We must work for financial inclusion

Communities of Color in Iowa face economic realities that are often different from their white neighbors. As the executive director of the Iowa Credit Union Foundation (ICUF), through our work I have learned about the barriers Iowans are facing. Understanding the barriers drives my belief we need to work together toward greater financial inclusion for all Iowans.

Racial and ethnic minority communities in Iowa contribute greatly to the state’s economy, culture, and well-being. While more than 90 percent of Iowa’s current population is white, according to U.S. Census Bureau data, it is estimated that more than 20 percent of population in Iowa will be from minority and mixed-race communities by 2045. This underscores the need to invest in fast-growing minority communities.

ICUF commissioned a new report titled “The Economic Realities of Communities of Color in Iowa” to identify barriers to financial well-being within communities across the state and identify opportunities for collaborative solutions.

The report, conducted by Coopera Consulting, uses quantitative presented through research on six indicators commonly used by non-partisan researchers to measure economic well-being and financial inclusion: Employment, Housing, Business Ownership, Education, Health, and Childcare. Qualitative data includes firsthand accounts of Iowans as they have experienced and overcome these barriers.

Key findings include:

• Housing: Homeownership is one of the most effective ways to build wealth. More than 70 percent of all Iowans own a home, but Black Iowans represent a disproportionally low homeownership rate of 23 percent.

•Business ownership: More than 99 percent of Iowa businesses are small businesses, but only 10 percent are owned by racial and ethnic minorities.

•Child care: More than one-quarter of Iowans live in a child care desert. In rural areas, 35 percent of families lack access to sufficient licensed child care providers. According to available data, Iowa loses out on an estimated $935 million in economic activity annually due to lack of child care.

•Education: Data from Iowa Department of Education shows that, per racial group, dropout rates (for students in grades 9-12) tend to be higher among racial and ethnic minorities.

•Employment: Iowa’s overall unemployment rate is significantly lower than the national average, yet ICUF research shows significant racial disparities add a layer of context to this figure. The unemployment rate for Hispanic Iowans is more than double that of white Iowans, while the unemployment rate for Black Iowans is more than three times higher.

Driven by the philosophy of “people helping people,” Iowa’s credit union movement is committed to removing barriers to prosperity; however, these challenges are too big for any one industry or organization to address. It is our hope that this research will equip credit unions, community organizations, and other stakeholders with the tools to find solutions.

Together, we can empower our neighbors and communities with more access to upward mobility and economic opportunity. We hope you will join us in this mission.

Ena Babic Barnes is executive director of the Iowa Credit Union Foundation.