Opinion: Asset limitations are an important, albeit often overlooked part of America’s structural racism that feeds the racial wealth gap
People’s need to have a true financial cushion existed long before the coronavirus emerged and will continue after the pandemic ends. For the millions of Americans who have no savings and who often cannot meet recurring expenses with their income, every unexpected expense threatens to push them off the financial cliff. They cannot cover the cost of a flat tire, a visit to urgent care or even a higher-than-usual utility bill.
Blocking the lowest-income households from accumulating needed rainy-day funds simply because these people are forced to turn to the government for help leaves them forever dangling on a financial cliff. The policy’s racist roots also, as implicitly designed, feeds the racial wealth gap. While some low income households are not in a position to save at all,have shown that removing asset limits significantly increases the liquid savings of low-income households.
Covid-19 will pass. But we must learn from its effects and the racism embedded in public programs that it has exposed. Now is the time for Congress to turn its attention to the ASSET Act and to the benefits of eliminating asset limitations for key public assistance programs. Going forward, families must be able to save for their own small economic turmoils, and the structures that perpetuate the racial wealth gap all must be dismantled.
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