Asset Building News Week - September 2, 2016

Highlights from this week's news stories

Photo: Cube 29 / Shutterstock.com

Featured Story: A Big Week for Secure Choice

This week saw two major victories for secure choice legislation in both Connecticut and California. Last week’s News Week reported that the California Assembly passed Secure Choice legislation, this week “the California Senate approved legislation to set up a state retirement savings program...that would provide coverage to nearly 7 million small-business employees in the state who lack access to workplace plans,” reports Penelope Wang for Time. It’s expected that California Governor Jerry Brown will sign the bill despite industry opposition.

Those who oppose California’s program argue that the smaller retirement accounts won’t produce the economy of scale necessary to cover the administrative costs of managing them. Such a claim is simply not true says James Kwak. According to Kwak, the asset-management industry is afraid these public retirement programs—like California’s Secure Choice—will “...by virtue of their size, be able to negotiate low fees from fund companies. And [that]...workers will leave their money in [public] plans for the long term instead of venturing out into the private market....”

This all comes after the U.S. Department of Labor made public a final rule that helps states create public IRA programs for workers not currently enrolled in any sort of program. At the same time, the department also announced a separate proposed rule that would make it easier for cities and localities to create similar programs.

On Tuesday, Governor Dan Malloy signed the bill creating the Connecticut Retirement Security Program. While Governor Malloy originally signed the bill back in May, his office held a more official affair earlier this week. AARP Connecticut live tweeted the occasion.

News Highlights: City Living and Men of Leisure

Why the High cost of Big-city Living is Bad for Everyone

Cities like New York, San Francisco, and Washington, DC “have grown into centers of opportunity largely for those who already have [which] is not good for the cities, which need strivers to flourish,” says Mark Gimien in the New Yorker. These cities represent major hubs of innovation and while the economic boom is good for business, long-term residents continue to be pushed out by the rising cost-of-living. Unfortunately, there aren’t any short or even medium-term solutions. Building more housing takes time and often comes too late. Though it’s still a long-term solution, Gimien says there should be more of a focus on encouraging the migration of wealth to smaller cities. By spreading and reducing the concentration of wealth, we might be able to make city living more affordable.

Universal Basic Income Wouldn't Make People Lazy—It Would Change the Nature of Work

Citing the contributions of Darwin, Descartes, and Galileo, Quartz’s Joel Dodge makes a case for universal basic income (UBI). The introduction of a UBI, Dodge argues, could cause some people to choose to stop working, “[b]ut even if some people did stop working, they might wind up contributing to society in other meaningful ways.” The increased leisure time afforded to an individual whose basic needs are covered by UBI may be just what they need in order to jumpstart their creative processes—like Darwin, Descartes, and Galileo. Dodge argues that if we were guaranteed money to cover our basic needs, we might be less risk-averse and more willing to innovate (and create).

News in Brief: Black Wealth, Flawed Laws, Urban Homesteading, and More

  • “Union decline has exacerbated wage inequality in the United States by dampening the pay of nonunion workers as well as by eroding the share of workers directly benefitting from unionization,” says the Economic Policy Institute in its latest report.  
  • There was a time when Richmond, VA was the epicenter of black finance and black-owned banks thrived, what happened? The Atlantic's Alexia Fernández Campbell investigates.
  • Writing for CityLab, Jessica Leigh Hester visits Detroit where there has a been a recent explosion in urban farming as a means to achieve self-sufficiency in a struggling city.
  • “96,000. That’s how many fewer African-Americans are living in New Orleans now than prior to Hurricane Katrina,” writes Gary Rivlin for Talk Poverty. While white New Orleanians have arguably recovered from Katrina, the same can not be said for the city’s black inhabitants.
  • “[Inclusionary zoning] legislation would require cash-strapped Baltimore to pay $180 million to the developers of the...Port Covington project to build affordable housing there,” writes the Baltimore Sun’s Luke Broadwater, “Lacking such funds, the city has approved a waiver so the law does not apply to the development.”
  • In an op-ed for the LA Times, Steven Sharp makes the case for gentrifying parts of LA’s skid row in order to bring in the development necessary to improve the blighted area.
  • More women are working and attitudes surrounding women who work have changed writes Bloomberg’s Betsey Stevenson, but there’s still more work to be done in order to achieve true equity.
  • “The back-to-school season is the second-biggest shopping period of the year, behind Christmas. But while families will spend more than before, how they will do it — and where they will do it — varies widely,” reports the New York Times’ Rachel Abrams.

Events:

Reducing Poverty and Increasing Opportunity: Envisioning the Next 20 Years | Urban Institute | September 13, 2016

Housing in America: Preview Screening of “America Divided” with Norman Lear | Brookings Institution | September 14, 2016 

In Our Hands: A Plan to Replace the Welfare State | American Enterprise Institute | September 19, 2016

The 20th Anniversary of Welfare Reform: Lessons and Takeaways | Brookings Institution | September 22, 2016

Retirement Security in the New Economy: Access and Guarantees | Brookings Institution | September 23, 2016

Assets Learning Conference | CFED | September 28-30, 2016

Author:

Sade Bruce was a program associate in the Family-Centered Social Policy program at New America. She provided research and analysis on policies that impact access to economic resources and asset ownership.