St. Louis civic leaders will come together Tuesday for a public discussion about shrinking the wealth gap.
A 2019 Institute for Policy Studies report found that the median white family has 41 times more wealth than the median black family and 22 times more wealth than the median Latino family. In the St. Louis metro area, the median income for white residents is $66,614, compared to $36,712 for black residents, according to the U.S. Census Bureau.
The panelists will talk about how to redistribute wealth in the metro area and give lower-income people the power to accumulate assets, save and invest. Moderator Michael Sherraden has studied asset-building for about 30 years and said he thinks it’s the key to closing the gap.
Sherraden is the founding director of Washington University’s Center for Social Development, which is sponsoring the event. He said wealth and assets are divided unevenly among racial groups in the St. Louis area and around the country.
Author Robert Friedman will explain his strategy for closing the wealth gap at the discussion. He said by following his ideas, St. Louis could become “not a national case for the ills of the racial wealth divide, but the leader in closing that divide and opening opportunity for all.”
In his book, “A Few Thousand Dollars: Sparking Prosperity for Everyone,” Friedman proposes that financial stability requires more than just enough money to live. He says success comes from saving and investing.
“Allow everyone a few thousand dollars, not to spend, but to invest in businesses, in education, in homes — the kind of things that we know create wealth,” Friedman said. “Having some cash reserves allows you space to withstand the everyday accidents and illnesses, to imagine and build a future.”
Friedman and Sherraden agree that an effective way to secure a few thousand dollars is through children’s savings accounts, also known as “baby bonds.” The city of St. Louis Treasurer’s Office implemented a College Kids Children’s Savings Account program in 2015 that opens a savings account for each public or charter school student when enrolled in kindergarten.
Friedman said these accounts will help close the gap, but he thinks government officials and other organizations also need to reevaluate who they invest in.
“Everyone would win if we just started investing in everyone rather than only those who already have resources,” Friedman said.
Asset-building policies are often the result of public-private partnerships, Sherraden said. City Treasurer Tishaura O. Jones and other local leaders will give feedback on how Friedman’s suggestions could impact the St. Louis area. The discussion will begin at noon Tuesday in Wash U’s Hillman Hall.
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