A new report says a third of people in Minneapolis and St. Paul don't have enough assets to cushion against hard times or get ahead.
One-third of households in those cities suffer from "asset poverty," compared to just 20 percent of Minnesotans and 25 percent nationally. One in 10 city residents, for example, lacks a car to get to work. More than one-third have poor credit scores, which can torpedo routine transactions such as renting an apartment or buying a house.
Income is critical for survival, but owning assets -- a house, a car, a savings account, for instance -- is what gives families the economic strength to survive rough times and get ahead, according to the Corporation for Enterprise Development (CFED), based in Washington, D.C. The research group came to Minnesota Tuesday to discuss its study and explore asset-building solutions to poverty.
"We have to do better," said St. Paul Mayor Chris Coleman, citing efforts in that city. "We're seeing the accumulation of wealth, but we're also seeing the accumulation of wealth inequality."
Jennifer Brooks, CFED research director, presented the report at a forum at the Northwest Area Foundation, where a range of government, social service and business officials talked about strategies to strengthen families and communities.
"We're doing some things separately, but we need to do things together," said Ron Elwood, supervising attorney at the Minnesota Legal Services Advocacy Project.
Local leaders, he said, might consider a Minnesota version of the Asset Development Coalition in Washington state. That group coordinates government and community efforts to teach financial literacy at all ages, increase home ownership, develop small businesses and enhance saving, education and stable families.
"Asset poverty is a concept that's been around for a few years, but it's just now getting traction," Elwood said. "It's something everyone can understand -- enough resources to get by when your car breaks down or somebody gets sick."
Changing the future
The report, commissioned by the Northwest Area Foundation, is intended to spark debate and action to strengthen households and communities, Brooks said. Similar studies are being completed for cities in three other states.
"In some ways, the numbers tell us what we suspected," Brooks said. "But with hard data and some ideas about what to do, people can focus on action to change the future."
Among the report's key findings: While more than 63 percent of whites own homes in the Twin Cities, just 23 percent of blacks in Minneapolis and 26.4 percent in St. Paul are homeowners.
Another: In Minneapolis, 26 percents of whites live in asset poverty, compared to 63 percent of blacks, 57 percent of Latinos, 52 percent of American Indians and 34 percent of Asian-Americans.
Asset poverty also is strongly linked to single-parent families and lack of education, the report showed.
Asset sufficiency is defined as assets worth at least three months of income at the poverty level. That is $3,677 for a family of two, or $4,632 for a family of three.
Key strategies for change include programs that connect people to financial counseling and education, ensure they get existing tax credits and supports, create opportunities to build savings and crack down on predatory high-cost lenders.
"This is not creating new institutions, and not necessarily getting new funding -- especially in today's economy," Brooks said. "It's being creative, working together and building on what we already know how to do."
To read the reports for Minneapolis and St. Paul, go to www.nwaf.org and look under News & Noteworthy.
Warren Wolfe • 612-673-7253