Asset Building News Week, December 15 – December 19

article | December 19, 2014

The Asset Building News Week is a weekly Friday feature on The Ladder, the Asset Building Program blog, designed to help readers keep up with news and developments in the asset building field. This week's topics include wealth inequality and the racial wealth gap, retirement security, prize-linked savings, and individuals with disabilities.

Wealth Inequality and the Racial Wealth Gap

According to new analysis from the Pew Research Center "The wealth gap between America’s high income group and everyone else has reached record high levels since the economic recovery from the Great Recession of 2007-09, with a clear trajectory of increasing wealth for the upper-income families and no wealth growth for the middle- and lower-income families."


The median upper-income family now has 70 times the wealth of the median low-income family, according to the analysis. Pew also helpfully defines the parameters for the different income groups, as shown by Neil Shah of the Wall Street Journal. Shah also writes that this outcome isn't necessarily a surprise, "Many aspects of the recovery, and the Federal Reserve’s stimulus policies, have benefited the rich over others."

Pew Research also released analysis showing the increasing size of the racial wealth gap. Whites now have wealth 13 times greater than Black families, and 10 times greater than Hispanic families. Jordan Weissmann writes that the Pew numbers may be too generous in their methodology, and that the actual state of the Racial Wealth Gap may be much larger. Weissmann also helpfully connects the new Pew numbers to Ta-Nehisi Coates' landmark essay on reparations.

Retirement Security

Only about half of Americans can expect to maintain their standard of living in retirement, according to new research from the Center for Retirement Research. Fortunately, there are some promising steps being taken toward promoting greater retirement security.

Earlier this month, the Illinois legislature passed a bill that would create the Illinois Secure Choice Savings Program. The bill closely follows the California Secure Choice program, which was the first to be authorized in the country. But while the California program has been tied up in a feasibility study since last year, the Illinois program can proceed immediately. All that is required now is the governor’s signature, which he has vowed to give before he leaves office next month. Lucy Mullany in New America’s Weekly Wonk this week described how the program would work and what it means for retirement security in the state. Some financial service providers have expressed their disapproval of the program because they claim it will serve as competition to them. Other advisers and service providers take a more measured approach and acknowledge that the program could be good for everybody and bring in more clients as more workers build up nest eggs in the program. Mark Schoeff for Investment News summarizes both arguments.

On Monday, the Treasury Department released its final rules for implementing the myRA program. The accounts will offer a safe, “starter” retirement account to workers who cannot participate in an employer-sponsored plan. The Treasury has already set up an informational website to walk employers and employees through the process of offering and opening accounts. Jamie Hopkins for Forbes gives a quick overview of what is in the regulations. Nick Thornton for BenefitsPro also marks the announcement of the regulations.

Prize-Linked Savings

President Obama signed the American Savings Promotion Act this week, legislation intended to remove federal barriers to prize-linked savings accounts. Stuart Butler, a long-time champion of PLS at the Heritage Foundation, writes about what PLS means from his new perch at the Brookings Institution: "The approach to savings recognizes that the emotional impulse of a large but uncertain prize can be stronger for many people than the incentive of a steady return on an investment. But unlike those who play and lose on the lottery, a “loser” with a PLS account ends up with a bundle of savings, so in fact, there are no losers at all."

While the bill removes many barriers to PLS products, financial institutions won't be able to participate everywhere, state gambling laws may still prevent PLS products, as Steven Koff writes for

Individuals with Disabilities

The Senate passed the Achieving a Better Life Experience (ABLE) Act this week. Legislation that will create special accounts to allow individuals with disabilities and their families to save up to $100,000 without losing their access to SSI and Medicaid. The National Disability Institute says the bill is a "major victory" and passes along 10 Things to Know About ABLE Accounts.

What had been close to unanimous support for the ABLE Act within the disability advocacy community was shaken when Congressional leaders restricted ABLE Accounts to those who become disabled before age 26, and paid for the bill with controversial offsets. The Arc reflects some of that disappointment in their statement on the bill, "Our efforts will not be finished if President Obama signs this bill – The Arc will continue to work with the leadership and chief sponsors in Congress to expand this program in the future to ensure that everyone in need can get the maximum benefit from this legislation. We remain disappointed that certain pay-fors remain in the bill,” said Peter V. Berns, CEO of The Arc.

Quick Hits

Jim Tankersley has a tremendous series on the rise and fall of the American middle class, take the time to give "Liftoff & Letdown" a read in the *Washington Post. *

Do unpredictable work hours harm chances for upward mobility? Richard Reeves investigates for Brookings. (Spoiler alert: yeah, pretty much.)

The Upshot explores how the Scandinavian countries offer generous safety nets, extensive child care, and a robust job market.