Rawlings: We Must "Take Notice" of High Number of Dallasites So Close to Asset Poverty

Categories: City Hall, Events

MayorMikeRawlingsatGrowSouth.JPG
Photo by Anna Merlan
Rawlings at his GrowSouth presentation in the Cedars on Monday
If you need a new benchmark to measure just how broke you are, try "asset poverty." Asset-poor households would be unable to survive for three months at the federal poverty level if some crisis caused them to lose their source of income. As Robert mentioned earlier, asset poverty is the subject of a new study conducted by the Corporation for Enterprise Development (CFED) and funded by the Communities Foundation of Texas (CFT) and the Thomson Family Foundation. It's also a frightening problem in Dallas, affecting some two out of five people, or 39 percent of the city's residents.

"These numbers should shock us," said Mayor Mike Rawlings this morning at a packed press conference at the CFT headquarters. "They should make us sit up and take notice."

The mayor seems preoccupied with income inequality these days; earlier this week, he presented his 10-point plan for revitalizing southern Dallas . Today, he told the CFT audience, "In America, we're moving into a society with two classes: those with assets and those without. For the first time in Dallas, we understand where that divide is. Four out of 10 people in Dallas are at that level. ... Too many of us are one paycheck from falling into dire straits. We have to think about that."

Just to put things into perspective:Tthe amount needed to sustain someone for three months at the federal poverty level is $4,362. That means 39 percent of Dallas residents wouldn't be able to scrape that amount together if they lost their income, even if they sold the house and the car. Given that half of low-income residents also don't have health insurance, that means that many people are just one medical emergency away from utter financial devastation.

Sarah Cotton Nelson, the chief philanthropy officer for CFT, said that before this new study was conducted, the data on poverty in this region was at least a decade old. The new information makes a few things starkly clear: The rate of asset poverty in North Texas is at least three times the national average, and it's disproportionately affecting black and Latino families. While 21 percent of the white population struggles with asset poverty, it affects fully 50 percent of the black and Latino populations.

According to Ida Rademacher, the VP of policy and research at CFED, that means even families who currently earn a livable income aren't far at all from falling back down the ladder if catastrophe strikes. "There's a 45 percent chance that African-American families who are solidly middle income will be in the lowest income bracket just one generation later," she said.

Rademacher also said assets like bank accounts, insurance and home ownership are important not just financially, but socially and psychologically. Having a bank account, she said, "promotes long-term thinking and planning." Research shows that children who have a college fund, no matter how piddly, are four to seven times more likely to go to college. "They feel they have skin in the game," she said.

The mayor and Rademacher both explicitly drew links between asset poverty and lack of education. "Over 50 percent of high school degree-only households are asset poor," Rademacher said.

The link between between education and asset income, Rawlings said, "is so highly correlated you can't miss it." He wants better "financial literacy" education for high school students. "I'm amazed our children can graduate from high school with no clue of what a bank loan is or what a credit rating is."

Other factors for keeping people in asset poverty include being a single parent, renting instead of owning, or being "unbanked" or "underbanked." Unbanked people have no checking or savings accounts, meaning they have to use check cashing places, which generally charge high fees for their services. "Underbanked" people have accounts, but continue to rely on what Rademaker called "alternative financial services" -- check cashers, payday loans, rent-to-own plans and pawn shops. Eighteen percent of Dallas residents are unbanked. (Incidentally, that's something the Budget, Finance and Audit Committee heard about a few weeks ago: A city program called Bank On Dallas now exists to teach people about savings and financial literacy.) And a full 68 percent of Dallasites have subprime credit; with poor "financial resumes," they struggle even harder to get out of poverty, Rademacher said.

What wasn't immediately clear is just what to do with this terrifying data. This is a new, brutally depressing spin on the old problem: If you're poor, you stay poor, and the odds stacked against you get higher and higher as the social safety nets we've built deteriorate (something Rademacher pointed out as well).

