Obama Cares about Improving Economic Mobility – But Where are the Specifics?

In his State of the Union address last week, President Obama called on Congress to play a role in reversing persistent trends of stagnant wages, deepening inequality, and stalled upward economic mobility. Obama asked to see renewed efforts to "build new ladders of opportunity into the middle class." And while he offered a few tangible and important solutions to these profound challenges (such raising the minimum wage, introducing a new mechanism for retirement savings, opening up the Earned Income Tax Credit to assist single workers without children), he failed to get into the details - the nitty-gritty of what these "new ladders" should look like. He also skimmed over any explicit acknowledgment of the work already happening across the country to build economic opportunity at the community level. 
 
This was probably a strategic move. The Pew Research Center recently reported that Americans are deeply divided on the value of government intervention on poverty. A hefty 44 percent of Americans agree "government aid to the poor does more harm than good by making people too dependent on government." Yes, this sentiment follows partisan lines - 65 percent of Republicans felt this way - but so did over a quarter of Democrats. This view that government isn't the right approach to solving poverty puts President Obama (and his speech-writing team) in a tight spot when it comes to making the case for more government investment in anti-poverty programs. 
 
Unfortunately, Obama passed on the opportunity to highlight an existing program that makes a compelling case for how strategic government support can help families over major barriers to economic success. For years, the Asset Building Program has been shining a spotlight on a small, federally funded program with a design that should appeal to both Republicans and Democrats: the Family Self-Sufficiency Program (known as FSS for short). The FSS program is little-known, modestly-funded, and under-explored, but it’s shown to be a promising lever that assists people as they boost themselves up the economic ladder. The program reduces reliance on publicly funded programs, supports participants’ work goals, and meaningfully improves the effectiveness of housing programs.
 
The FSS program operates within a broader framework of rental assistance programs - it's currently open to participants in the Section 8 Housing Choice Voucher program and residents of public housing. At public housing authorities across the U.S., participants meet with coordinators to identify and make progress toward a set of goals - finding a better paying job, attending classes or trainings to improve job skills, reducing debt, and charting a course to a more financially stable life. 
 
The program isn't just about jobs, although increasing earnings is a key focus. The FSS program brings the power of savings into the mix. Here's how that happens. As they earn more, FSS program participants accumulate savings in an automated escrow account that the housing authority manages. When they successfully meet their programmatic goals and graduate, they gain access to the amount they've saved and can use it to support a transition to homeownership or market-rate rental housing, educational pursuits, or another goal of their choosing. Thus the program combines ongoing rental assistance, with concrete support for hard work and a tool to accumulate some savings. 
 
To learn more about how the FSS program works and how it promotes upward economic mobility, check out this policy paper we published in December 2013. We took a look at the current research on the FSS program and spoke with program staff about how to improve it. The paper synthesizes this information and makes a set of recommendations oriented toward helping the program have its full potential impact. Programs like this one should be front and center of any effort to build and maintain the “opportunity agenda” Obama referred to during his speech. As he put it, "Opportunity is who we are. And the defining project of our generation is to restore that promise." With adequate support and some modest improvements, the FSS program can be part of this project – creating the ladders necessary for people to create their own opportunity and move up economically. 

Author:

Hannah Emple