About California Asset Building

What Is the "Asset Gap" in California?

The need for spurring widespread asset ownership in California is immense. Some 7.8 million California households, or 29 percent, would only last three months at the poverty level if they were forced to deplete all of their assets. That’s the fourth worst “asset poverty” rate in the nation, more than twice California’s “official” poverty rate of 12 percent — and possibly more consequential. When families don’t have enough assets, they may be one medical emergency or one layoff away from government dependence. Nor can they buy a home, send their kids to college, start a business, reduce or manage their debts, or make long-term investments.

The Potential for Asset Building

While the need to broaden asset ownership is great, the promise is even greater. Those with assets not only have brighter economic prospects, they’re better, happier and more productive citizens. Research finds that when families -- including very poor families -- own assets (as distinct from income), they are more likely to stay married, work harder, enjoy better physical and mental health, make educational plans for their children, feel more confident about and in control of their futures, take better care of their property, and be involved in community and political affairs.

How Can Asset-Building Policies Help All Californians?

Asset-building policies provide a rare political opportunity for bipartisan cooperation to address stubborn poverty issues with initiatives that emphasize personal responsibility. Asset building includes a range of simple proposals that can have broad, deep and immediate impact with little cost; and others that, with a modest investment, would radically transform the long-term economic outlook for California’s children from one of uncertainty and fear to sustained prosperity and growth.

Some of these policies have been tested in California. More than 5,000 people of modest income are already saving in matched savings accounts. In Silicon Valley, 1,300 savers -- with average median incomes of $24,000 -- have saved over $1.5 million. More than 500 people have used their savings to buy homes, go back to school and start college funds for their children.