Representatives from the Federal Reserve Bank of Dallas, the United Way and the YWCA talked about the importance of financial counseling, to teach good savings practices, to help improve credit scores and to stay away from predatory services. But as Megan McTiernan, executive director from the Thomson Family Foundation pointed out, "This doesn't change overnight. This is entrenched poverty." On March 29, CFT will hold a workshop for nonprofit agencies who serve the working poor, to teach them how to use the data from the new study.

"I am committed to working together on these issues," Rawlings said. "If we make progress in Dallas on any one issue in the next 10 years, may this be the top of our agenda."

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18 comments
Mister_Mean
Mister_Mean

Perhaps the problem is that the poor are constantly spending all their monies at those high end projects blessed by the city council like Victory plaza and renting those high end tax subsidized projects that the city council is constantly supporting.   Before anyone gets on my case I am commenting sarcastically in that every single time I look at the news Dallas is granting tax abatements to moneyed investors (private profits and public risk), and pushing projects that benefit only those who have $$$$ to spend at them.    No money for libraries, no money for parks,  but lots of tax monies for suspension bridges, toll road studies and horse ranches to name just a few of the constant list of must haves that the city council and staff burdens us with-all so they can chant that “Dallas is a world class city Ya all-so come down and visit us and help us pay for this (the plan to have out of towners pay for all our retched excesses).

Mike
Mike

NTX is at 29%, TX is 28%, and US is 27%. The problem is Dallas and Dallas County. Isn't the issue as soon as someone, of whatever race, gets some assets, he or she moves the family out of the city and county? Why are they, all races, leaving Dallas?

Oak Cliff Townie
Oak Cliff Townie

MAYOR MIKE,Lead by example the next time a business comes wanting A TIF Thingy or a Tax break or just out right cash to do something you tell them "NO" and advise them to get their financial house in order so they may achieve on their own.

Most payday loans ads have this disclaimer *LOANS ARE MADE AND APPROVED BY AND UNAFFILIATED THIRD PARTY LENDER *

Which banks would that be MIKE ?

Corporation for Enterprise Development (CFED) and funded by the Communities Foundation of Texas (CFT) and the Thomson Family Foundation. Looks like some folks have found a nice gig reinventing the wheel !

Want to magically lift folks out of poverty ?

Pay a living wage for this city !

I am not saying they have to but it seem this bunch is searching for an answer and not looking at the root cause.

holman
holman

It's a balance sheet, really.

4 in 10's principal asset is government. The full faith and credit of the United States.Which also represents the principal liability of the 4 in 10 ignored in the report.2 in 10 work for government.And since 43 cents of every dollar spent must be borrowed and added to the Public Debt each year . . . . the equation is not "sustainable", hence;10 in 10 are under increasing stress. 

Guest
Guest

It is even worse if you are disabled. Social Security does not start for six months, if you are able to get approved quickly. Sick leave pools do not cover the time one has to take off for disability.  Disabiltiy insurance takes every cent out of your hide.  If you could jump through all their hoops you would be able to work.  If you can't manage, you are being uncoperative and they will dump you.  You are expected to live on air for six months, while paying big bucks for nsurance.  To be disabled, you probably have high medical bills in the first place, which means no savings.  With only two in our household and both on disability, our checks from Social Security = $2,917.00. If the disability insurance doesn't cut my check off again, I get an additional $1,101.49.  That leaves us with a total of $4,019.49 a month.  With that we are expected to pay all of our expenses, including Medicare preminum, secondary medical insurance preminum, all dental bills, glasses, hearing aids, and wheelchairs; then electrictity, gas, gasoline, food.  He has college degree, and I a masters.  We worked for over 40 years, and we now have no savings and money.  We are struggling to pay basic bills and the ever increasing costs of living.  No vacations, no one to help us keep our home maintained, gas prices  keep us home, libraries close too early and stay closed.  We are both too sick to attempt trying to work.  If I earn $.50, the disability insurance will take it out of my check, like they take the amount Social Security pays us.  My employer's contract with the disability insurance company is basically in the company['s favor leaving the employee no rights or recourse if the company practices abusive practices.  And we are not as bad off as most people with disabilities.  Did I mention, we make too much for most of the services such as Medicaid, food assistance, etc.

