TapInto.net's M.E. Cagnassola Reports
NEWARK, NJ — Addressing a room full of the city’s business professionals and executives from the nonprofit and for-profit sectors, Newark Mayor Ras Baraka held nothing back as he joined in remarks at the New Jersey Institute for Social Justice’s latest roundtable discussion on Newark’s racial wealth gap, Becoming a Model City.
“We all know we have a lot of data, and we’ve probably had this data forever. It’s not different, the people who are presenting that data are different,” he said. “It’s been steady for 50 years: We have been poor in this city since we got here. The question becomes, what do we do with this information?”
Joined by leadership from NJISJ, the nonprofit Prosperity Now, Newark Emergency Services for Families, the New Community Corporation, Newark Alliance and Prudential Financial, Baraka and the group gathered at Prudential Tower to discuss just how the data is being translated into action.
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According to the organizations’ combined research, despite the city’s lowered overall unemployment rate and drive toward economic development, homelessness has continued to rise steadily since 2014. Bringing in an average income of $31,872 and $33,975, respectively, more than 1/4 of black and Latino families struggle with poverty, twice that of white households in Newark.
Income inequality in Newark is compounded by a disparity in employment rates, with black Newarkers coming in at a whopping 15.8 percent unemployment compared to 7.9 percent for Latinos and 6.2 percent for whites. As the city’s downtown attracts new corporate headquarters and residential properties, local residents hold just 18 percent of jobs in the city, according to Prosperity Now’s latest report.
Ryan Haygood, CEO of NJISJ, added that New Jersey bears some of the worst racial disparities in the United States. White families in the state boast a median net worth of $309,000, a staggering contrast to the $7,020 median for Latino families and $5,900 median for black families.
The driver of these low numbers for black and Latino families on a city, state and national level is a drastic fall in home ownership, a primary driver of wealth, according to Haygood.
“Fifty years after President Johnson signed the Fair Housing Act, which was specifically intended to increase homeownership among our folks, you see [these numbers] play out in the city of Newark,” Haygood said.
To combat what Baraka sees as a past lack of political will to provide links to support, the city launched the Equitable Growth Advisory Commission in 2018, which aims to extend the benefits of Newark’s growing economy to all residents. NJISJ is proposing a state-wide Individual Development Account (IDA) to help Newark residents reach unmet financial goals.
Under the IDA program, a sponsoring organization would provide a 1-to-1 to 5-to-1 match for household contributions in a savings account created for a specific purchase, such as a home, vehicle, college tuition or a business. Built-in case management, financial literacy and other support services under the program would help sustain wealth-building assets.
“How do we expand income to build wealth? We want our policies to have traction so we have to get into the community and assess the needs,” said Jayne Johnson, senior counsel at NJISJ. “We want [residents] to create generational wealth, and that starts with home equity.”
Under such a program, the state allocates tax credits, which the taxpayer subtracts from the amount of the credit from taxes owed. Organizations administering the IDA may apply to receive a certain portion of the credits that they can then offer to potential donors.
The city's Newark 2020 iniative is also working to decrease the unemployment gap between Newark and New Jersey as a whole by connecting Newark’s unemployed residents with jobs. NJISJ, the initiative’s policy lead, has proposed 10 apprenticeship bills to the state legislature to increase economic opportunities for people of color, women, youth and people with disabilities.
So far, eight bills centered around apprenticeship, including tax credits for businesses employing apprentices and a program providing childcare and transportation to qualified apprentiences, have passed through the Senate.
Legislation to raise the state minimum wage to $15 by 2024 and a policy that provides down payment assistance and direct lending to first-time homebuyers, in addition to discrimination protection for Section 8 voucher-holders, will also support Prosperity Now and NJISJ’s work, according to the report.
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