A Missourian Among TIME’s 100 Most Influential People

Editor’s note:  In Spring 2010, St. Louis-based Washington University George Warren Brown School of Social Work’s Professor Michael Sherraden was named to Time Magazine’s Time 100.  Professor Sherraden was my graduate studies advisor.  In the more than 20 intervening years, he has accomplished much which directly benefits those living in poverty and gives us Missourians someone of whom to be proud!  What follows was included in a recent GWB e-newsletter, the “St. Louis Globe-Democrat,” and on Washington University’s website.

TIME Magazine has named Michael Sherraden, PhD, the Benjamin E. Youngdahl Professor of Social Development at Washington University in St. Louis, to the 2010 TIME 100, the magazine’s annual list of the 100 most influential people in the world.

Sherraden, the founder and director of the Brown School’s Center for Social Development (CSD), is known for his pioneering work on asset building for low-income people.

“The Time 100 recognition is a huge surprise,” he says. “So many people could be — and deserve to be — recognized for their creative and productive work, so I feel very fortunate to be selected.

“The work that is being recognized has resulted from the talents and strong commitment of a large team of people at Washington University, and relationships with dozens of partner organizations across the country and around the world.

“This Time 100 award belongs to the talented staff, faculty, and graduate students associated with the Center for Social Development,” Sherraden says.

In his 1991 book, Assets and the Poor: a New American Welfare Policy, Sherraden proposed establishing individual savings accounts for the poor — also known as Individual Development Accounts (IDAs). His program calls for the government and private sector to match individual contributions to IDAs as a means of encouraging savings and breaking the cycle of poverty. IDAs have been adopted in federal legislation and in more than 40 states.

Research results from the American Dream Demonstration, a large, eight-year Center for Social Development (CSD) research project to test IDAs, were instrumental in the design of Universal Savings Accounts, a 1999 proposal by President Bill Clinton that would enable all working people to have a 401(k) retirement plan.

Sherraden’s work on assets has influenced policy development in the United Kingdom, Taiwan, Canada, Indonesia and other countries. In the United Kingdom, as of 2005, all newborns are given an account at birth, with a larger initial deposit into the accounts of children in low-income families.

CSD is now testing universal children’s savings accounts in a project known as Saving for Education, Entrepreneurship and Downpayment (SEED).  Child Development Accounts (CDAs) are savings accounts that begin as early as birth. CDAs allow parents and children to accumulate savings for post-secondary education, homeownership or business initiatives.

“There is evidence that when there are savings and assets in the household – particularly savings in a child’s name – that children have greater educational attainment, are more likely to do well in high school, attend college and graduate from college,” says Michael Sherraden.

In the United States, there are a growing number of high profile CDA programs based on the work of Center for Social Development. Most recently, a bipartisan group in Congress introduced the America Saving for Personal Investment, Retirement and Education (ASPIRE) Act of 2010, which would provide to every newborn an endowed account with a one-time $500 contribution. The purpose of the bill is to encourage savings, promote financial literacy and expand opportunities for young adults.  Children in households earning below national median income would be eligible for an additional contribution of up to $500.

“We hope that children in lower income households will get larger initial deposits because there already are plenty of savings and asset building strategies with tax benefits for people who are not poor,” Sherraden says. “An additional incentive to save for lower income families would be very important. All families should benefit.”

Sherraden and CSD are leading the SEED for Oklahoma Kids (SEED OK) initiative, which tests the impact of giving every child a CDA at birth, to be used for post-secondary education. This work is intended to inform a national CDA policy in the United States.

“Through SEED OK, we have randomly given 1,300 children an account and randomly selected 1,300 children as controls,” Sherraden says. “This is a scientific test of these accounts over time. We’re following the kids to see how they do in their early year and into schooling. Hopefully someone will follow the children all the way through college.”

Sherraden says that because people are thinking more about savings than credit during these tough economic times, the timing could not be better for introducing development accounts.

“It’s hard to move public policy during this time, but there is popular and bipartisan support for this idea,” he says. “The first challenge is to create a system of accounts. The initial deposits can be very modest, but if you create a system of accounts it’s like setting up a plumbing system.

“Once the pipes are there, the water can flow through the pipes. So, the money could come from various sources — families, corporations, philanthropy, government — once you have the accounts in place.”

Sherraden has served as an adviser and consultant to the White House, Department of the Treasury, Department of Housing and Urban Development, Department of Health and Human Services, the Carnegie Council and many other organizations.  In addition to his asset-building research, Sherraden’s scholarship also focuses on civic service and productive aging.

The TIME 100 list, now in its seventh year, recognizes the activism, innovation and achievement of the world’s most influential individuals — people who are using their ideas, their visions, their actions to transform the world and have an effect on a multitude of people.

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