2017 marked the end of a 27 year affiliation between Community Ventures and Santa Cruz Community Credit Union (SCCCU).
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By Brando Sencion, Program Coordinator of Santa Cruz Community Ventures
“This land is your land, this land is my land.” I sing these words in my head as I think about employee owned business models. Employee ownership is a model which workers own a majority of their company’s stock and are able to say, “I am an owner of this company.” Benefits of this business model include improved company performance and employee wellbeing. Furthermore, a culture of democracy is created among employees to participate in company decisions. Employee-owned companies help keep businesses locally owned and build community wealth. The economic impact for families participating in one of these companies is higher wages, asset building, and job security. Employee ownership is beneficial to all, but can particularly have positive effect on women financially. The Los Angeles Times reported, Latina women make 43 cents to the dollar compared to white men. Their ability to earn higher living wages as employee owners is higher due to increased company performance and fair distribution of wages. Higher pay means families have the ability to save, invest, and obtain financial security. Apart from individual benefits, employee owned businesses are beneficial because they allow communities to build their own local economies within larger economies. According to Project Equity, small businesses provide 48% of jobs nationally and locally circulate three times more money back into the local economy compared to large firms and chain businesses. Keeping money locally is needed in communities because it allows small businesses to flourish, which in return creates jobs and personalized services. As an employee this is the coolest idea you’ve heard in a long time. However, as an owner it may be difficult to like this business model. In my opinion, running an employee-owned company as an owner is difficult because you must give up a portion of your profits to share the wealth with employees. Maybe it is not the right route for you now, but for small business owners ready to retire, this may be a solution. Due to large amounts of baby boomer business owners ready to retire within the next few years, many local businesses can potentially close. This is because over 85% of business owners do not have a succession plan in place for their business. The reason may vary on why they do not have a succession plan but, converting towards employee-ownership can be the solution. This would allow the employees to become owners of the business and continue to serve the community, while at the same time keep their jobs and become owners. By: Maria Cadenas, Executive Director of Santa Cruz Community Ventures
It’s about people. At Santa Cruz Community Ventures (SCCV) we want more local businesses, families able to afford to live here, and an equitable financial system. We want all of these because they are signs of a thriving community – where all people can live. But we don’t have that quite yet. The wealth gaps are daunting and making it unaffordable for most families to live here. Parts of our county are facing up to 50% of households not using banking services. And the fast pace of change due to regional pressures like water and Silicon Valley are shocking. Not to mention the displacement and gentrification of our low-income communities. Which is why our work, our willingness to innovate and try, is so critical. We know that as a world we don’t yet have the answers. But we have the urgency, the imagination, and the courage to try. We are unwilling to sit by the sidelines. Over the past two years SCCV has reinvented itself to focus on building an inclusive economy. Our work has taken a thoughtful approach to innovation, community organizing, and economic development. From developing a toolkit to help immigrant families in danger of deportation protect their wealth to Youth Financial Capability models targeting middles school girls and youth entering the workforce. We are doing this because our dreams of a thriving local inclusive economy are worth it. We are doing it because each one of us is worth it. And yes, it may seem a bit unorthodox to work with health providers to get them to use financial coaching as a health treatment or to view college saving accounts at time of birth as an economic strategy or to offer our fiscal sponsorship for a rapid response to facilitate supporting DACA recipients. But we are in an unorthodox time when eight men have as much wealth as 50% of the world’s population. We may be dreamers, but we are also thoughtful and intentional doers. I hope you will join us in building the Santa Cruz County of tomorrow. Dare to dream with us and help bring our vision of sustainable and inclusive economy for all to life. By: Brando Sencion, Program Coordinator of Santa Cruz Community Ventures
For years consumers have been “set up to fail” by short term lenders with services such as payday loans. Consumer Financial Protection Bureau (CFPB) has been calling for payday lenders to ensure that the borrowers have the ability to repay their loans, according to its terms and limit how much, customers can borrow. Until today, payday lending was regulated by individual states policies. Some states had strict policy and others had no policies at all to protect families from these services. Thousands of store front payday loan services across the country, lend millions of dollars each year to families attempting to make ends meet. The inability of these families to repay the loans, more than often place them in a cycle of debt. Under the new rules issued by the CFPB, payday loans will have to follow a complex set of guidelines to ensure the customer have the ability to repay what they borrowed. The lender is required to verify the