Financial Well-Being’s Critical Role in Building a Local Economy
The steps Louisville is taking to financially empower its public employees and its citizens point the way.
My city of Louisville has been fortunate to have had a dramatic economic transformation in the last five years: We've created more than 47,000 new jobs, unemployment has dropped from 10.3 percent to 4.8 percent, our $25 million budget deficit has become a $19 million surplus, and we've opened 1,900 new businesses.
You can see, feel and even count our momentum. But we also recognize that too many Louisvillians are left out of this recovery. And for Louisville to reach its full potential, we must be a city where the path to prosperity and opportunity is open to every one of our citizens.
The same is true across the nation. More than half of all Americans are considered "financially unhealthy." More than one in four say finances cause them significant stress. And more than one in three aren't prepared to handle a $2,000 emergency.
As an entrepreneur, business owner and now mayor, I believe we must make significant changes to ensure that a recovering economy is something realized by all citizens. Too many of our citizens -- including many with jobs -- are still struggling and feel ill prepared to compete with the skills that the rapidly changing global economy demands.
As leaders, it is our responsibility to create platforms for all citizens to reach their fullest potential, and that includes removing obstacles that impede financial well-being. It just makes good business sense to invest in programs that empower people to achieve long-term financial stability.
What It's Worth: Strengthening the Financial Future of Families, Communities and the Nation, a book published recently by the Corporation for Enterprise Development and the Federal Reserve Bank of San Francisco, describes how some innovative leaders are tackling these issues head-on. Comprised of essays from some of the nation's leading experts on economics, financial services, public policy and philanthropy, it calls on elected officials, businesses and others to recognize that the economy is only as strong as individual American households, that every sector can play a role in improving financial health, and why it's in their best interest to do so.
This is a critical mission, and it's why in Louisville we embed financial empowerment into everything we do.
We begin with the basics, such as requiring direct deposit of paychecks for all Louisville Metro Government employees, thereby creating an automatic link to financial services such as insured bank accounts and savings vehicles. We've trained employees in our career centers, community centers and other departments to promote financial capability and asset building, and we provide ongoing financial education. Scores of city employees have received training on such topics as money management, behavioral economics, credit and barriers to financial empowerment.
And, with a grant from Living Cities, we've also integrated financial empowerment into our homelessness prevention services. We helped create Bank On Louisville to give 19,000 community residents access to free or low-cost checking accounts and provide financial education on topics including budgeting, debt reduction, credit-building and financial goal setting. We've also partnered with nonprofits and others to develop meaningful financial empowerment strategies such as citywide "financial fitness" days and opportunities for city residents to meet with pro-bono financial planners.
There's more to all of this than simply trying to lift our neighbors up. We see our efforts as a critical part of our economic-development strategy. We believe a healthy, financially strong, educated workforce creates jobs and opportunity and that financial well-being for families and communities is a foundation for success for any city or any business. Our job as leaders is to create the products, policies and systems that keep the momentum of economic success growing.
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VOICES is curated by the Governing Institute, which seeks out practitioners and observers whose perspective and insight add to the public conversation about state and local government. For more information or to submit an article to be considered for publication, please contact editor John Martin.
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