It means that many people have to rely on fringe banking services, like check cashing outlets with high fees. But what is worse is the savings deficit it creates for many working-class, or minority, or young citizens, who have a much harder time acquiring and building assets. These families and individuals are missing out on a critical component of economic ability. After all, building a nest egg is difficult to do if you do not have a nest. In the past few years, in recognition of this savings deficit, the impetus of social policy has moved from that of entitlement to that of empowerment.
Saving is empowering.
It allows families to live without public aid, and provides them with a ladder into the middle class. It can actually change a family s economic station and set a better course for future generations. It may seem like a small thing, but it can have an enormous impact by encouraging federal benefit recipients to establish bank accounts, often their very first. It also encourages mainstream financial institutions to offer low-fee accounts to attract this customer pool. This changes the relationship between many low-income people and banks, ultimately to the benefit of both.