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5:44 pm in Uncategorized by Michelle Chen

Representatives of the American Postal Workers Union, pictured here at a 2011 protest, have rallied in support of a postal banking system. (Mark Taylor / Flickr / Creative Commons)

Originally published at In These Times

Your friendly local post office may have an honorable history, but it’s facing tough times, including a fiscal crisis and, more generally, a struggle to keep pace with growing digital communication technologies. Conservatives have increasingly dismissed the United States Postal Service as a clunky relic of old-fashioned America, with right-wing lawmakers seeking to phase it out through service cuts and privatization. Now, some progressives are trying to save the USPS by rebranding it as a financial vehicle: a place for you to pick up your mail and deposit a paycheck in one stop.

Some officials have pitched the idea of the postal service expanding into “non-bank” financial services, carefully designed to complement rather than directly compete with Wall Street. In a recent white paper, the USPS Inspector General’s office suggested that local post offices could offer products such as international money transfers, small short-term loans, and prepaid debit cards for bills or everyday purchases. To fulfill needs unmet by big banks, these financial services would ideally be targeted toward “low-income areas like rural communities and inner cities.”

Ultimately, though, many advocates want to see the postal service be bolder and actually delve into full-scale banking services. Labor and consumer advocacy groups like AppleSeed say the USPS is excellently positioned as a government-supported, publicly accountable institution to fill a longstanding gap in the financial system by offering interest-bearing accounts and other basic banking services. In addition, branching into the affordable finance business would offer the USPS a steady revenue stream.

For free-marketers who fear the USPS would steal big banks’ customers, advocates point out that low-income groups that stand to gain the most from postal banking have already been marginalized as a bad business prospect. Some 68 million Americans are considered “underbanked”: In other words, they lack access to mainstream banks and essential services like savings accounts. “Banking desert” neighborhoods are typically full of people of color, immigrants and unemployed workers—and there may be no full-service bank in sight for them, because massive firms like Merrill Lynch do not see those areas as “profitable.” Read the rest of this entry →

New York City Immigrants Test a New Economic ‘Bridge’

8:04 am in Uncategorized by Michelle Chen

Lady Liberty welcomes immigrants to New York City, but in reality it’s hard for skilled workers to get their foot in the door. (Sgt. Randall. A. Clinton / Flickr )

Originally published at In These Times

For all the supposed potential of the “American Dream,” immigrants in New York City often have a terrible time redeeming its promise. Many arrive in the United States with no financial grounding or burdened by a heap of debt; others can spend years priced out of financial credit by poverty and discrimination. Now, however, the city is allocating a little seed capital toward the long-overlooked economic potential of poor immigrant communities.

The Immigrant Bridge program of the city’s Economic Development Corporation is a pilot initiative that aims to invest in the future careers of struggling, underemployed immigrant workers who came equipped with credentials earned in their home countries but have been unable to get their foot in the professional door of the city’s labor market. A core component of the program is a special loan fund for immigrants with a college background, ranging from $1,000 to $10,000, borrowed on five-year terms, which can be used to cover any expense, including the cost of necessary licensing exams, training classes, or basic life expenses like transportation costs. In addition to the loan fund, which will be administered by Amalgamated Bank, selected program participants would engage in career development programs to place them into jobs that suit their aptitudes.

Though Amalgamated obviously has a commercial interest in the program, the union-owned bank has built up street cred as a proletarian-friendly institution, with historical ties to the immigrant labor movement. “There’s a lot of unutilized human capital here in immigrant communities… and we want them to be reaching their full potential,” says Andrew Weltman, Amalgamated’s first Vice President for Strategic Development.

The 400 participants who will ultimately be selected to participate in Immigrant Bridge reflect just a sliver of a systemic gap in the city’s economic landscape, though. Many well-educated immigrants face structural obstacles when seeking to break into a professional field, even one in which they were successful before migrating. (Nationwide data on metropolitan areas hows that the majority of immigrants hold “middle skill” or “high skill” qualifications.)

According to the New York-based think tank Fiscal Policy Institute, immigrant New Yorkers hold considerable economic clout, making up “84 percent of small grocery store owners, 69 percent of restaurant owners, and 63 percent of clothing store owners.” But even if they are technically business owners, the work can be rough and the pay low, whether you’re running a daycare business in your home or driving a cab every night. Read the rest of this entry →