Bryant served in both George W. Bush’s administration, as Chairman of the Subcommittee on the Underserved and Community Empowerment, and on President Barack Obama’s Advisory Council on Financial Capability for Young Americans.
He also the author of a new book, How the Poor Can Save Capitalism: Rebuilding the Path to the Middle Class (Berrett-Koehler, 2014).
I caught up with John Hope Bryant and asked him to talk about income disparity in our country.
“Income inequality” has become something of a tired catchphrase in the media. What can you bring to this topic that’s new?
What many people in business, government, and media communities do not understand is who is poor in America. Recently, the Brookings Institute released a study that found that of the one in three American households (roughly 38 million) who live precariously paycheck-to-paycheck, two-thirds don’t fit the stereotypical profile of the poor. America’s poor can no longer be defined or stereotyped as inner city minorities living in the ghetto and those in poor rural areas suffering from long-term unemployment.
Poor America now includes people who are married, educated, and have professional careers with above-average incomes. Their assets average around $50,000, but because their holdings are tied up in illiquid assets – homes, cars, and retirement accounts – they can easily stumble into poverty when times get tough, when one wage earner loses a job or gets sick, or when divorce strikes. They are now what I refer to as part of the “teetering class” – those who struggle and straddle around the line of poverty.
If so many of our “teetering class” have jobs, what’s keeping them from thriving?
Financial stress, and the feeling that the system is rigged against them. The real definition of poverty is a lack of self-esteem and loss of hope. When 70% of Americans live paycheck to paycheck, survival is what they concentrate on.
How would you propose to restore hope and confidence to these people who have all but given up on the American Dream?
First, we must look at the culture of poverty. Poverty is not just a financial issue, but a behavioral issue as well. My book and Operation HOPE are redefining poverty by looking at the internal issues driving poverty, including environment, self-esteem, and aspiration.
Second, we can bring hope to the struggling middle class and poor communities. Through Operation HOPE’s Project 5117 we focus on the community from the ground up. Education is the key. We educate the youth through two essential programs: HOPE Business In A Box Academies and Banking On Our Future. HOPE Business In A Box Academies teach entrepreneurship and money management skills to students in grades 4-12. Banking On Our Future teaches students the importance of managing money through wants vs. needs, importance of a bank account, and what lifelong skills lead to financial success.
Makes sense to start with kids, since they’re our future earners, entrepreneurs, and taxpayers. What are some other parts of your vision?
Project 5117 includes many adult programs also. Our HOPE Inside branches offer courses and programs on homeownership, credit management, and entrepreneurship. These are vital in low-wealth communities filled with alternative banking options, such as pawnshops and check-cashing businesses. We educate and advocate for these communities to utilize neighborhood banks and credit unions that offer low-interest loans, provide checking and savings accounts, and have credit counseling services so people can raise their credit score, get out of debt, and develop the means to become homeowners.
It’s refreshing to hear a positive voice with a focus on practical solutions instead of just problems. Is there more you’d like to add?
My nonprofit organization, Operation HOPE, has programs in schools nationwide to promote youth entrepreneurship, a partnership with Gallup Inc. to measure annual financial literacy rates among our youth, credit counseling and lending programs for adults, and many other change initiatives that target income disparity in our country. I urge people to get involved in closing the income inequality gap, instead of just talking about it.[amazon template=iframe image&asin=1626560323]