Many families in our community are struggling with a silent epidemic – income volatility.
“I can have a steady schedule but if it’s slow, they’ll send us home. Or, sometimes, we’ll work overtime. It depends.”
“My husband got laid off five months ago. I don’t know what he’s doing, temping here and there. He had a good union job.”
These are quotes from St. Louis community members who, like millions of their fellow Americans, experience month-to-month swings in income, making it hard to make ends meet, plan for the future, and save money.
According to an Urban Institute study, one in four American families are hit with unexpected disruption in income every year. For some, this volatility exists year-to-year, others see it as much as month-to-month or week-to-week.
These swings can cause family finances to spiral, especially when there are no savings to turn to. A survey conducted by the Federal Reserve found that 44 percent of adults are unable to cover a $400 emergency expense without selling something or borrowing. When faced with this kind of setback, households are forced to turn to unsustainable solutions like predatory loans that can leave them with more debt.
The issue of income volatility is not unique to St. Louis, but is exacerbated by other issues we face, including high poverty rates and stagnant wages.
There is a reason why the Ferguson Commission Report included calls to action around financial empowerment. In St. Louis County, 22 percent of black residents live at or below the poverty line. In the city of St. Louis, that number goes up to 38 percent. For white residents, it’s 15 percent – not insignificant either.
To live comfortably in the city, an individual needs to make $15 an hour. For three months last spring, we afforded our workers a $10 minimum wage – still significantly below what families need, but a move in the right direction. Then in June, our state legislature passed a law capping the statewide minimum wage at $7.70.
Many in our community are stressed and anxious. Many are living paycheck to paycheck.
Our community has taken to the streets because they are desperate for change. They crave opportunity and demand solutions. We are not delivering.
I am committed to helping our most vulnerable. The tough reality that we need to accept is that our most vulnerable population is larger than we think. People need access to responsible banking, they need higher wages, affordable benefits, and they need ways to manage income volatility. Unless we address income volatility far too many people and communities will never reach their full potential.
This is why I am partnering with the Aspen Institute’s Expanding Prosperity Impact Collaborative (EPIC), socially-responsible fintech company LendUp, and other national and local partners on Finance Forward, a series that explores solutions to income volatility nationwide. Our hope is that bringing solutions-focused conversations to St. Louis will further strengthen the financial empowerment efforts that are already under way.
Change will not come quickly, but it starts with listening to the concerns expressed by members of our community, concerns that are legitimate. And, it comes from engaging a cross-section of organizations and industries who know that St. Louis can do better and want to see the city reach its full potential.
In working with the Aspen Institute and LendUp, we have pulled together a network of national leaders from the Pew Charitable Trusts and the Urban Institute, as well as local stakeholders including Justine PETERSEN and Washington University of St. Louis.
All are ready to sit down to have a meaningful solutions-driven conversation.
St. Louis deserves better than the status quo, better than what we saw before the Ferguson Report, better than what we’ve seen since, better than what has unfolded in the last few weeks.
We can create economic opportunities for St. Louis families. We can create new jobs and good jobs, with fair, steady wages, and good benefits. We can provide families with paths to financial security.
Join us at 5:30 p.m. on Tuesday, October 17 for a reception followed by a panel conversation on the problem of and solutions to income volatility in St. Louis. To RSVP, call (314) 622-3434 or register at this link.
This piece originally appeared at The St. Louis American.