On July 26, 1990, under a brilliant blue sky and with the stroke of a pen, President George H.W. Bush signed into law the Americans with Disabilities Act (ADA).
“Every man, woman and child with a disability can now pass through once closed doors into a bright new era of equality, independence, and freedom,” said the President, giving voice to the hopes and expectations of millions of Americans with disabilities.
Twenty-five years later, as we celebrate this milestone and the significant progress we have made in creating a more accessible and inclusive nation, we must also pause to recognize the barriers that still exist and how much further we still have to go.
One of the central promises of the ADA was “to advance economic self-sufficiency” for Americans with disabilities. Yet 25 years after passage of the legislation, people with disabilities are more than twice as likely to live in poverty, and just 31 percent of working age Americans with disabilities participate in the workforce, as compared to more than 80 percent of nondisabled Americans.
Furthermore, many individuals with disabilities remain outside the economic mainstream. Two recent reports by National Disability Institute using survey data collected by the FINRA Investor Education Foundation and the FDIC National Survey of Unbanked and Underbanked Households, provide a snapshot of the unique financial obstacles and challenges confronted by individuals with disabilities:
- Almost one in two households headed by working-age persons with disabilities are unbanked or underbanked. Just 46.5 percent of households headed by working age persons with disabilities have a savings account, compared to 72.5 percent of households headed by persons without disabilities.
- Only 18 percent of people with disabilities have determined their retirement savings needs, as compared to nearly 50 percent of people without disabilities.
- Among households headed by working-age persons with disabilities, nearly one-fifth are unbanked (18.4 percent) and more than one-fourth are underbanked (28.1 percent).
- Households headed by working-age persons with disabilities are significantly more likely to report using costly alternative financial services—such as payday loans—than households headed by those without disabilities (46.7 percent vs. 35.1 percent, respectively).
These data demonstrate that disability and poverty still go hand in hand, and that people with disabilities are too frequently outside of the economic mainstream, challenged to identify a pathway to a better economic future.
The time to focus efforts toward the economic inclusion of persons with disabilities is now. Multiple new federal policies are paving the way for individuals with disabilities to enter the economic mainstream. For example, ABLE accounts—created through bipartisan legislation enacted last year—offer a new type of tax-advantaged savings account that allows certain people with disabilities to save and plan for short- and longer-term needs, such as education, employment, transportation, housing, technology, and health care. Importantly, money saved in an ABLE account is not counted as an asset for purposes of determining whether someone qualifies for federally-funded public benefits, including Supplemental Security Income (SSI), Medicaid, subsidized housing and food assistance. ABLE accounts in essence serve as a down payment on freedom—improving an individual’s ability to save, increase their independence, and forge a pathway out of poverty.
Given that nearly one in two households headed by working age persons with disabilities are unbanked or underbanked, establishing a mainstream banking relationship will make a significant difference for millions of Americans with disabilities and their families. Mainstream banking offers access to the same safe, secure, federally-insured accounts that the majority of Americans utilize for their everyday financial needs. These financial services are less costly, more secure, and create a better foundation for acquiring and maintaining assets than alternative financial service options like check cashing stores, pawn shops, and payday loans.
We look to America’s financial institutions to focus on access—helping consumers enter the banking system; sustainability—keeping consumers in the banking system; and growth—deepening banking relationships in order to improve the banking status and financial behaviors of adults with disabilities. With FDIC leadership, we are optimistic that our nation’s youth and adults with disabilities can build their trust and confidence with a mainstream bank in their community that invests in a long-term customer relationship. In partnership with both the public and private sectors, the National Disability Institute will continue to highlight the challenges and opportunities of engaging the disability community to expand the inclusiveness of the banking system.
Our current priorities for promoting economic inclusion and financial empowerment include: expanding the Earned Income Tax Credit (EITC) to lower the eligibility age and improve the credit’s value for workers without dependent children; reforming Social Security’s rules to allow a gradual reduction of benefits for working Social Security Disability Insurance (SSDI) beneficiaries; modernizing the outdated SSI asset limits, currently set at just $2,000 for an individual and $3,000 for a couple; and enhancing the ABLE Act to reach more individuals with disabilities and to increase the annual contribution limits on ABLE accounts.
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As we celebrate the 25th Anniversary of the ADA we acknowledge the strides that our nation has made towards full inclusion. Meanwhile, we must acknowledge the millions of Americans with disabilities still left on the outside looking in. And we must continue our work until the full promise of the ADA is realized.
To quote Bob Williams, a distinguished activist, policymaker, and public servant, “The ADA stands for the proposition that the American Dream must be accessible to all and within reach of those who seek it and are willing to work violently hard to achieve their slice of it. It equips us with the opportunity, tools and obligation to make good on this principle. The rest is up to us.”
Authors’ Note: The National Disability Institute has published two groundbreaking reports, Banking Status and Financial Behaviors of Adults with Disabilities (PDF) and Financial Capability of Adults with Disabilities (PDF), using national survey data to examine the state of financial inclusion for Americans with disabilities.