Emergency Savings Incentive Needed to Grow a Strong Middle Class

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Media Outlet: The Hill

Reid Cramer wrote for The Hill about the disconnect between American's vision of "middle class" and their realities:

The American people have a clear vision of what it means to be "middle class," and, according to new data from the Pew Research Center, they see two central characteristics: having a secure job and being able to save. Unfortunately, more than 60 percent of Americans would have a hard time handling an unexpected $500 expense, according to a new survey from Bankrate. If saving is so central, and so out of reach for millions of Americans, it's no wonder many believe the middle class is in deep trouble. Americans need innovative solutions to help families build up savings that they can use as emergency aid in the short term.

The good news is that President Obama has noticed, announcing a new "Emergency Aid and Service Connection" in this week's budget to promote the development of nonprofit and municipally based solutions to help fill the gap in emergency savings. This $2 billion fund might also provide the public resources to seed and test innovative efforts that can give families access to the type of tools that support their financial resiliency. The even better news is that a research-tested and proven approach to boosting emergency savings is ready and waiting in legislative form.
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Author:

Reid Cramer is director of the Millennials Initiative at New America. Previously, he served as the Asset Building program's research director and as a co-director of New America's Next Social Contract Initiative.