New Web site aims to help Americans fight poverty
With the United States facing a nervous economy, Washington University Professor Mark Rank has decided to create a Web site that he hopes will help Americans better judge their economic situations.
Among the country’s economic concerns is this year’s high rate of home foreclosures. According to the Center for Responsible Lending, two million homes have been foreclosed and 20 percent of subprime loans issued between 2005 and 2006 are also expected to default.
The New York Times reported that recent polling has found that the economy is the most pressing concern for Americans.
“With rising numbers of home foreclosures, job cuts, and loss of savings, more Americans are encountering severe periods of economic risk and insecurity in their lives,” Rank, the Herbert S. Hadley Professor of Social Welfare in the Brown School of Social Work, said in a press release.
Rank specializes in poverty and financial risk. Much of his work concerns what factors increase individuals’ likelihood of facing financial trouble and poverty in the future.
One area that Rank and Cornell University Professor of Development Sociology Tom Hirschl, who helped develop the site, have been researching is whether Americans have enough saved to get them through times of economic strain. Preliminary results indicate that if faced with a sudden job loss, as many as half of all Americans will not have enough liquid assets to keep them from falling into poverty for three months.
“This program will not only allow individuals the capability to see into their economic future, but it will also allow them to understand the extent to which they might lower their risk by engaging in certain behaviors, such as acquiring more education,” Rank said in the release.
Rank and Hirschl are using current medical programs as a template for their economic analysis program. The program and Web site will allow Americans to estimate their degree of potential economic risk in the same way that medical programs can calculate the likelihood of developing a medical problem such as diabetes.
The Web site will also aim to help parents and students, for whom the current credit crunch will make college loans harder to attain. Some lenders are exiting the federal loan program, on which many American families rely to subsidize the rising costs of higher education.
A recent New York Times/CBS News poll surveying parents of future college students reported that 70 percent said they were “very concerned” about how to pay for college.
The Web site also aims to be helpful to upperclassmen, for whom the economic crisis is most likely to be felt upon graduation.
When faced with large financial decisions, such as buying a home, Rank’s research says that American homeowners take on a great deal of financial risk. While he says many Americans will be able to purchase homes, nearly 40 percent will no longer be homeowners 10 years later.
Steve Fazzari, professor of economics at the University, says that the Web site will help people stay informed about external economic factors that affect their lives.
“This helps people become more aware,” Fazzari said. “Even in a country like the U.S., people face a risk of poverty, and [Rank's] research really drives that home.”
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