Pennsylvania has a neat savings program for low-income families. It was profiled on the front page of The Wall Street Journal yesterday.
The article has a little histogram of savings. It shows that 13% of the bottom 20% of all income earners have retirement accounts, in contrast 86% of the top 20% have accounts. Per the US Census Bureau stats for 2001, that means folks making less than $17,970 and folks making over $83,500. (I LOVE THE CENSUS BUREAU!)
The origin of many of these programs is the work of Washington University’s Michael Sherraden. You can find an essay about it here. The basic idea is that asset acculumation begins with savings. By saving money, a low-income person can change their economic condition and lift themselves out of poverty.
Apparently there is also a Saver’s Credit for low & middle income households on the Federal tax return. As the WSJ points out, it’s only a benefit if you pay taxes.
My favorite two quotes from the article:
We are kidding ourselves if we think we are expanding savings [with] a grotesque array of savings incentives that do nothing for low-income Americans. Fred Goldberg, Treasury Department office in Bush Sr.’s administration.
Ms. Hughes says she tells her kids ‘no’ a lot. There were no Christmas presents this year. ‘I have to lead by example,’ she says. ‘I can’t tell my kids what to do if I don’t do it myself.
I love that last one. It sounds like good responsble parenting to me.
I used to read Marxist Feminist books in college for school, stuff about Patriarchy and Capitalist Accumulation. I’ll be honest, I’m interested in a little wealth accumulation myself.
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