borrower’s income and check other financial obligations such as rent, child support, student loans, etc. The short-term loans must be structured to allow the customer to gradually get out of debt. However, a short-term loan under $500, is not required to meet the affordability test. Additionally, the payday loan affordability test does not apply to lenders issuing less than 2,500 loans a year. The newly issued policy is a great leap in the right direction, but there is more to be done. Other recommended policies for payday loans that need to be addressed are placing interest rate caps, limiting loan fees, limiting balloon payments and interest payments schedules. By Maria Cadenas, Executive Director of Santa Cruz Community Ventures Last week I had the privilege of being in our nation's capitol as part of the HOPE Leadership Institute (HLI). It was our last session as a fellowship cohort of 30 Latina Leaders from across California. To say that I am humbled by them is not giving them justice. When I signed up for HLI, I was seeking a way to do more. And yet, as the days went by I realized that what I was actually getting was the words and tools to share my story and listen to stories of the women around me. It was in this finding and telling that I was given the strength to better partner with the communities I care so much about. I was reminded of the power of stories. How its through our stories that we get to know each other as neighbors, coworkers, and friends. I was reminded that it is in this weaving of stories that we connect. How we forge relationships and dialogue. Where we find space for new ways and innovation. Sometimes, in the day to day efforts to create policy and processes, we forget the very human journey and reason we do what we do. We persist on affordable healthcare because it is about keeping people living and thriving. We persist on fair immigration policies because it is about families being together and the communities we live next door to. We persist because not doing so dishonors the very shoulders we stand on. Persistence means continued effort. A commitment to keep on keeping on. And today that means continuing to tell our stories on the value of the ACA and how it changed our lives and communities for the better - making us a #HealthierUS. Today persistence means continuing to share the stories and value of our #DREAMers and immigrant families and neighbors. Today is about taking the time to know each other's story, finding our care and love for each other as people, and remembering that the world we want can only happen if we work towards it. By Maria Cadenas, Executive Director of Santa Cruz Community Ventures
On the heels of Labor Day Weekend celebrations the White House announced the end of the Deferred Action for Childhood Arrivals (DACA) program. For many, this was an expected move, one that we hoped would not arrive. After all, DACA was a small step in recognizing who we want to be and can be as a people and a country. It was saying that you are valued as a human being, a neighbor, a part of our community. And in doing so it made us stronger. DACA provided $200 billion to the economy and one-fifth of DACA recipients work in the health care and educational sector. But what DACA, in its own imperfect way, was really about was saying that there is no "other" in America. And that is the real reason to defend DACA, because its end is a blatant effort to reinforce the "other." A society for some and only available to others if the ruling class approves. And that is the great tragedy. This is not about being shocked at the administration. It is not about political expediency. This is an effort to codify and define who America is for and who it is not for. An effort to codify who gets to participate in this great American Dream - from our schools to our economy. The question is, does the United States, as a people, want that caste system? Because DACA is not about DREAMers, it is about who we want to be. So I ask you, in the spirit of the Labor Movement, which side are you on? By Maria Cadenas, Executive Director of Santa Cruz Community Ventures
Our work at SCCV is grounded on our belief that a new economy that creates a more equitable, sustainable, and just community for all is possible and necessary. Our work is beyond poverty, beyond access to a broken system. Our work is about the world we want to see and the economic and business systems that will help us get there. We are at a point of innovation, imagination, and vision. Our work is based on the U.S. ideals that we are all created equal and with the promise that we have indelible right to life, liberty, and happiness. But to build something new, to emerge beyond the world we know, we have to acknowledge and recognize the hate and divisiveness that came into full view in Virginia this weekend. If we are brave enough to take on changing our economic and business models, we must be brave enough to talk about race. When we talk about working to create a new economy, when we speak about wealth gaps and affordability, we are talking about the fact that the system itself does not work. And it does not work precisely because of the inequities it is built on. Today, I ask that we have the courage to be visible and intentional about our support of those U.S. ideals of equity and opportunity for all. Let us remember, that to speak of innovation and truly bring change, we have to take a long hard look at unspoken assumptions, unacknowledged privilege, and have the courage to acknowledge that we are in this together. After all, there is only us. #NotSilent By Brando Sencion, Program Coordinator
