The March on Washington was a seminal moment in American history. As we reflect on where we are 50 years later, after policy advances like the Civil Rights Act, Voting Rights Act, and Community Reinvestment Act, we still see vast wealth inequalities between white households and households of color.

Financial security can be boiled down into two parts: income, which allows households to pay the bills and feed a family, and wealth, which is the amount of money a household has in checking, savings, and retirement accounts, or invested in their home, business, or other asset. With sufficient wealth a family can weather job loss or unexpected costs without having to take out costly loans or fall into serious financial hardship. Enough wealth allows parents to send children to college without burdening them with lifelong student debt. Enough savings allows retirees to enjoy their golden years in dignity. Wealth is access to the American dream. And perhaps most importantly, wealth, and the financial security associated with it, can be generational as financially secure parents can put their children through college, help them with a first home’s down payment, or, in cases of an emergency or job loss, provide a monetary bridge over financially difficult times.

Today’s racial wealth gap between White households and Latino or African-American households is massive. In 2009, Pew Research found that White households have 20 times the median net wealth of African-American households and 17 times the median net wealth of Hispanic households.

Unfortunately, in the 50 years since the March on Washington the racial wealth gap has grown  by a staggering amount. A recent study out of Brandeis University following households from 1984 to 2009, found that the racial wealth gap grew 300% in 25 years. Perhaps the most disturbing finding was that for every $1 increase in average household income over the 25 year study, White households increased their wealth by $5.19, whereas African-American household only increased their wealth by $0.69. This highlights, in stark terms, the unequal access to critical wealth building tools for households and communities of color.

Illinois Policies to Close the Racial Wealth Gap

Illinois Automatic IRA Program: More and more seniors are retiring into poverty. Over 53% or 2.5 million Illinois workers lack access to an employer-based retirement account, the most effective and utilized way to save for retirement. Low-wage workers have even less access to employer-based retirement accounts, and providing that access will help close the gap. An Auto IRA program will give Illinois workers the tools they need to retire with dignity.

Universal Children’s Savings Accounts in Illinois: Kids with a Children’s Savings Account (CSA) in their name are 6 times more likely to go to college. The aspirational impact of CSA’s makes it potentially one of the most powerful ways to reduce the gap. A Universal CSA program in Illinois would open up a CSA for every child born in the state, seed it with a financial contribution, and provide a match component for low-income families. This would create greater opportunity for low-income communities and communities of color to save for their children’s education.

IABG has held several Racial Wealth Gap Roundtables in Illinois communities, where community leaders shared how the gap manifests in their community and learned about the policies that contributed to the Racial Wealth Gap and the policies, like those described above, that can close it. Our next roundtable will be on Chicago’s West Side. If you are interested in participating in that event or would like for us to hold one in your community please contact Lucy Mullany.

In Illinois today, 39 out of our 102 counties are currently on a state wide Poverty Warning or Poverty Watch alert. With poverty touching so many of us across the state the Illinois Commission on the Elimination of Poverty and Heartland Alliance are looking to hear from YOU! If poverty has touched your life in some way your story can help shape key anti-poverty legislation.

The Illinois Commission on the Elimination of Poverty is holding two upcoming public hearings to listen to the public share both their personal stories related to poverty and their recommendations on policies the state should advance to cut extreme poverty. These hearings are specifically geared to make sure that the Commission’s work and recommendations are informed by the experiences of individuals living in poverty. Policy makers are listening – your voice can make all the difference.

The first hearing is being held in Rockford Illinois on Wednesday August 21st.  If you live near Rockford and have been personally affected by poverty you are encouraged to come out, share your story, and make a difference!

Rockford, IL – The Illinois Commission on the Elimination of Poverty

• When: Wednesday August 21st 2013
• Time: 6:00pm – 8:00pm
• Where: Zeke Giorgi Center – Auditorium, 200 S. Wyman  Rockford, Illinois 61101
• NOTE: Food will be served, transportation reimbursement for those who qualify – Questions contact Kim Drew kdrew@heartlandalliance.org / (312) 870-4948

The second hearing is being held in Chicago Illinois on Tuesday September 3rd.  Again, if you or someone you know lives in the Chicagoland area and has been impacted by poverty, you are encouraged to come out, share your story, and make a difference!

