Income inequality in Canada making headlines

The Globe and Mail has created the Wealth Paradox series to educate Canadians about the enormous impact of income inequality in our nation today.  The piece is extremely readable and filled with edifying examples of how inequality is negatively affecting Canadians’ access to education, health care, and even recreation.  Further, it looks at solutions.  While the simplicity and directness of the series may be criticized by some who expect more nuance in such discussions, I believe that its strength lies in its accessibility (to those who can afford to subscribe to the Globe and Mail, but that’s a conversation for another time).  This is something that we need to be talking about.



Week 13 Memo questions

## Week 13
1. What standard(s) of knowledge should be used to designate a development approach as a best practice? Discuss two to three standards.
2. Ohmer and Korr (2006) reviewed 269 total studies. 20 of these were quantitative studies and further only 9 with control/comparison group. What does this tell you about the nature of knowledge in community practice?
3. Assuming you are leading an agency and you have a budget to build capacity for research and evaluation among your social work staff. How would you proceed?

Week 12 Memos

## Week 12
1. Small et al make a strong case that careful study of culture can and should be a “permanent component of the poverty research agenda”. In other words, culture plays a role in explaining why people are poor. Can you recount a professional example where you observed how culture, as used by Small et al, played a role in explaining poverty?
2. Based on the first two sentences in question 1. Do you agree or disagree with Small et al that culture plays a role in explaining why people are poor? Use three points to support your position.
3. Mani et al present an altogether different reason for poverty, i.e., that economic instability reduces limited cognitive resources that leads to decisionmaking and behaviors that may reinforce poverty. Some have called this a “scarcity” argument. How do you make sense of these competing arguments – culture and scarcity? How will they inform your practice?
4. Richard Florida argues for an economic development policy based on diversity and creativity. Explain with 2-3 points why you agree or disagree with his argument. Comment specifically on how it will affect poverty.

Asset building policy did not cause the foreclosure crisis

In the course of the last couple weeks I’ve presented findings on asset poverty in Canada. The findings usually evoke a number of responses. One of the most troubling is that asset building policy caused the foreclosure housing crisis in the US. Most recently, on day 2 of the 2013 ABLE, Calgary Mayor Naheed Nenshi said (paraphrasing):

We need to be introspective and self-critical. We have interventions that don’t work. The home and foreclosure crisis showed us the limitations of home ownership and asset building for low income families.

The mayor is absolutely correct about the need to be self-critical. Only through understanding our failures can we develop more effective interventions to reduce financial exclusion and vulnerability. A major problem is that our failures are rarely documented and published. Understanding what goes wrong is probably more important than understanding our successes. (see the excellent Admitting Failure site). Few would disagree with this part of his speech. However, we also need to get the facts correct about the extent to which asset building policies influenced the foreclosure and housing crisis in the US. Consider the following points.

1. To date asset building policies have not reached massive scale in the US.  There is no single asset building policy that could cause the scale of the foreclosure crisis (12.5 million foreclosure starts from 2007 to 2012) .
2. Little innovation in mortgage markets was observed in the 2000s and government policy toward the mortgage market did not change much in the 1990s and 2000s. The major mortgage innovations happened in the 1990s and the major government asset building policies of Federal Housing Administration and GI Bill expansions occured in the post-war era 1940’s and 50’s. (See Atlanta Federal Reserve Working Paper)
3. Research has shown that Individual Development Account (IDA) homebuyers were much less likely to experience foreclosure (1/2 to 1/3 lower) than a comparison group of low-income homeowners constructed from government data gathered via the Home Mortgage Disclosure Act. Over a period of 1999 – 2007 3.1% of IDA homes in the sample entered foreclosure compared to 6 – 9% for the comparison group.  Importantly, only .2% of IDA homeowners secured subprime loans compared to 10% in the comparison group. Additionally, IDA homeowners were much less likely to have high interest rates.
4. Evidence from an experimental design longitudinal IDA study[gated] (1999 to 2009) showed that home ownership rates for the treatment and control group both increased through the Recession. If asset building policy has provided incentives for otherwise unqualified people to buy homes then we would have seen different ownership trends in the treatment group and not the control group. This did not happen.
5. From the same study the IDA program had no statistically significant effect on likelihood that a homeowner was late on a mortgage payment or went into foreclosure.

Overall, it’s dangerous and counter-factual to blame asset building policy for the home foreclosure crisis. The evidence suggests far more expansive and complex social and economic forces were at play.

Week 11 Memos

## Week 11
1. Pg. 324 of the Sen reading in DeFellipis states: “In so far as freedom is seen to be intrinsically important, the observation of the chosen functioning bundle cannot be in itself an adequate guide for the evaluative exercise, even though the freedom to choose a better bundle rather than a worse one can be seen to be, in some accounting, an advantage even from the perspective of freedom.” Explain in your weekly memo what this passage means to you as a social worker who is interested in reducing poverty.
2. Chaskin defines community capacity as the “interaction of human capital, organizational resourcs, and social capital existing within a given community that be leveraged to so solve collective problems and improve or maintain the well-being of a given community. It may operate through informal social processes and/or organized effort.” P. 295 Do you feel this is a useful definition? Why or why not?

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