Why can’t people escape poverty? It’s not income, it’s wealth
If you heard the shocking statistic earlier this month that black women have a net worth of $5, then you must read Latoya Peterson’s personal account of the struggle to attain wealth and rise above poverty.
Peterson, who left home at 17, worked fast food and clerical jobs, which often have no benefits or savings plans. That means when hard times hit, there’s little to fall back on, since their meager wages just meet expenses.
Listen to her story:
When I left home at 17, I moved out with two garbage bags full of possessions, $1,000 meticulously saved from two different $7-an-hour jobs and not much else. I had no car. I had no driver’s license. I had no credit history. Even if I had received a blessing from my mother, there would be no cash to help out, no bestowal of funds my parents had saved in a college fund. I was on my own. As the report explains, the key to financial stability is wealth (for example, assets, savings, stock holdings, business income), which can be passed from generation to generation, to ease the path for those struggling in their youth. However, for the more than 46 percent of single-parent black households that have zero or negative wealth, there is literally nothing to pass on — many households are struggling to stay afloat, living from paycheck to paycheck.
This is one piece that “pull yourself up by your bootstraps” idealists miss. Maybe we do live in the land of opportunity. Maybe everyone is born with the chance to make it.
But we’re also born with baggage – positive or negative – the baggage our parents left us. For many white families, that’s credit, equity and savings due to having access to low-interest mortgage loans from the government. Black families, who for years were denied these loans, start out farther behind. It’s like starting a race with a weight strapped to your foot and a blindfold over your eyes.
Peterson says the solution to this is education. When she did land a job with a 401-k, a kind HR rep sat her down and told her how it could help her meet her financial goals.
With personal education, there also needs to be an education for the rest of us. To help us realize that Peterson is not alone. Her story is not an anamoly. This is the piece of the puzzle that keeps people mired in poverty, dependent on government subsidies.
Weeks ago, we were shocked by the statistic. I hope Peterson’s story helps it stay with us.