The Value Gap is a MarketWatch interview series with business leaders, academics, policymakers and activists on reducing racial and social inequalities. Low-income people, despite often being seen as one of the groups that would benefit the most from financial-literacy programs, are typically aware of their money problems. Yet every April — once designated National Financial Literacy Month, and now called National Financial Capability Month — they’re met with well-meaning lessons and resources for improving their circumstances by paying down debts, building saving habits, creating a budget and boosting credit scores.
That’s all well and good, said Anna Gifty Opoku-Agyeman, a Harvard Kennedy School doctoral student studying public policy and economics and the editor of “The Black Agenda: Bold Solutions for a Broken System.” But what about the systemic issues that keep poor people poor, despite their best efforts to save money? In the past, financial-literacy and health programs have been criticized over a perception that they too narrowly focus on individuals’ choices, rather than circumstances that shaped those decisions, particularly when such programs are highlighted as a means of addressing the country’s racial wealth gap. The idea of pulling yourself up by your bootstraps — going from a little to a lot by virtue of smart choices and hard work — may not make as much sense for low-income people and people of color starting from a place of less wealth, fewer resources and more institutional roadblocks. “What happens when you don’t got boots? Or when you don’t got straps? Or when your feet are quite literally submerged under concrete?” said Opoku-Agyeman, an award-winning speaker, writer and researcher on economic justice and workplace equity and a co-founder of the Sadie Collective, a nonprofit focused on Black women in economics and related fields. “What happens then?” While financial-literacy programs often have demonstrably positive effects, such as improving participants’ knowledge and behavior with respect to budgeting and saving, scholars have noted they’re unlikely to make a dent in the racial wea …