Locked Up and Locked Out: Applying an Assets Lens to Reentry

This Friday, the Asset Building Program will be hosting an event about the impacts of incarceration on financial security and inclusion, highlighting a new piece by our fellow Monica Potts about a reentry program at the Center for Urban Families in Baltimore. As Monica’s article details, for ex-offenders, the institutional barriers to basic financial stability—let alone savings—are vast. For a group facing so many obstacles, is asset building even relevant?

The short answer is, yes, or at least it should be. We live in an era of mass incarceration; since 1991, when Assets and the Poor was first published, the U.S. prison population has more than doubled (and more than quadrupled since 1980), with profound consequences for low-income families and communities. Every year, over 650,000 people are released from prison—a population that is 90% male, more than half black or Latino, and on average only 34 years old. These young ex-offenders face unique barriers to economic stability and are at high risk of financial marginalization.

While there are no easy solutions, applying the assets lens to some of these challenges is important for ensuring that asset building remains a truly inclusive approach to tackling poverty. In advance of the event, I wanted to take a moment to reflect on some of the ways that reentry issues intersect with asset building principles and objectives, and explore what it would take to create a second chance at economic citizenship for the formerly incarcerated.

The household balance sheet

Within the past few years, researchers and scholars in the asset building field have shifted away from talking just about savings to focusing on the entire household balance sheet. Especially in the wake of the Great Recession, we can’t afford to ignore the high levels of debt that keep lower-income families vulnerable—even if they’ve also accumulated a small nest egg.

People who have been incarcerated often return to their communities firmly in the red. States generally provide only a pittance to help ex-offenders get back on their feet, while in recent years state and local criminal justice systems have been filling budgetary gaps through onerous fees and surcharges imposed on their incarcerated population.  At the same time, many incarcerated fathers accumulate significant child support arrearages while serving their sentence; upon release, federal law provides that up to 65% of their wages can be garnished to pay down this debt. Collectively, these fees can substantially exceed ex-offenders’ available income—ensnaring them in a cycle of debt or even sending them right back to prison if their inability to pay constitutes a parole violation.

Access to employment (and its benefits)

Employment is fundamental to economic security, and also provides access to a range of asset-building mechanisms that are contingent on wages: most notably, the EITC and employer-sponsored retirement plans. The current stats on long-term unemployment reveal just how difficult it is to find a job in the post-Recession economy—but for those leaving prison, the odds are even worse, and a criminal record further exacerbates existing racial disparities in hiring practices. People who have been convicted of certain felonies are statutorily banned from holding certain positions, while many employers in other sectors discriminate against job applicants with criminal histories (the “ban the box” campaign aims to reduce these barriers). Without jobs and a steady source of income, ex-offenders have little chance of obtaining financial stability—much less taking advantage of the savings opportunities tied to participation in the workforce.

Access to the safety net

Compounding this problem, individuals leaving prison often have limited access to key safety net supports such as SNAP, TANF and public housing. Up to 27% of ex-offenders expect to be homeless upon release, while federal housing programs are required to deny applications from people with certain criminal histories—and have the discretion to deny many others. This can have particularly harmful impacts for family reunification and enabling formerly incarcerated men to spend time with their children. Meanwhile, in some states, a felony drug conviction can eliminate access to SNAP—for life.

Access to higher education

Higher education has long been constructed as a key pathway to economic mobility, and thus a way to disrupt intergenerational poverty. Yet even for individuals who have managed to become financially stable and start envisioning an alternative future after leaving prison, a college education might be out of reach. Prospective students with a criminal history, particularly those with drug convictions, face restrictions in accessing federal student loans. 

The racial wealth gap

People of color are vastly over represented in the criminal justice system, in part due to heightened surveillance of communities of color, the war on drugs, and the disparate impact of mandatory minimums and other sentencing laws. As a result, the individual-level financial consequences of incarceration detailed above exacerbate racial wealth inequality in the aggregate.

This list, unfortunately, is really just the tip of the iceberg. At the event, our panel of experts will delve into these issues and explore potential strategies to address the layers of economic exclusion facing people returning home from time in prison. Further, because lack of access to financial systems and economic opportunity intersects with limitations on political power and social inclusion, we’re co-sponsoring Friday’s event with New America’s Political Reform program. Please join us in person or online for a discussion of both the challenges and opportunities, and share your thoughts before and during the event using the hashtag #2ndchancesociety. You can also ask questions in advance by leaving a comment below.