The Affordable Care Act recently faced possible removal and replacement by a bill in the senate that failed to pass. The law that is mostly known for its healthcare, has worked in favor of low-income families in relation to their finances by eliminating asset limits for all children and adults. This important aspect of the bill should be a critical component future health care laws should uphold. Prior to the ACA, 27 states imposed asset limits on families as low as $1,000. The elimination of these asset limits has removed a financial barrier for low-income families. Families can obtain economic security by building upon their existing assets without losing essential benefits. Low-income families are in constant struggle with affordable healthcare and financial security. They find it difficult to save, especially when dealing with the expensive cost of living in Santa Cruz County and paying for medical expenses. At the moment, there is a sense of alleviation due to the removal of asset limits the ACA has brought many families. Important components such as the removal of asset limits should be a core mandate for future health care laws and one of the focus points in the financial capability community. Asset limits and Financial capability comes into play with low-income families and their finances because of the importance of building financial security. The benefits of knowing how to budget and save are essential for families to improve their economic situations. The goal of financial capability is to educate residents and continue to build assets to create a thriving communities. Thus, continue to call your representatives and let them know that the ACA is more than just health care, but creates access to economic security and growth in low-income families. Also, reach out to Santa Cruz Community Ventures for more information around financial capability and how it can help you. Our communities deserve the opportunity to grow and prosper. By Maria Cadenas, Executive Director of Santa Cruz Community Ventures
The fact that medical debt is the number one reason for personal bankruptcy in the US should be guidance enough to recognize the danger of removing healthcare coverage from millions of families. The Affordable Care Act (ACA) ensures that getting healthy is not a gateway to poverty and its repeal would be an economic disaster. The ACA's expansion of Medicaid, its consumer protection provisions, and the elimination of antiquated medicaid Asset Limit policies all work together to ensure families can focus on getting healthy and not on how to avoid poverty - which usually puts a family in a tough position of having to choose between getting their medication or paying the rent. Consider that 36% of Santa Cruz County households are only three months away from poverty and that the cost of poverty is a burden shared by the entire community. In fact, studies have shown that the cost to the U.S. associated with childhood poverty alone total about $500B per year, or the equivalent of nearly 4 percent of GDP. And let's not forget the thousands of well-paying healthcare jobs that have become their own economic engine in our communities. In Santa Cruz County the repeal of the ACA would costs us $314M per year, and this just accounts for the repeal of the Medicaid expansion. The ACA provides better healthcare to our communities and is an effective economic engine. Its repeal would be a disastrous option for our local economies. Take a moment to share your story on how the ACA has made you healthier. #HealthierUs #HopeActHealth Poor families are constantly thinking about money and savings – save for a car to get to that job, for that rental deposit to move out of the shelter, or for tuition to get an education. Savings is what they aspire and need to do to get out of poverty. But they can’t save because the safety net programs we created as a society actively discourage it by using asset limits.
Asset limit policies create a catch-22 for poor families where if they try to save to move out of poverty they lose basic need support that their savings cannot replace – things like health, food, and rental assistance. Take for example Santa Cruz, where the cost of is 34.7% above the national average. According to Zillow, the average price of rent is about $2,900. To move a family usually must have the deposit and the first month of rent – or about $5,800. Usually landlords also ask for the last month of rent, making the total cost closer to $8,700. However, in California, the cash assistance program under the Temporary Assistance for Needy Families (TANF) has limits of $2,000 for single recipients or $3,250 if household includes person over 60. For these reasons eight states, Alabama, Colorado, Hawaii, Illinois, Louisiana, Marilyn, Ohio, and Virginia, have eliminated the TANF asset limits. The elimination of asset limits recognizes the fact that without savings temporary setback such as job loss, illness, or car trouble can set a family back and prevent them from leaving poverty behind. Families in Santa Cruz county already find it difficult to save and live in an area with extremely high cost of living. Many depend on these public benefits to make ends meet. It would be a lot easier for them to flourish without barriers inhibiting their asset growth. In states that removed asset limits it has been found that removing the asset test did not greatly rise the number of new applicants for public benefits. In fact, the majority of applicants were already in asset poverty. Research has also found that removing the asset limits reduces time, effort and cost to each programs administration. In financial counseling, we also recommend that families have 6 months of living expenses have in case of emergency. That is much more than $2,000. Asset limits are then not only preventing families from saving to move out of poverty, they are actively discouraging families from exhibiting healthy financial behaviors. Call your representative and let them know that asset limit reform needs to happen in the state of California, as well as all over the country. Our communities deserve the opportunity to grow and prosper. |
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