Federal Policy to Advance Racial, Ethnic, and Tribal Health Equity (2023) / Chapter Skim
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3 Economic Stability
3 Economic Stability
Pages 133-178
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categories, economic stability is broad and includes employment and income,1 noncash benefits, such as Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) and Supplemental Nutrition Assistance Program (SNAP)
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Specifically, the chapter explores the following: the effect of incarceration and pretrial detention on income and wealth; the federal minimum wage; how administrative barriers and eligibility restrictions impact participation in federal social benefit programs; how nonprofit sector partnerships can play a role in poverty alleviation and emergency food assistance; the role of past policies, such as redlining and disparate access to benefits from the 1944 GI Bill, on inequities; policies to support savings and wealth accumulation, such as baby bonds; and access to safe and affordable banking services, such as bank accounts and low-cost credit. These examples include both policies that have intentionally perpetuated inequities (i.e., redlining)
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The median for White households was just over $74,000, compared to just over $48,000 for Black households, just over $51,000 for AIAN households, and nearly $58,000 for Hispanic households. The median among Asian households was just over $100,000 (Semega and Kollar, 2022)
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, whether household members are employed and work full time or part time (Cajner et al., 2017; Federal Reserve Bank of St. Louis, n.d.)
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. Over this period, it ranged from about 30–90 percent higher among Hispanic people than White people (Federal Reserve Bank of St.
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Louis: https://fred.stlouisfed.org/series/LNS14000003, March 3, 2023 (Federal Reserve Bank of St. Louis, n.d.)
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. Research has highlighted some similar and different explanations for the income gaps between White people and Black, Latino/a, and AIAN people.
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For example, among Hispanic people from different countries of origin, there are differences in economic resilience3 and security.4 Figure 3-4 looks at material hardship during the recent COVID-19–induced recession: Salvadoran and Dominican people were more likely to experience hardship, while Colombian and Cuban people were less likely, indicating greater sources of economic resilience within those groups (Scherer and Mayol-García, 2022)
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Minimum wage laws are another example of how federal policy can address racial and ethnic inequities in income. Legal standards for minimum wages can be set at the local, state, and federal levels.
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Increases to the federal minimum wage raise incomes among low- and moderate-income families and lift families out of poverty. Since racially and ethnically minoritized populations and tribal communities are disproportionately represented in the groups that would be impacted by an increased federal minimum wage, such an increase is one method to address racial and ethnic inequities in economic stability and, therefore, health and well-being.
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The poverty rates in Figures 3-5 and 3-6 are based on the Census Bureau's Supplemental Poverty Measure, which accounts for income from a wide range of sources, including earnings and social benefits programs, such as Social Security, SNAP, the Earned Income Tax Credit (EITC) , and, especially important in 2021, Economic Impact Payments distributed as part of COVID-19 relief packages.
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, Black alone, and American Indian and Alaska Native alone. Poverty measured by Supplemental Poverty Measure.
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1 Refundable tax credits include the Earned Income Tax Credit, Child Tax Credit, and the Child and Dependent Care Credit. 2 Includes the third stimulus payment.
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. It also improves their biological markers 7 In this study the "social safety net" captured the impact of Supplemental Nutrition As sistance Program, Social Security, housing assistance, unemployment insurance, Supplemental Security Income, Temporary Assistance to Needy Families and Aid to Families with Dependent Children, the National School Lunch Program, WIC, and Low-Income Home Energy Assistance Program subsidies.
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Although antipoverty programs are neutral in terms of racial and ethnic health equity, they do
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In addition, community organizations can play an important role in helping people sign up for and remain enrolled. Monitoring Participation Rates can Facilitate Equitable Access to Federal Programs Participation rates vary widely overall and across groups in social benefits programs.
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Improving Administrative Capacity is Another Promising Approach to Facilitate Equitable Participation in Federal Programs Administrative churn in programs such as SNAP occurs when otherwise eligible participants fail to recertify, are removed, and reapply as a new case within a short period, such as a few months or a year. Churn drives up administrative costs, because new cases are more expensive to process than recertifications.
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Racial and ethnic inequities in wealth will be discussed in the next section of this chapter. Conclusion 3-3: Federal social benefit programs, such as the Supple mental Nutrition Assistance Program, Special Supplemental Nutrition Program for Women, Infants, and Children, and the Earned Income Tax Credit, significantly alleviate poverty and reduce the negative health consequences of poverty; however, there are barriers that prevent participation among many people who would otherwise qualify for these programs.
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Conclusion 3-4: Federal social benefit programs, such as the Supple mental Nutrition Assistance Program, Special Supplemental Nutrition Program for Women, Infants, and Children, and the Earned Income Tax Credit, significantly alleviate poverty and reduce the negative health consequences of poverty. In some cases, eligibility for these and similar programs has been restricted for some groups, including child less adults, formerly incarcerated individuals, and immigrants.
