Mayor Ras J. Baraka Launches “Community Financial Empowerment Day” Initiative At City Hall Press Conference
Newark, NJ – October 29, 2015 – Mayor Ras J. Baraka, Municipal Council President Mildred Crump, the Corporation for Enterprise Development (CFED) Project Director Arohi Pathak, New York/Tri-State Market Director for Citi Community Development Director Eileen Auld, and United Way of Essex and West Hudson Acting Chief Executive Officer Catherine Wilson held the first “Community Financial Empowerment Day” today at City Hall’s Lower Level Rotunda, located at 920 Broad Street.
According to a report prepared by CFED and its two private partners, entitled “Family Assets Count,” 70 percent of all Newark households, the highest of any major city in the nation, do not have enough savings to live at the poverty level for just three months if they lose a job, face a medical crisis, or suffer another emergency that leaves them without a steady income. These families live in a state of persistent financial insecurity known as “liquid asset poverty.” This issue is not limited to those living below the poverty line – 60% of households with incomes between $50,000 and $75,000 (well above the city’s median household income) are liquid asset poor. The report can be found at Family Assets Count.
“Too many Newark residents are unable to save money and build a better future for themselves and their families,” Mayor Baraka said. “Often it is because they have not learned about simple but critical tools that will help them become more financially secure. Financial Empowerment Days will bridge this gap, providing residents with vital information about credit, credit ratings, budgeting, free tax preparation services, and how to avoid predatory lending and other scams. Empowering our residents with the tools to achieve prosperity is critical to the success of our efforts to transform Newark into a city we can all believe in. I urge all residents to take advantage of Financial Empowerment Days to attend our events and learn how they can better manage their finances.”
Mayor Baraka responded to this crisis with the first of a series of “Community Financial Empowerment Days,” the first one being held in the City Hall Lower Level Rotunda today. The free event offered city residents information on a range of financial services, including credit counseling, budgeting and free tax preparation. Additional such days will be held at Centers of Hope and LISC Financial Opportunity Centers around Newark.
“The data presented today makes it clear that even families with middle-class incomes are stuck in neutral when it comes to their long-term financial prospects and many more are falling further behind,” said CFED Director Pathak, whose corporation compiled and analyzed the data.
The Family Assets Count report found that many Newark residents are not taking advantage of financial products and services that could help them move forward. For instance, just 38 percent of Newark residents receive the Earned Income Tax Credit (EITC), far less than those who are likely eligible. And less than 4% use free tax preparation services, which help residents access the EITC and other tax credits. Many residents (34 percent) don’t have a bank account; an equal percentage has a checking or savings account but still relies on predatory services such as check-cashing or payday loans, which trap users in a cycle of debt.
“Financial empowerment services and resources such as financial literacy programs, credit counseling and matched savings accounts can have huge economic returns for consumers,” said United Way of Essex and West Hudson Acting CEO Wilson. “Newark’s Financial Empowerment Days will provide much needed services to residents who may otherwise not have access to them.”
The data analysis by Family Assets Count shows Newark residents are facing a range of financial challenges:
- Communities of color are faring even worse than the overall population: 71% of African American households and 77% of Hispanic households in Newark are liquid asset poor.
- More than half (52%) of Newark households are “asset poor,” meaning they lack sufficient net worth (what they own minus what they owe) to subsist at the poverty level for three months in the absence of income.
- Just 22% of city residents own a home, compared with 64% nationally. Of those that do own homes, 68% (double the U.S. rate) are housing cost burdened, meaning they spend more than 30% of their income on housing. Among the majority of households who rent, 58% are housing cost burdened.
“This report by Family Assets Count paints a sobering picture of the financial tightrope that many Newark residents are walking each and every day,” said Ms. Auld. “But this data empowers municipal government and community organizations to develop initiatives, like the Community Financial Empowerment Days, which enable households to start strengthening their financial security.”
CFED empowers low- and moderate-income households to build and preserve assets by advancing policies and programs that help them achieve the American Dream, including buying a home, pursuing higher education, starting a business and saving for the future. As a leading source for data about household financial security and policy solutions, CFED understands what families need to succeed. We promote programs on the ground and invest in social enterprises that create pathways to financial security and opportunity for millions of people. Established in 1979 as the Corporation for Enterprise Development, CFED works nationally and internationally through its offices in Washington, D.C.; Durham, North Carolina, and San Francisco, California.
Citi, the leading global bank, has approximately 200 million customer accounts and does business in more than 160 countries and jurisdictions. Citi provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, transaction services, and wealth management. Additional information may be found at: http://citicommunitydevelopment.com | Twitter: @Citi | YouTube: www.youtube.com/citi | Blog: http://blog.citi.com | Facebook: www.facebook.com/citi | LinkedIn: www.linkedin.com/company/citi
The United Way of Essex and West Hudson, founded in 1923, is a non-profit organization that seeks to address the root causes of community concerns by aligning resources to best meet the needs of individuals, children and families through its service area. We serve a population of nearly 700,000 in thirteen communities in Essex and Hudson County. For more information about or how to get involved, visit our website www.unitedwayessex.org
For more information on the City of Newark, please visit our website
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