What Makes a “Good” Emergency? Narrative and Policy in IDAs

“. . . I can advocate for all of the policies in the world—I continue to advocate for those policies . . .—but it really really occurred to me that there is a generation that is being formed right now that’s deciding what they will allow to be possible, what they will be capable of imagining, and the root of that is . . . the stories we tell.”1

—Ta-Nehisi Coates, on why stories matter, and why he writes comic books and superhero movies as well as journalism

As the Oregon IDA Initiative works to center equity throughout our program, we navigate the complex ways that narrative and policy twine together to shape how the IDA resource actually impacts people’s lives. I want to share a story about a substantive policy change we achieved last year, and how shifting narratives have both supported and impeded that outcome.

Individual development accounts, or IDAs, were conceived 30 years ago out of a shift in thinking around poverty. In the late eighties and nineties, it was becoming clear that the persistence of poverty was not just an income problem. People in the field were beginning to acknowledge that financial stability also requires wealth—defined as the difference between a family’s gross assets and their debts. Assets are resources providing enduring economic value and benefit. Things like cash, tangible belongings like a house, and intangibles like education. Wealth is necessary to allow individuals, families, and communities to weather inevitable macro and micro-economic challenges.

IDAs were positioned as a boost to make it more possible for people living with low incomes to save or invest to build wealth.

But dominant narratives about poverty (remember the “Welfare Queen”?) were also active in the way that IDAs were written into law and policy. The example I want to talk about here is how Oregon IDA statute placed restrictions on whether and for what reasons participants could withdraw the personal savings portion of their IDA.

With an IDA a participant is contributing their own income into a savings account, with a goal to purchase an asset. When they are ready to purchase, their savings portion is matched with state funds. This can take anywhere from six months to over three years. Until 2021, Oregon Revised Statute specified that, before reaching their asset goals, IDA participants could withdraw their own funds, but only for emergencies. It then limited what qualified as an emergency:

As used in this paragraph, “emergency” includes making payments for necessary medical expenses, to avoid eviction of the account holder from the account holder’s residence and for necessary living expenses following a loss of employment. [ORS 2017: 458.685 (2)(a)]

As you read that snippet of statute, you might have nodded in agreement. I imagine I did, the first time I read it, possibly even understanding it as generous: “Yes, that makes sense. These are important and challenging life events, and that’s good that people can use their savings for those things.”

What I probably didn’t think about is that the many emergencies that have occurred in my own personal financial life have not actually ever fallen into any of those categories. They fell into the many other routine economic hardships—or even just surprises—that litter most people’s paths through life: a car repair, an unexpected rent increase that shifts a budget, a higher tax bill than anticipated, a need for the right clothes for a new job, or a fine or fee. But all of these needs were excluded from what was deemed an emergency for IDA participants by including a story about what a good emergency is.

What if participants did need their savings for a situation that they experienced as an emergency, but was not listed in statute? Either they had to find other resources, possibly borrowing at predatory rates, or use their IDA savings and be exited from the program. Being “exited” means that a participant’s IDA is closed prior to reaching their asset goal, they receive no state matching funds, and their personal savings are returned to them.

Exited even if they had the capacity to start saving again after the immediate need had been addressed. Exited even though the program was supposed to be teaching the value of saving to weather just these sorts of emergencies.

The way statute was written is a result of harmful narratives about people who have low incomes. Narratives that suggest that poor people are not trustworthy—and thus need more trustworthy (that is, wealthier) people to guide their decision making. Narratives that suggest that certain emergencies are unavoidable—like sickness—and deserving of help, but certain others, like a car repair, or a payday loan coming due, are a result of irresponsible behavior and not an acceptable way for participants to spend their own money.

This bit of IDA statute is also an example of how harmful policy is sometimes not even protecting anyone or anything—it is just punishing the banned behavior to reinforce the narrative. So having the “wrong” emergency was punishable by exiting the saver, but even the “right” emergency would be similarly punished if the participant couldn’t repay themselves within 12 months, reinforcing a story about what is deemed hardworking and responsible.

Why did we (the “we” who make up the citizens the law is supposed to represent and whose resources are being leveraged or protected) need to define what an emergency is for our neighbors experiencing low incomes in this way? Because narratives have power, and narratives about poverty are a cornerstone of our economic and racial hierarchies.

