Bending towards economic justice starts with 300 St. Louis seventh graders

As America celebrates Martin Luther King, Jr. Day this week, we at James S. McDonnell Foundation (JSMF), Edward Jones, and Mobility Capital Finance, Inc. find his work and memory especially poignant. Dr. King’s transformative vision of justice and equality inspires and guides us to build a more just society. 

Whether our organizations’ work spans the nation or is focused here in St. Louis, we share a commitment to improving economic mobility for Americans facing the starkest disparities and a common vision for a more prosperous and thriving St. Louis. In the spirit of Dr. King’s message of cooperation and collective care for our communities, we are excited to launch a collaboration that will help tackle one of the greatest challenges of our time: generational poverty. 

In his Nobel Peace Prize acceptance speech, Dr. King called attention to the “great economic gaps” within nations like the United States, where poverty is entrenched and generational. St. Louis has a wealth gap higher than the national average, and is a city where one-third of children live in poverty. Homeownership — one of the bedrock indicators of wealth — lags significantly in St. Louis. Only 49% of the city’s residents own their homes, compared to a 65% national average. These disparities are even greater for Black and Latino residents.

Poverty has cascading effects on people’s lives. Poorer St. Louisans are more likely to have limited access to healthy food, good schools, and a cleaner environment, which affects their health, educational attainment, and career prospects. Comparing ZIP codes in North St. Louis with those in Clayton, there is an eighteen-year difference in resident life expectancy. We also know that access to opportunity can make a difference. In Missouri, residents who have attained a Bachelor’s degree or higher education, earn almost twice as much as those with a high school degree. 

The pilot program will seed $5,000 in an investment account on behalf of 300 income-eligible seventh graders in target St. Louis area neighborhoods. 

In a city where wealth inequality is pronounced, our innovative collaboration is working to narrow the gap. This year, we are excited to pilot a baby bonds program with the power to transform the lives of hundreds of middle schoolers in the St. Louis area. The pilot program will seed $5,000 in an investment account on behalf of 300 income-eligible seventh graders in target St. Louis area neighborhoods. 

The accounts will grow over time, and at adulthood, participants can withdraw the funds to pursue higher education, purchase a home, start a business, or build a brighter future through investments or retirement savings. Unlike programs that start at birth, this pilot’s focus on middle schoolers allows the impact of investments to be realized sooner.

Seventh graders in our program will have a tangible asset to build their financial education around. Moreover, what is economically just in this case, is also economically sound. Young people in the program will spend these dollars toward increasing their earning potential and assets. Working with real funds opens the door to otherwise unrealized opportunities to establish and build wealth.

This idea is gaining traction throughout the country. Legislation for baby bonds was first passed at the state level in Connecticut, and now more than a dozen states and municipalities have considered, proposed, or passed baby bond legislation. Researchers simulating the impact of a federal baby bonds program show that this early investment in youth can significantly narrow wealth disparities between the top and bottom earners in American households. 

Baby bonds have the potential to make a substantial positive impact on the futures of young St. Louisans. We hope that existing programs and the pilot we are launching in St. Louis will inspire government, philanthropy, and the private sector to collaborate and adopt the baby bond approach as a national model for investing in America’s youth.

Dr. King focused on shining a light on both the economic and racial injustice that dominated his time. Through it all, he maintained “an abiding faith in America and an audacious faith in the future of mankind.” Our work on this pilot program is inspired by his courage to dream of a better future for our country’s youth. Wealth is something built over generations. If we break down one barrier to generational poverty, we create an opportunity for a new legacy of stability and prosperity.