In a commendable effort to empower the youth, WNBA legend Angel Reese and NBA legend Magic Johnson have launched the Wealth Playbook, a financial literacy program for Baltimore, MD high school students. Hosted in association with the Angel C. Reese Foundation, the Magic Johnson Foundation, and Pull Up Neighbor, the program was launched in Reese’s own Saint Frances Academy. Over the span of four sessions, students are taught the fundamentals of budgeting, understanding credit, and building long-term wealth.
The purpose of the program cannot be mistaken for anything else: equip the next generation with the wherewithal for survival in an increasingly complicated financial environment. Financial literacy, however, is a good step, but no cure for the structural economics facing low-income communities. To be truly effective, we must augment this with calls for better compensation and access to physical resources.
The Limits of Financial Literacy
The benefit of financial literacy cannot be argued with. Learning how to budget, avoiding the pitfalls of debt, and invest can form the basis for financial security. For the students of Saint Frances Academy, it can be the key to transforming their financial futures. But the harsh reality of the matter is, financial knowledge only goes as far as the resources on which it is being based. For poor Americans, far too frequently, the problem is not a lack of information, but a lack of funds with which to work in the first place.
As of a 2023 Federal Reserve report, 37% of Americans were unable to meet the $400 emergency cost without selling assets or borrowing. Less than $500, according to Yahoo Finance, matches the savings level of the average American, a figure far below that for low-income households. For them, no amount of budgeting can protect them from the financial fragility of an emergency doctor’s bill, a car repair, or a job loss. Inflation, as it has raised the cost of such essentials as food and housing, and the specter of an impending recession merely make this fragility greater. It will be of little use to be told to stretch a dollar when the dollar barely fits between the essentials.
The Privilege Gap
The disconnect between financial literacy programs and the real experience of poverty becomes mind-boggling when we include the privilege gap. Celebrities like Reese and Johnson, as well meaning as they are, are playing a different economy. With wealth advisors on their payroll, seven- or eight-figure endorsement deals, and tax-favored charitable endeavors, their financial security is practically guaranteed. For them, money literacy is a matter of how to sustain and expand wealth. For the poor, it’s a survival issue. This gap can make such programs deaf to the experience of those scraping by, and even stigmatize them.
The subtext—either explicit or implicit—is one of financial struggle as a product of bad decisionmaking rather than structural barriers. For most Americans, however, paycheck-to-checkbook living stems from forces beyond their control: stagnant wage growth, discriminatory employment practices, or not having access to affordable health care or a good education. For Black Americans, the contrast is more dramatic. Black families in 2022 had a median wealth of $24,100, while families of color had $188,200, according to the Federal Reserve’s Survey of Consumer Finances. That gap, the product of decades of structural inequality in the form of redlining and disparate access to employment, will hardly be assuaged by budgeting classes.
The need for systemic solutions
Although financially savvy, financial literacy programs do not tackle the underlying causes of income inequality. If we are truly interested in closing the wealth gap, we need to transcend teaching how to stretch limited resources and instead concentrate on building those resources up instead. Fairer wages are a good place to start. The $7.25 minimum wage, stuck in place since 2009, simply will no longer cut it in today’s economy. For a 2024 report released by the Economic Policy Institute, a single, non-elderly adult with no dependents in most cities in America will need at least $15-$20 an hour for basic expenses. For low-wage earners, a boost in the form of a living wage would enable them to save, invest, or fall back during hard times—financial literacy would come into play.
Following salaries, capital access is important. Without capital, most of these programs are teaching entrepreneurship, but entrepreneurship takes capital the low-income citizens often can’t acquire. Entities like Zeal Capital Partners’ $82 million Fund II, facilitated with the involvement of organizations like Spelman College, are an inspiring model. With a focus on fintech, health, and talent acquisition, Zeal is deploying real capital, not counsel, into low-income communities. Programs like low-interest loans or grants for Black businesses have the potential to make availability of financial education more widespread by giving the resources required to make it operational.
The Role of Celebrity Advocacy
Influencers like Reese and Johnson have a privileged soapbox from which they can make a positive impact. As much as their television programs bring the problems into the spotlight, they might be able to make a larger impact by championing policy reforms instead. Imagine if celebrities used their clout for supporting policies such as a higher minimum wage, universal healthcare, or affordable housing—policies addressing the underlying issues facing the communities they are trying to benefit. Their visibility would also shine a light on initiatives providing immediate financial assistance, such as grassroots-level microgrants or partnerships with organizations like 1st Street Partnerships, a nonprofit with the mission of inclusive AI education to prepare under-resourced communities for good-paying tech careers.
Furthermore, celebrities are rewarded with write-offs for charity projects, a pecuniary benefit denied the poor they are trying to assist. Such a dynamic calls for projects that, beyond performative gestures, consider participants’ budgets first. Financial literacy initiatives need features that link participants with access to a job, with financial assistance, or with funding—features that bridge the gap between knowledge and practice.
Means for Progress
Financial literacy is part of it, but it’s not the whole thing. To truly empower low-income communities, we need a whole approach, with education as well as with issues of economic justice involved. Some concrete steps we can take are:
1. **Fight for a Living Wage**: Push for state and national legislation for a higher minimum wage, at the cost of living rate, in order for workers to be able to live at a level above subsistence.
2. **Enhance Access to Capital**: Develop more programs like Zeal Capital Partners, providing capital for entrepreneurship and innovation in underrepresented communities.
3. **Job Training Integration**: Integrate finance literacy with industry-related skills training in high-paying, high-demand industries like technology, such as Monk Inyang’s 1st Street Partnerships. 4. Remove Systemic Barriers: Promote policies regarding housing, health care, and educational inequities, disproportionately affecting low-income and minority populations.
5. **Empower Community Voices**: Establish programs in partnership with the communities they will be serving, as opposed to top-down, one-size-fits-all solutions without regard for place context.
Conclusion
The The Wealth Playbook and similar books are a beginning, but barely enough. It’s like giving someone a driver’s ed program, but leaving out the car. As Yannise Jean rightly puts it, “These lessons in financial literacy won’t make you any richer” if one has nothing with which to start out. It’s time for a bigger conversation—one in which we couple education with a struggle for higher wages, access to capital, and structural change. Anything less will leave us stuck in the rhetoric of symbolic gestures, rather than serious movement toward a narrowing of the wealth gap. Yannise Jean reports on tech and politics as a Brooklyn-based writer, with a focus on the intersection of innovative solutions with structural inequality in the pursuit of economic empowerment.
