A New Day: Financial Security and the Role of Nonprofits

Haidee Cabusora | Chief Program Officer | The Financial Clinic

 

Today’s talk of fiscal packages comes as critical relief to millions of Americans. The proposed support is intended to help the first circle of victims; those who are affected directly by COVID-19 will receive $100 million in the form unpaid leave, unemployment insurance, and free testing. It pierces through a fog of terrifying health statistics, words repeated over and over again (unprecedented, flatten, video conference), and eerie silence. 

From a government that often seems in political paralysis, decisive action to meet the rising acceptance of a deep economic crisis is relief in its own right.

And the good news doesn’t end there; stimulus packages are being actively debated and negotiated as relief widens to individual checks, sector bailouts, and small business support. These instruments are equally welcome and a sign of a government that sees the need and is willing to meet it.

We may applaud the motivation and the potential $2 trillion on the table, and we may still pause to consider what this means for working poor Americans. For decades, we have seen the slow shift of financial insecurity from governments and employers to low- to moderate-income Americans. Pensions and profit-sharing plans have disappeared. Wages stagnate. Public benefits are not indexed to keep up with inflation.

As long as we separate the deserving poor from the undeserving poor, our national policies will accept poverty as inevitable.

And while crises reveal that margins have cliffs (and that marginalized Americans will eventually fall off the edge), it shouldn’t take a pandemic to remind us that widespread unemployment, loss of income, lack of savings, no health insurance, unpaid sick leave, and insufficient childcare are essential components of financial insecurity. Further, according to a 2018 PolicyLink study, almost half of all people of color are “financially insecure,” living with incomes below 200% of the federal poverty level, with 53% of Latinxs, 51% of Blacks, and 53% of Native Americans considered financially insecure.1 Single mothers are more likely to be “financially insecure” at 71%2, and more specifically women of color who are disproportionately working low wage jobs.3

These factors existed before COVID-19 and, despite current attention to addressing them, will persist long after the pandemic unless we deliberately make different policy choices.

Our responsibility is to look up from the now that dominates and to consider the connections between past, present, and future financial insecurity. For decades, social service organizations and the communities they serve have tackled survival on a month-to-month basis. That experience is our strength today. We are trained and are ready to help. As the health crisis recedes, these same social service organizations will apply their skills to become the first responders to evictions, overrun benefits enrollment centers, and workforce development programs.

But a larger responsibility looms; as we look down the road, big battles will open up in the years to come.  Staying vigilant — not allowing the same placid acceptance that this is a reality of the modern American economy or, worse, subtly blaming the victims  — is crucial. Someone must pay for stimulus packages and the need for more support. When that happens, will nonprofits and those they serve be prepared to make the case through data, stories, and a unified voice? As we have recently learned, it’s never too early to start.

 

 

(1) PolicyLink (2018), 100 Million and Counting: A Portrait of Economic Insecurity.

(2) Ibid. 

(3) Institute for Women’s Policy Research and OXFAM

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