Diane Birdwell
Diane Birdwell

Again, the mayor is typical of people who claim they know something about education, because they once sat in a desk.

We DO teach a semester long class in Economics. We DO cover basic financial literacy, the market system, investments and general economic theories. It is a survey type course, but yeah, Mayor, most kids in DISD DO NOT know about finances from their parents.

So how about you quit worrying about charter schools and help us convince businesses to HIRE teens? Nothing teaches about "opportunity cost" and "net pay"  and "budgeting" than a paycheck in a teen's hot little hands.

Overr here in Far East Dallas, we have very few job opportunities for the kids I teach. Why not help us develop some tired out strip centers, build on vacant land along I-30 or push for the type of development I see on I-30 and Cockrell Hill? I-30 in Rockwall? You know, we have money to spend here, too.

Mister_Mean
Mister_Mean

Yes I know one fellow who had a small business.   He was taxed out of his home and business by the city, county, DISD and the appraisal district.  When he sold his property it was at half the value the county had it valued at.  He is homeless now.   Oh but we have suspension bridges and arts parks. Of course the local governments can’t  (or will not) control their spending-wasting tax monies on consultants (could not find their arse from a hole in the ground with post it notes to show them the way), suspension bridges, opera houses, and endless studies to keep the sewer toll  road alive.

Clipper
Clipper

Mike certainly knows obfuscation.  What's next from his pulpit ?  I recall he was elected to be Mayor of Dallas !

Amy S
Amy S

Yeah, yeah, yeah, tell it to the college graduates with a mortgage worth of student loan debt and no job.

Chaosmotic
Chaosmotic

$30,000 for a broken ankle and I lost my house. Thanks Dallas. 

cp
cp

Wait a sec... $4 grand a month is roughly $80k a year...

Redpeacocksmile
Redpeacocksmile

People like Diane birdwell should not take advice from cats. Choosing to go to a&m in 82 explains most of it.

Mike3647
Mike3647

If you think local governments can't control spending, don't look at the feds.

Diane Birdwell
Diane Birdwell

And WHY do they have that much debt? Did they not work in high school or  have parents who saved money? If they were poor, did they consider going to a junior college first? What major did they choose?

I grauated from Texas A&M in 1982 with a BA in Political Science. Seriously, what was I thinking? I went to an engineering university to get a liberal arts degree, that by 1982, was worth nothing, since Reagan froze federal hiring.

BUT, I graduated without one penny of debt. I worked my ass off, had saved some money, lived really cheaply and used Eastfield for basics. I became a high-speed, low drag waitress for a couple of years, alongside many others in the same way.

NONE of us complained or blamed anyone else. We got on with life. We parlayed our degrees into real lives, and saw that in all things, struggle strengthens.

cynical old bastard
cynical old bastard

 Please explain what the City of Dallas had to do with losing your house?

Mister_Mean
Mister_Mean

At least with the Federal government there is a bit of fact basis (income and the allowed deductions).  With the local taxing authority you have the appraisal district that bases their values on a “what if” criteria.   “What if your business did this like that one (that is totally unrelated) over here-well lets just pretend that you did and your values would be this so lets tax you at this  imaginary value.   Oh and by the way it is just the value if you don’t like your taxes complain to the city (county or DISD).”   When you complain to them they point to the appraisal district.  They both claim “its not our fault it’s the other guy”.   Anyway I also could point out the shenanigans in local spending too.    My point is that the local taxing entities affect you perhaps more than the Federal government and there too is no control on local squandering.

Wylie H.
Wylie H.

...and breaking your ankle.

Guest
Guest

He broke it digging for the buckets of money that Tom Leppert buried around Dallas somewhere.

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