Like many harmful poverty narratives, this is a racialized narrative, attaching negative stereotypes to economic barriers and penalties that disproportionately impact communities of color, especially Black people. Examples include extractive policies like predatory lending, like fines and fees associated with over-policing communities of color, like low to no savings due to historical practices of lower pay and wealth stripping. When policies distributing state funds are linked to these harmful narratives, the impact is that they will more likely direct resources and benefits toward white people who are less impacted by these barriers and penalties.

Over the last five years or so, a conversation has been brewing around the idea of saving for emergencies. Coming out of the 2008-2009 housing crash and Great Recession, and with the resulting widespread eradication of hard-won gains in African American and Latinx homeownership and household wealth, researchers found that a large percentage of households did not have much if any liquid savings. Without liquid savings, families did not have access to even a relatively modest amount like $400.00 to get a car into the shop without impacting their ability to pay for all the set costs of life like rent, car payments, student loan debt, groceries, utilities, or gas. Through this research there was a shift in narrative as the problem of liquid savings—what has come to be seen as “emergency savings”—has been normalized as a systems issue and not an issue of personal failure.

As is often the case, it was only when this crisis impacted white families and communities, that we saw a shift in narrative.

As this research and conversation have bubbled through the IDA Initiative, we have been looking at the emergency withdrawal aspect of statute and asking how it impacts IDA participants and their ability to successfully reach their asset goal. We could see in the exit data we collect from IDA participants that it was a common and very frustrating reason people were unable to successfully reach their asset goal. How might we end the punitive practice of exiting people for routine emergencies? Opening this question started to broaden our thinking to consider whether IDAs could be used positively to bridge that emergency savings gap. What if people could use their own savings and get it matched, making it possible to address their financial emergency and still continue to be on the path to their original savings goal?

To be transparent—the impact of poverty narratives made us hesitant to try.

Then came COVID. And one powerful impact of the pandemic was to make clear that everyone could be hit by misfortune, loss of income, sickness, and even premature death. With the national and state level emergency responses acknowledging and responding to the catastrophic economic impact of COVID shutdowns, including moratoriums on eviction and foreclosure, and federal cash stimulus payments through the CARES act, we saw a simultaneous and dramatic shift in both policy and narrative. Knowing that income loss was hitting BIPOC communities particularly hard, even as household savings/wealth was already dramatically lower for families in Black and Latinx communities, we decided the time was right to take the policies we had been considering to the legislature.

In 2020, we successfully advocated in a special session to add emergency savings as a match asset goal to IDA statute.

The statute language enacted a shift not just by allowing participants to receive match for establishing emergency savings, but also by broadly defining emergency expenses to allow the savers themselves to identify what an emergency is in their own economic lives. It inscribed a shift away from a historic pattern of distrust of low-income individuals and communities. It also provided an opportunity in 2021 to change the language cited earlier that prohibited a saver from accessing their own savings.

Culture interacts with policy in complex ways. Narrative and culture shift are paramount in building public and political will to move progressive economic policies. American racialized cultural narratives about poverty are stubborn, but they have shifted. The “welfare queen” that former President Ronald Reagan told stories about and used to justify a massive defunding of social safety nets is no longer the only or all-powerful narrative about race and poverty. The gradual—and recently more rapid—entry of BIPOC people into positions of power in education, entertainment, business, and government have brought many more stories into play, which have further helped shift narratives. At NP, that has meant that old stories woven into our statute do not slide by unnoticed with the same ease.

If we circle back to the origins of the Oregon IDA Initiative, the stated goal was and remains supporting savers to build assets and the financial stability that comes with a share of our country’s wealth. I have tried to provide a local example of what happens when we allow ourselves to depend on our inherited beliefs and narratives—we risk making or supporting policies that maintain a deeply inequitable status quo. To make good on IDA’s foundational commitment will require a deepening use of a racial-equity informed lens, and on human centered design practices that center people’s lived experience. When we bring in the stories and experiences of people most impacted by low access to income and wealth, especially BIPOC communities, we are building toward the kinds of narrative and policy changes that will allow all people the access and the resources to decide how to spend their own money, and to successfully save for and reach their own financial and personal goals.

[1] The Ezra Klein Show, 7/30/21 “Nikole Hannah-Jones and Ta-Nehisi Coates on the Fight Over U.S. History

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