Guest columnist
Despite a rally in the stock market and an uptick in consumer spending, the news that wages and salaries fell in June -- the eighth straight monthly drop -- is yet another reminder of the weakness in our nation's economy. What's more, continued sluggishness in the local job market should be a warning that the local economy remains mired in the national slump and that an end to our economic woes is not yet in sight.
One silver lining to this dark cloud of economic news is a return to more old-fashioned financial values for businesses and households. Recently, President Obama spoke about moving from a "borrow and spend" economy to one of "save and invest."
Indeed, for the first time in recent memory, Americans are starting to save again. Yet a new report from the North Carolina Assets Alliance finds that those new savers need more support, if we are to see a real economic boost.
"A Prosperity Grid for North Carolina: Connecting Households and Communities to Economic Opportunity," says that building an infrastructure to facilitate savings for all North Carolinians will strengthen our recovery in the short term and make our state more competitive in the long term. In the end, real economic development and long-run economic success depend on every household's ability to do better than the generation before them.
In addition to household income, one important measure of financial stability and the ability to get ahead is a household's accumulated savings or net worth. Today, one in five N.C. households lives in asset poverty, meaning they have insufficient savings to remain above the federal poverty level for three months without earned income. Without the savings or assets to cushion families against the economic shocks of job loss, benefit loss, home foreclosures and rising cost of credit, many households, including those in the middle class, are at risk of falling behind.
The good news is that we know what works -- sound investments in the policies that facilitate savings and that build assets for all households. From the home mortgage interest deduction to the G.I. Bill, policies focused on building the assets of households and local economies have generated significant returns for North Carolina and our nation. Wealth-building policies were integral to the country's economic growth in the post-war period and they can and should be "front and center" once again in the debates about returning to broad-based economic prosperity.
Indeed, North Carolina cannot recover from the current economic downturn without a plan for building savings and assets. A second-generation of wealth-building programs is in order. This should include policies that can incentivize savings, connect households to affordable and sound financial services, and support households saving for higher education, business start-up or home purchase.
This is the moment when policymakers, business and households together can re-build the policies and systems needed to generate shared prosperity for all North Carolinians.
Carl Rist of Durham is the vice president for programs at CFED, formerly the Corporation for Enterprise Development.
