Due to the economic fallout of COVID-19, an unprecedented number of Americans are financially struggling with just over 36 million people in the US having filed an unemployment claim as of this post’s publication.
While this cataclysmic disruption is both painful and challenging, it also presents us with an opportunity to rethink our perceptions and beliefs of what causes poverty and financial insecurity and what solutions we can develop to end them. People’s beliefs and perceptions, and the narratives they construct based on them, about these issues can be different from the realities of people’s financial lives. However, they are equally important to understand if we are to have constructive conversations and build solutions that will garner widespread support and actually get implemented.
Commonwealth and Olson Zaltman presented findings from two new research projects and facilitated a lively discussion with panelists Dr. Neela Saldanha, an independent behavioral science and marketing consultant for the Busara Center for Behavioral Economics and multiple other institutions, and Tomas Gonsorcik, the Chief Strategy Officer, North America, for VMLY&R, on our webinar – Solving Financial Vulnerability in the US: New Research to Spark New Solutions on May 28, 2020, sponsored by MetLife Foundation.
Key takeaways from the webinar:
1. Financial insecurity and poverty are states not traits.
New research presented on the webinar found that people believe, due to circumstances beyond one’s control, that it is easy to fall onto economic hard times. Commonwealth’s research found that 60% of respondents who were, but are no longer, financially insecure said it was difficult to get out of their past experience with financial insecurity. This belief has been magnified by the widespread impact of the economic fallout of COVID-19. Financial insecurity is not about who you are; it’s what you are experiencing in the moment.
Discussing the research, Saldanha noted, “when we show people pictures of ‘homeless people,’ the part of the brain that judges them as actual human beings doesn’t light up. If you then show them pictures and ask ‘do you think the individual in the picture likes vegetables?’ the mere thought about reflecting about their preferences suddenly lights up the part of the brain that thinks of this person as an individual – you’re literally rehumanizing these groups.”
2. Leverage a “journey” metaphor to encourage action.
Those who are economically secure talk about their finances in terms of a journey. This metaphor can be a powerful mechanism to engage in constructive conversations. Saldanha found the metaphor of “navigation” particularly compelling because of the concreteness it lends to the idea of financial insecurity. Saldanha spoke about the utility of the frame, saying that while many have not had the experience of being poor, “we’ve all been on some journey, we’ve all been travelers.” She then went on to describe how the frame gave many people the opportunity to get involved in any individual’s financial journey. “What makes for a successful journey? It’s not just me setting out in a vehicle on my own. There has to be a road, there have to be rest stops, there have to be some places I can drink clean water from, among other things. So what is our role in making someone’s journey successful? What are we – as individuals, as nonprofits, as government, as private sector actors – what are we doing to help along that journey?”
Designing and delivering products, programs, or messaging that indicate you are supporting people as they navigate their financial journey gives people an opportunity to support others while restoring agency and a sense of control to those who are struggling.
3. Narratives matter.
We know that in times of profound disruption, new narratives can and do emerge. In this time of COVID-19, we have an opportunity to tell new stories, informed by our perceptions and beliefs as individuals and as institutions. Speaking about the importance of narrative, Saldanha emphasized that “we are always constructing narratives as human beings. The question isn’t whether we need a narrative – it’s what narrative is salient enough to get people to take action.” And for companies, taking action needs to happen by looking through the lens of “radical empathy,” said Gonsorcik, and “[reframing] what it is that your company needs to be doing – articulating what your mission and purpose is, and pulling it through the actions that you take.”
The robust discussion revealed opportunities in the current climate for individuals and institutions alike to change their products, messaging, practices, and policies around poverty and financial insecurity. In this moment of disruption, establishing a consistent, productive narrative that inspires action, encourages empathy, and acknowledges the challenge at hand gives us the opportunity to tell a new story that can change the way we move forward together. Gonsorcik echoed this point, saying, “this is a moment of time that is as tantalizing as it is difficult. Now is the time to think about those solutions and those actions – companies have to embrace the realities in which they must now operate rather than return to the ways they operated before.”
There was agreement among the presenters and panelists that there is an opportunity right now for everyone – employers, financial institutions, government, nonprofits – to work with their stakeholders to imagine new solutions to build financial security and end poverty.
Commonwealth is continuing to monitor the coronavirus outbreak’s impact on financial security. To stay informed, check out our COVID-19 page for the latest news, insights, and resources; you can also subscribe to our newsletter to receive weekly updates and learn about our upcoming COVID-19 webinar series.
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