The Opportunity Divide

Can you give two definitions of “CD”? If you answer “certificate of deposit,” in addition to “compact disc,” what does that say about your financial literacy?

What if you knew nothing about banking? What if opening a simple savings account never crossed your mind””because much of your income comes from the government with strings attached?

For one example, if you don’t spend your entire food stamp benefit each month, you lose what is left over and your future monthly benefit may be reduced. So you spend everything each month. You don’t really try to economize when you shop, because you don’t get to keep what you would save.

And your budget is so tight that you have nothing to put in a savings account, let alone to open a six-month CD.

Thousands of Oregonians receive defined-benefit entitlements designed to keep them and their families afloat. These cash transfers help with short-term consumer needs, but they alone won’t get people out of poverty. To truly move away from the edge, people not only need to have stable incomes but have to be able to build assets and plan for the long-term future.

The divide between “haves” and “have-nots” isn’t entirely an income difference; it’s a difference in how people can and do spend their money. Income alone does not reflect ownership of assets, nor does it tell us what is being consumed. It especially fails to tell us if the individual will be able to become self-sufficient in the future.

In addressing poverty, a better alternative to the term “income inequality” is “opportunity inequality.” Opportunity inequality refers to barriers that the poor face in economic and educational systems. Access to credit, quality education and asset building (savings instruments, a car, a home, etc.) result in low-income Oregonians being better off, immediately and intergenerationally.

Poverty is not as much about what or how much a person consumes as it is about limited opportunity and freedom. Addressing opportunity inequality, not just income inequality, can help let everyone in on the American Dream.


Bina Patel is Director of the Oregon Asset Policy Initiative at Cascade Policy Institute, Oregon’s free market think tank. She has a master’s degree in Social Protection Financing from the University of Maastricht in the Netherlands and over ten years of experience working on public policy and direct service in the areas of poverty alleviation and asset building, both nationally and overseas.

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Posted by at 05:40 | Posted in Measure 37 | 6 Comments |Email This Post Email This Post |Print This Post Print This Post
  • Jerry

    Again, you are right on the money, so to speak. Some of what you mention could be easily corrected by a required personal finance course in high school.

    But wait, that might be hard to do. Sorry, forget I mentioned it.

    Better that the kids take modern cinema studies and creative writing.

    Then they will feel good about themselves.

  • Britt Storkson

    How about rewarding individuals based on their skills and self-improvement instead of their political connection? A good example of this problem is trade union membership. One can become a lawyer or a nurse or a doctor by taking and passing the courses and tests. Anybody can be a docrtor, nurse or lawyer simply by doing the work.
    Not so with trade unions. To become a plumber or electrician one cannot simply take the courses and pass the tests. A political connection is required just to gain admission to the courses. Applicants are not admitted based on their skills or accomplishments but on who they know.
    Myself I can do anything a licensed electrician can do but most licensed electricians cannot do anything I can do as I make computer control systems. I make $11.00 per hour and the typical electrician makes $30.00 per hour or more. I would have no problem passing the tests to be a union electrician but am prevented from even taking those tests. And we wonder why we can’t compete in world markets.

  • Jeff

    I had personal finance course (Consumer Ec 1 &2) required in my high school (Sprague HS, Salem) in the 80s.

    Scared me of credit cards so hard it was around 5 years later before I got one… and that was simply so I could do mail-order computer gear from the US to where I was stationed in Germany.

    The lessons stuck rather well – CC’s get paid off every single month.

  • dian

    A personal financial course would be a tremendous asset to people entering the world of life, with or without mom and dad. So many people have no clue and not only do that neither do their parents, so if the course isn’t offered, they can’t learn. They are ripe for being tricked. Of course there is the other side also, but not now. That would be the number one course next to reading and math. Personally I could care less if they learn how to play golf, or play anything for that matter. That is not what is important, learning is. Finances make up most of our everyday lives.

  • sybella

    This has nothing to do with the topic, but does have a lot to do with the lack of education in our schools.

    This happened in our store the other day. Some of our employees were asking questions about how our economy got in the state it was in. My husband was answering their questions and attempting to educate them on the results of government policies. Good and bad.

    About that time a customer came in and started raving about how if he had known this was a republican store, he would never have came in. He went on to say it was the republicans that required a portion of our automobile fuel to be made with products that ruined the quality of the fuel, his car wasn’t running very well since that was put in. D__mn Republicans.

    My husband tried to show him that iit was Oregon’s governor that signed that into law. His response was ” of course it was he’s a republican”

    Bet this guy can’t read, bet this guy never had an economics course, bet this guy knows all there is to know about sports and movies and videos.

    Anyway, I thought it was both hilarious and sad.

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