of utilities and to empower more people with the tools to rebuild financial stability for themselves. Don't Save a Date . . . Save A Future.

crisisassistmin

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We love sharing our mission with corporate #volunteers like this team from @humana today. Thanks to their help, families will find essentials like clothing, shoes, school supplies, and household goods—free of charge— in our store while they continue to build financial stability. #thankful

crisisassistmin

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Instead of planning a fancy gala, we're inviting you to skip the party (and all those costs) and instead make a direct contribution to stabilize families experiencing financial crisis right here in Charlotte-Mecklenburg.
It's our NonEvent 2023, and your gift will help hardworking neighbors escape the threat of eviction or loss of utilities while empowering families with the resources to stabilize their families . . . and their future.
SAVE A FUTURE: https://crisisassistance.org/mobility

crisisassistmin

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What a wonderful day to welcome #volunteers from @DukeEnergy during their Summer of Service. Nearly 100 Duke employees spent part of their day helping with everything from painting barrels to inspecting donations and stocking the store. A GREAT way to spend a Friday here in the Queen City!

crisisassistmin

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This might look like a #Barbie appreciation post, but actually it is a shout out to Team @duke_energy and the 100+ folks who spent their day as #volunteers here today!

crisisassistmin

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Starting the day with a wonderful snack ministry from @elevationchurch for day 6 of #loveweek2023! Thank you for making sure families seeking help today have a little nourishment along the way.

crisisassistmin

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Today's LOVE WEEK 2023 #volunteers from @elevationchurch created no-sew blankets for families who shop here free of charge, staffed the checkout counters in the store, and prepared newly arrived clothing from corporate donors for future shoppers. With help like this, more than 80 people per day find essentials to help stabilize their families when they visit our Free Store. #thankful #loveweek2023

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