When two big foundations and two major corporations back a look into consumer finance by a top think tank, it’s a good idea to pay attention. Earlier this month, the Aspen Institute announced an "unparalleled" project to study financial security. Its new Expanding Prosperity Impact Collaborative (EPIC) is dedicated to issues that impact the financial lives of millions, but have so far escaped scrutiny.
EPIC is a project of the Aspen Institute’s Financial Security Program, which describes itself as working "with the country’s best minds to create a new generation of policies, products, and services that will enable more Americans to meet basic financial needs now in order to find stability for longer-term saving for the future." The aim of EPIC is to bring together cross-disciplinary thinkers and sectors working across silos to raise the profile of key consumer finance issues, and tee up new policy solutions for decision makers.
(If we earned a dollar for every initiative we report on that wants to bust silos, we could go into the funding business ourselves.)
So who's putting up the money for EPIC? That would be the Ford and Kellogg foundations, along with the JPMorgan Chase and MetLife foundations. These funders, of course, show up a lot in the asset building and financial inclusion space.
In 2016, EPIC is examining income volatility, a daily reality for many Americans and across many types of employment. With a rising gig economy and a decline in lifelong corporate employment, Americans need more financial savvy to avoid trouble. Some aren't prepared.
Of course, none of this is exactly breaking news. Jacob Hacker wrote about income volatility in his 2006 book, The Great Risk Shift, and think tanks like the Economic Policy Institute have also drilled into this area. But much digging remains to be done.
A March meeting of EPIC’s participants brought together experts from academia, government, and the private sector to discuss income volatility. A second meeting in June will examine what can be done to mitigate its effects. Leading EPIC is Ida Rademacher, executive director of Aspen’s Financial Security Program and former senior executive at the Corporation for Enterprise Development.
EPIC fits nicely into an expanding ecosystem of efforts to bolster assets and financial inclusion for low-income populations, and it's interesting to see how deeply the corporate funders behind the initiative, JPMorgan Chase and MetLife, have moved into this space.
The MetLife Foundation is engaged in a huge, worldwide financial inclusion effort that we report on often. We’ve also covered the ongoing effort by JPMorgan Chase to support financial security for vulnerable Americans—noting that as one of the institutions implicated in bad lending before the meltdown, the banking giant has a lot of amends to make. But never mind all that, right?
Last year, JPMorgan partnered with the Center for Financial Services Innovation (CFSI) on an initiative to find and support financial service businesses that can close gaps in service for "unbanked"sections of the population. JPMorgan is also collaborating with CFSI on its Financial Solutions Lab (to the tune of $30 million) to develop tools and resources to help Americans build assets and improve credit and savings. EPIC and CFSI share another funder in Ford, which gave $1 million to CFSI in 2014.
This is all important stuff. But we always feel compelled to note the obvious: Which is that as long as nearly half the U.S. workforce makes under $15 an hour, even as housing and healthcare costs rise, poorer Americans will face huge challenges in building assets, no matter what cool new "tools" they have.
Further, as much as we like the Aspen Institute, we wonder how far a think tank so heavily backed by corporate funders can go in challenging the deeper structural inequalities (both economic and political) that have condemned a large swath of working Americans to lives of hardship and insecurity. These are epic problems indeed.
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