Closing the curtain on poverty

Email|Print| Text size =96 + =

November 27, 2007=20

WILLY LOMAN never figured out how to strike it rich. Instead, the = tragic=20 character in Arthur Miller=92s play =91=91Death of a Salesman=92=92 = succumbed to=20 despair.

Governments could rewrite the script. Not with a get-rich-quick = scheme, but=20 by helping low-income people build wealth patiently, one step at a = time.

One useful tool is the individual development account. The accounts = offer=20 people a deal: Save a small amount of money each month, and the savings = will be=20 matched on a dollar for dollar basis, or even higher. So someone who = saves a=20 total of $1,000 could get a match of $1,000 or more. No one will = immediately=20 become Donald Trump. But the money can typically be used for a down = payment on a=20 house, education, or to invest in a small business. And programs can = require=20 people to take financial literacy courses.

It can be life-changing to help people acquire wealth such as savings = and=20 property, because, unlike salaries, these assets can be used for credit = leverage=20 and passed on to future generations.

Massachusetts just started funding these accounts, investing $500,000 = in=20 March and another $600,000 this month.

The funding goes to local organizations such as MIDAS, a = Brighton-based=20 coalition of nonprofit organizations. MIDAS is using its $200,000 to = fund five=20 projects, including a pilot savings program for entry-level employees of = CVS,=20 the drugstore chain.

Workers who save up to $500 to finance their educations will get = another $500=20 each from CVS and the state, for a total of $1,500. The nonprofit = organization=20 Jewish Vocational Service will educate workers about personal finance = and help=20 them pursue college. The three-year program will start with 50 workers = who could=20 start taking courses in the first year. There are plans to add another = 50=20 workers, and JVS president Jerry Rubin sees the potential for more.

Growth, however, will take more money. Massachusetts has many other = financial=20 commitments, but it could start doing research through the state=92s new = Asset=20 Development Commission. While it was created last year to make policy=20 recommendations, the commission has yet to be staffed. Governor Patrick = and the=20 Legislature should appoint members as soon as possible.

New efforts to build wealth in low-income communities are dearly = needed. The=20 Corporation for Enterprise Development, a Washington nonprofit that = promotes=20 economic opportunity, estimates that there are some 57,000 individual=20 development accounts nationwide =97 with room to add more. A bill in = Congress=20 would create 900,000 development accounts. Getting rich quick is hard. = But state=20 and federal governments could help many more people build wealth=20 responsibly. 3D""=20

MOST E-MAILED STORIES

rising

falling | Full=20 list | About=20

See=20 full list

HOT SEARCHES

=20

Closing the curtain on poverty

more stories like this

Most popular

MOST E-MAILED STORIES

HOT SEARCHES