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Scorecard: WA Could Do More to Prevent Poverty

How do you look on paper? One in seven Americans has a net worth of zero - or even a negative number. But states can help their residents change that. The nonprofit Corporation for Enterprise Development (CFED) has released a new scorecard by state, tracking policies in a dozen areas that help people build assets. They range from encouraging micro-businesses and preventing home foreclosures, to offering incentives for college savings.

Jennifer Brooks, CFED state and local policy director, says financial stability involves a lot more than a paycheck.

"It is having assets - having money in the bank and having the human capital of an education, the ability to buy a home or start a business - that actually help people transform their lives in an intergenerational way."

On the latest CFED scorecard, Washington does almost nothing to help people save for college. The '529' college savings plans have a combination of fees and minimum balance requirements that keep poor families from opening them. Brooks points out that some states even provide a small amount of matching money to encourage college savings - because, she says, the programs work.

"There's some very new research out that children who have a savings account dedicated for college are four times more likely to actually attend college. Among young people who expect to attend college, those who have an account in their name are seven times more likely to attend."

The scorecard gives Washington state high marks for its higher minimum wage, but low rankings for no state support of Individual Development Accounts to promote savings for homes or college, no state-supported programs to help renters transition into home ownership, and few consumer protections in payday lending. Brooks says most of the programs cost very little for a state to administer.

The scorecard results, by state, are available at www.cfed.org; click on "Assets & Opportunity Scorecard." Washington state's results can be viewed here.

Last modified onMonday, 07 November 2011 06:48

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