Tim Fernholz asks if simple savings plans are the first step to combating poverty:
The New York City Department of Consumer Affairs is housed on some rented floors near Wall Street, amid great banks that profited as millions of American consumers bought toxic loans and catalyzed a recession that drove further millions out of work. While the department doesn’t have jurisdiction over the big banks, it is often charged with cleaning up the messes they create. The office, which is painted in a decidedly un-bureaucratic neon-orange and royal-blue color scheme, features exhibits about the 40th anniversary of the Department of Consumer Affairs including a display of the brass weights once used by city officials to check merchants’ scales and prevent fraud. Until recently, the department’s core mission hadn’t changed much: Ensure that weights and measures are accurate and that truth-in-pricing laws are enforced.
When Mayor Michael Bloomberg was elected to a second term in 2006, he commissioned a group of New Yorkers, led by Geoffrey Canada of the Harlem Children’s Zone and Time Warner Chair and CEO Richard Parsons, to figure out innovative ways to fight poverty. One of the group’s ideas concerned the relatively modish anti-poverty strategy of asset-building — removing the structural obstacles that prevent people from building financial stability. “People in communities in which poverty is concentrated suffer not from an absence of ambition but from a chronic lack of access to capital,” the committee’s report observed. “The City should continue to educate the public on low-income banking and other services and create new programs to promote comparison shopping, savings and asset building.”