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found that "following the rules that governed FHA practice nationwide, the Detroit area office focused almost exclusively on promoting the construction, purchase, and repair of privately owned homes by certain White people. There is no evidence that Black people qualified for FHA-insured loans before World War II" (pp.
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Today, Black households score consistently lower than White households in nearly every national metric of wealth -- asset ownership, intergenerational wealth transfers, and home value (Addo and Darity, 2022; Bhutta et al., 2020; Thompson and Suarez, 2019)
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A 2018 report from the Robert Wood Johnson Foundation argues that wealth affects health in three ways: 1. Wealth and income can lead to better health by providing material benefits, including healthier living conditions and access to health care.
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Black families' lack of assets, including emergency funds, bank accounts, and homeownership, made them less able to cope with unanticipated expenses, such as medical emergencies, job loss, and transportation issues. They were more likely to fall behind on their mortgage payments than White families and less likely to be able to retire or plan for retirement.
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. These data suggest that baby bonds, Child Development Accounts, and similar policies designed to increase asset accumulation can both improve wealth overall and address racial and ethnic inequities.
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. This topic is discussed in detail in Chapter 4, which addresses education as an SDOH and its role in racial and ethnic health equity.
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Furthermore, poli cies that reward existing wealth, like the mortgage tax deduction, can exacerbate these gaps. Since wealth operates in tandem with income to enable access to healthier living conditions, quality health care, and amelioration of stress, these racial and ethnic inequities in wealth pro duce racial and ethnic inequities in health and well-being.
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. Even controlling for income and education, high-cost credit products and financial services are more likely to be located in areas with higher shares of racially and ethnically minoritized populations (Wherry and Chakrabarti, 2022)
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made during the pandemic were significantly delayed to those who did not file taxes and who were outside of the formal banking system, which were disproportionately racially and ethnically minoritized populations. One in ten people ended up receiving a paper check from the first federal relief bill, even though 95 percent of U.S.
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. As an alternative to the creation of Fed or USPS accounts, commercial banks and credit unions could do a better job of reaching those who do not have bank accounts.
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. Thus, policies that reduce the cost of having an account, such as providing low-cost bank accounts through governmentally backed entities, requiring banks and credit unions to offer Bank On accounts, or holding banks accountable to the CRA, would have important implications for racial and ethnic inequities in economic stability and, consequently, health and well-being.
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. This broader use of credit scores, and higher insurance premiums and interest rates on credit cards, auto loans, and mortgages for those with lower scores, amplify challenges for those already disadvantaged by the current system (Consumer Financial Protection Bureau, 2022)
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. There are many impediments to using cash flow or any alternative to credit scoring, including the reliance on credit scores for a variety of regulatory and market functions.
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Enabling the provision of financial services that allow all Americans to spend, save, borrow, and plan will enable greater economic stability and increase health equity for low-income and racially and ethnically minoritized populations. CONCLUDING OBSERVATIONS This chapter outlined numerous examples of how federal policy contributes to inequities in economic stability for racially and ethnically minoritized populations and tribal communities.
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Receipt of WIC and SNAP benefits should not be tied to parent employment for families with young children or for pregnant women, as work requirements are likely to reduce participation rates. Recommendation 6-6: Federal, state, tribal, and territorial policy makers should address the critical gaps between family resources and family needs through a combination of benefits that have the best evidence of advancing health equity, such as increased Supplemental Nutrition Assistance Program benefits, increased housing assistance, and a basic income allowance for young children.
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2013. The effects of Earned Income Tax Credit payment expansion on maternal smoking.
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2008. Do cash transfer programs improve infant health: Evidence from the 1993 expansion of the Earned Income Tax Credit.
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2023a. Policy Basics: The Earned Income Tax Credit.
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2012. The impact of family income on child achievement: Evidence from the Earned Income Tax Credit.
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. https:// fred.stlouisfed.org/categories/12 (accessed March 3, 2023)
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2015. Income, the Earned Income Tax Credit, and infant health.
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The Earned Income Tax Credit and the distribution of income. Cambridge, MA: National Bureau of Economic Research.
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2019b. Vibrant and healthy kids: Aligning science, practice, and policy to advance health equity.
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https://www.nicoa.org/native-households-have-highest-unbanked percentage/ (accessed March 17, 2023)
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House of Representatives Committee on Financial Services. https://www.demos.org/testimony-and-public-comment/biased-broken-system-examining proposals-overhaul-credit-reporting#footnote3_xe5tcuc (accessed March 9, 2023)
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https://research.stlouisfed.org/ publications/page1-econ/2017/01/03/education-income-and-wealth (accessed March 21, 2023)
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