Chicago, IL – The Illinois Commission on the Elimination of Poverty

• When:  Tuesday, September 3rd 2013
• Time: 7:00pm – 9:00pm
• Where: Illinois Institute of Technology – McCormick Tribune Campus Center – Ballroom,  3301 S. State Street  Chicago, Illinois 60616
• NOTE: Refreshments will be served. Childcare will be provided upon request. Transportation reimbursement is available for qualifying individuals. Free parking available after 7pm in A4 Visitor lot (32nd and State) and D5 Visitor Lot (34th and State). Accessible via State St Bus, 35th St bus, Metra (35th Lou Jones Stop), Green Line – 35th / IIT, and Red Line- Sox 35th. Questions contact Kim Drew kdrew@heartlandalliance.org / (312) 870-4948

Please spread the word about these upcoming events and join us as we shape a better Illinois. If you are unable to attend but would still like to make an impact you can submit your comments and questions to Kim Drew (kdrew@heartlandalliance.org / (312) 870-4948) or post directly to the Illinois Commission on the Elimination of Poverty website (http://www2.illinois.gov/poverty/Pages/default.aspx). Your voice, your opinion, and your story can make a positive change for millions of families living in poverty in this state.  Policy makers are listening – your voice can make all the difference.

This is the second blog in a two part blog series on the Unbanked and the Uninsured.

In our first blog of this series we discussed the unique challenges facing unbanked households when they try to pay for health insurance.

An estimated 36% of currently uninsured households in our state have no checking or savings accounts and are effectively “unbanked.” The problem is that the vast majority of insurance companies require individuals to pay their monthly premiums via automatic withdrawal from a checking account. This means if you don’t have a checking account, you can’t get insurance.

In an effort to address this challenge, the Department of Health and Human Services released proposed rules that would require insurers to accept a menu of payment options, including paper checks, cashier’s checks, money orders, and prepaid debit cards.

In response to these proposed rules, IABG submitted a letter in partnership with 78 other organizations engaged with CFED’s Assets & Opportunity Network. The letter includes recommendations on how the Department and other state and federal agencies can ensure that a pathway to safe banking opportunities is a part of ACA implementation. The recommendations include:

• Deductions from Paychecks: Automatic withdrawals from payroll help facilitate on-time payment. Similar to retirement savings or social security deductions, payroll deductions for insurance purchased on the exchange will ensure regular on-time payments.
• Ability to Pay in Advance: If open enrollment in states across the country were aligned with tax time, consumers could pay for their premiums via their tax return. The Department of the Treasury should explore mechanisms for streamlining payments through resources consumers receive at tax time. Many Volunteer Income Tax Assistance (VITA) sites work with the unbanked population and can facilitate community outreach for this payment option.
• Use of Navigators: Navigators should be required to provide payment information to each consumer who is purchasing health insurance via the Marketplace. Navigators can be key ambassadors of this information. We recommend creating FAQs on payment options for this formerly uninsured population.
• Website Development: Each state will have either its own website or they will be referring people to the federal website to access the Marketplace. Payment information should be provided on the website and should be sent to consumers via email or traditional mail upon purchasing their insurance. Given that immigrants make up a significant percentage of the unbanked community, this information should be accessible in a variety of languages.

Pathway to Safe Banking

While we support efforts to ensure that the unbanked have access to health insurance through the marketplaces, we also strongly believe that DHS should use this as an opportunity to provide pathways to safe affordable banking. Being banked will facilitate on time payments which will ensure continuity of coverage and access to health care. While the alternative payments proposed by the Department are important to improve access to health care, they are costly and not a long term solution.  IABG will continue to work with healthcare advocates to implement changes that will create a pathway to banking.