Today at its annual Clinton Global Initiative America (CGI America) meeting, Woodstock Institute, a lead partner of IABG, announced its “Commitment to Action,” which will further our work to strengthen retirement security.

CGI is an initiative of the Clinton Foundation founded by former President Bill Clinton to “turn ideas into action.” The Commitment to Action represents the key feature of the Initiative, lending the Foundation’s name to build awareness, identify partners, and share results for ideas that address some of the world’s biggest problems in a new way. Through Commitments to Action, the initiative has impacted more than 400 million individuals worldwide since 2005.

Woodstock’s Commitment to Action is supported as part of CGI’s financial inclusion Working Group and centers on retirement security. The 2012 report, Coming Up Short: The Scope of Retirement Insecurity Among Illinois Workers, found that over half of private sector workers in Illinois lack an employment-based retirement savings option. With most of these workers possessing limited or no assets, they face the real possibility of retiring into a declining quality of life, or even poverty.

Their commitment, in conjunction with partners such as Heartland Alliance and the Sargent Shriver National Center on Poverty Law, is to build broad-based support for the solution we recommended in Coming Up Short: establishing a statewide Auto Individual Retirement Account (IRA) program.

The proposed Illinois Auto IRA program would establish a retirement savings account program and automatically enroll workers who do not have access to an employer-based retirement savings option. Workers would be able to opt out of the plan. Participants could take their retirement savings from job to job without penalty. Savings in the plan would receive the favorable tax treatment accorded current IRAs and Roth IRAs.

Woodstock and our partners will be trying new approaches to build support, including outreach to new legislative partners, media, businesses, trade groups, and women’s groups.

With millions of Americans are approaching retirement without adequate savings, now is the time to act. An Auto IRA program can help Illinois support its workers and economy while preventing a full-on retirement insecurity crisis in the future.

Read the full Commitment to Action.

About CGI America
The Clinton Global Initiative (CGI), an initiative of the Clinton Foundation, convenes global leaders to create and implement innovative solutions to the world’s most pressing challenges. Established in June 2011 by President Bill Clinton, the Clinton Global Initiative America (CGI America) addresses economic recovery in the United States. CGI America brings together leaders in business, government, and civil society to generate and implement commitments to create jobs, stimulate economic growth, foster innovation, and support workforce development in the United States. Since its first meeting, CGI America participants have made more than 200 commitments valued at $13.4 billion when fully funded and implemented. To learn more, visit cgiamerica.org.

The spring legislative session of the Illinois General Assembly has come to a close. This year, Illinois has taken some giant steps forward in combating poverty and creating greater opportunities for low-income individuals and families in Illinois. IABG, working with our partners across the state, advocated for expanded access to savings opportunities and tools that people need to become financially secure.

Eliminating the TANF Asset Test:
The Illinois General Assembly voted to eliminate the TANF Asset Test last month – removing a significant savings barrier facing families. The TANF Asset Test has prevented our poorest families from building the savings they need to weather unexpected expenses and become financially stable. By eliminating the asset test we save the state in much needed administrative costs and allow families to preserve the few resources they have, like emergency or college savings, and avert financial disaster.

Expanding Retirement Savings:
We moved closer to making an Automatic IRA program a reality in Illinois. With more than 50% of all private sector workers lacking access to an employment-based retirement savings account, we are seeing more and more people retire into poverty. An Automatic IRA program would ensure that all workers have access to this important savings tool. This year IABG partners – including SEIU Healthcare, AARP Illinois, the Sargent Shriver Center, and the Woodstock Institute – testified in a subject matter hearing in front of the Senate Licensed Activities and Pensions Committee.  In addition to gaining more legislative sponsors, our retirement savings coalition has expanded to include grassroots community organizations, labor unions, businesses, financial services partners, and advocates.

Other Successes This Year:
Heartland Alliance, together with amazing partners, successfully advocated for additional changes that combat poverty:

• Health care: 342,000 low-income Illinoisans will now have access to health care because the coverage gap in the Medicaid program will be closed.
• Employment and Justice: People with criminal records will face fewer barriers to employment. Learn more.
• Housing: Renters in foreclosure will be able to stay in their homes and be given enough time to make safe moves for themselves and their families. Learn more.

Over the next few months, IABG will be traveling across the state hosting roundtable discussions on the racial wealth gap and how an asset building agenda can address growing inequality. We hope to engage communities more deeply in our policy agenda as we get ready for the next legislative session. If you are interested in co-hosting a discussion in your community, please contact Lucy Mullany.

Last month I participated on a webinar hosted by the UCLA Asian American Studies Center and PolicyLink on the the racial wealth gap and Asian Americans. The webinar included findings from their recent report on the Asian American population and asset building trends in Illinois which shows that that the racial wealth gap exists for Asian Americans in a different way than is typically seen for other groups like African Americans or Hispanics. See below for their full Narrative & Technical Reports.

Examining the Asian American population in Illinois, the reports found:

• Population: Asian Americans are the fastest growing ethnic group – expanding by 42% between 2000 to 2010 from 482,000 to 683,000
• Nativity: 68% of Asians in Illinois are foreign-born
• Language: A third of Asian Americans in the state have Limited English Proficiency (LEP) which is 3 times higher than the total population.
• Education: Asian Americans were more likely than any other major racial or ethnic group to earn a high school diploma, Bachelor’s degree, or a graduate degree.
• Income: Asian Americans had a higher median household income than other major racial and ethnic groups. However, because household size has a large impact on overall economic security and Asian American households tend to be larger, the report also looked at per capita income where they found Asian Americans earned less than Non-Hispanic Whites.
• Poverty: The poverty rate for Asian Americans was generally lower than the total population
• Social Security & Retirement: Given some of the language barriers and high percentage of foreign-born individuals, Asian Americans had lower proportions of households with Social Security or retirement income when compared with other major racial and ethnic groups.
• Housing: While Asian Americans had lower homeownership rates than Non-White Hispanics, they had higher home values. However, they had a higher housing cost burden than some other groups. This could be due to larger self-employment rates among Asian Americans, which prevents them from accessing traditional mortgage product with lower interest rates.

It’s important to note that within these numbers there is much diversity. When you look at individual indicators of the racial wealth gap, such as income or education, the difference between Non-Hispanic Whites and Asian Americans is relatively small. More significant inequality becomes present when examining Asian sub-groups. Certain sub-groups like Vietnamese, Koreans, or the fastest growing sub-groups in Illinois South Asians (Bangladeshis, Sri Lankans, and Pakistanis) experience more financial insecurity than more established sub-groups like Filipinos or Japanese who largely immigrated to the US earlier.

This speaks to the fact that the Asian American population is so diverse. Within the group there are many ethnic, cultural, language, and religious subgroups that each has their own history and unique experience in the U.S. We shared this report with the Chinese American Service League (CASL), an IABG partner. According to CASL, their experience is similar. CASL finds that many bank products are not accessible to their participants because of language barriers or lack of a sufficient credit history. Yet CASL has found that culturally many of their participants see buying a home as planting roots in a new land. It provides an important sense of belonging. Thus, they see many families put most of their income towards their home, their biggest asset, with little able to go towards their retirement.

Over the next few months, IABG will be traveling across the state hosting roundtable discussions on the racial wealth gap and how an asset building agenda can address growing inequality. We hope to engage communities more deeply in our policy agenda as we get ready for the next legislative session. If you are interested in co-hosting a discussion in your community, please contact Lucy Mullany.