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Thursday, May 22, 2008

Plans to Increase Income Must Include Financial Literacy Education

The Allied Drive Task Force recently produced a report that serves as a reference toward responding to employment and employability issues on Allied Drive. I forwarded my thoughts on the report for the Task Force to consider as follows:

To Whom It May Concern:

Upon reading the Employment and Training Report that was prepared for the Allied Task Force, I wanted to extend my appreciation to those who participated in the production of the comprehensive report that serves to coordinate many of the great services available to residents on Allied Drive. As an Allied Drive-city property resident with formal and informal experience with employment and job development for Allied Drive residents, I had one thought that I wanted to share with the Task Force to consider working into the report.

I have worked for nearly three years helping Allied Drive-area residents connect with employment opportunities working as a job developer to support employment and training staff on Allied Drive, and also as a resident, I have socialized with many of my neighbors through the years. One observation that I have made is that even with best programs and the best resources, it is very hard to meet employment objectives without addressing the need for a shift in cultural and societal values among my neighbors.

I have participated in professional and personal outreach among many communities on Allied Drive, including the expansive Latino and Asian communities. It saddens me that although ethnic cultures and even the languages we speak can be so different, one thing can remain so constant - many of us are in a crisis/survival mode that causes us to fail to look at the big picture. We are often so focused on the crisis of the day, whether it be the threat of our lights being turned off or an eviction notice, or any other such mishap, we often fail to have to ability to look three years down the line and make decisions that would benefit our long-term future.

More times than I can count, I have witnessed my neighbors not showing up to work because they were offered a one-day job that offered cash on the spot. It may not make sense to an outsider looking in, but it is very likely that individual needed cash today, and waiting for a first paycheck in two weeks was not feasible for the crisis being dealt with today. I have been in similar crunches, and in hindsight of my own situations, I can think of many responsible ways I could have responded to the crisis at hand that would have prevented financial devastation caused by things such as payday loans. However, when you are in the heat of the moment within an air of crisis caused by being around so many other people who are also in the midst of a crisis, there is a lack of sound rationale to help us navigate around financial emergencies so we often make decisions without fully evaluating the long-term impact of our decisions.

They say that the average American is two paychecks away from being homeless. I firmly believe that many Allied residents are only one paycheck away, and I speak of this from experience. In the three years that I have lived in what is now the city-owned properties, the financial fires I put out are barely at bay. My income is not the issue, rather the errors in judgment I made in my past haunt me constantly. Many of my neighbors have similar skeletons, whether it be enormous restitution fees owed to the courts, or child-support that is backed up to five-figure amounts. Our past skeletons serve as barriers in allowing us to move forward in more ways than one, and just getting a good job is not the full answer. Many of my neighbors have tried to go back to school but were ineligible for student aid due to past defaulted students loans. We can't legally drive because of thousands of dollars owed to the state for various past driving violations. We need financial education to help us learn how to legitimately navigate around these issues, many of which have easy solutions that we could easily learn with the right training.

The line between our day-to-day survival and being homeless and penniless is very fine here. In many of these situations, income is not the issue. I, along with many of my neighbors have household incomes (sometimes reportable, sometimes not reportable) exceeding $50k per year, however if our liabilities exceed our income, it really does not matter, we are all still in a big hole.

In my opinion, if we are unable to manage our income and expenses while making $10k per year, it is highly unlikely that our spending habits or our money management skills will improve with more money. It is necessary for all of us to gain an understanding of how to really manage money, and furthermore, how to effectively build wealth. Many of the crisis situations my neighbors and I experience are rooted in finances. If we can somehow invest some time and energy in teaching ourselves good financial habits, many of those crises will be eliminated, and perhaps we will make sound financial decisions that will impact our long-term future.

There are many financial literacy programs in Madison, and there are also many successful residents on Allied Drive that have gone from making $8/hour to $15/hour in less than a year. All these individuals need to be identified and I think that they would be instrumental in helping their neighbors achieve similar successes.

In conclusion, I would say that we need two things: firstly, residents need counseling to determine if full-time hours are feasible for them within the lifestyle they are currently living within. If not, then a part-time job could be springboarded into a full-time opportunity after several months of easing into a job-centered lifestyle. Secondly, financial literacy training that relates to the residents and responds to the sorts of crisis we face is required. I would urge the program to include education that would help residents proactively respond to festering situations before they explode and ultimately exercise sound judgments in the future on their own.

Thank you for considering my ideas and I look forward to seeing the fruits of our labor!