Curated Post: Next City Covers Rochester as featured case about banking efforts

On June 3rd, 2024, nonprofit resource Next City posted a story titled “Why a Rochester Credit Union Wants the Local Government to Create Its Own Bank” as a case study for lenders meeting residents’ and small business owners’ needs. The Genesee Co-op Federal Credit Union is featured as part of a push to create a Bank of Rochester, a “public bank” intended to hold only government deposits and partner with local private lenders.

The article outlines how the idea of a public bank would work and makes the argument for the potential of such a program. This idea is also a spark for thinking about alternative lending, alternative banking options.

As we learned in Dr. Matthew Desmond’s Poverty, by America, the banking industry is a particularly institutionalized impediment for upward mobility. Consider this alternative, or come up with your own ideas, as you engage in conversations about banking equity, and the potential of this community to encourage home ownership, small business development, and our general upward mobility efforts.

Testing a Guaranteed Basic Income

In Rochester, one in four people live in poverty. Imagine how our community might change if everyone had enough money to cover living expenses, as well as enough to manage urgent or unexpected ones.

That’s part of what the City of Rochester is exploring in its 12-month Guaranteed Basic Income Pilot Program, which began in 2023. The idea is to see how a guaranteed payment of $500 per month will help residents who live at or below 185% of the federal poverty level. Payments are unconditional — participants do not have work requirements or restrictions on how to spend money.

Other cities across the country are exploring similar programs to find ways to address poverty.

Pilot programs like these are valuable because they allow us to test novel approaches on a small scale in the real world. The key is that these projects last only for a prescribed period of time. Fears of failure and loss of funding can bring the temptation to let them go on indefinitely without analysis, but it is essential to stop and evaluate the data.

Rochester’s Guaranteed Basic Income Pilot made its first payments in October 2023. As the program unfolds over the coming months, city officials and their community partners will be examining its impacts. We will all have to stay tuned!

Who gets in to college, and why does it matter?

On July 26, 2023, Economists Raj Chetty of Harvard University and John Friedman of Brown University published a paper examining the impact of college admissions on upward mobility. They used admissions data, income tax records, and SAT/ACT test scores to study whether a change in admissions policies at the most prestigious colleges could increase socioeconomic diversity of US leaders.

Their work finds that current admissions policies perpetuate privilege, emphasizing legacy status, extracurricular activities, and athletics — all of which are biased toward affluence. The takeaway is that a change in policy toward a focus on other factors could improve socioeconomic diversity in accepted students and therefore improve upward mobility.

For a deeper dive, read the paper and check out this Brookings Insitute webinar.

Living Wage Calculator

A living wage is defined as the income that a full-time worker requires to cover or support the costs of their family’s basic needs where they live. It often exceeds the minimum wage, which is the lowest pay rate allowed by law, and the poverty wage, which is the minimum amount of pay that would put a worker below the poverty line.

The Living Wage Institute at the Massachusetts Institute of Technology (MIT) created a living wage calculator to factor in the cost of basic needs in different localities. The calculator features geographically-specific costs for food, childcare, health care, housing, transportation, other basic needs – like clothing, personal care items, and broadband, among others – and taxes at the county, metro, and state levels for 12 different family types.

What is the living wage where you live?