What might be the better and perhaps more progressive and proven policy to benefit the lives of present or future generations of those in St. Paul? One answer is opening bank accounts for children at birth. But the smarter answer would be a long-term infrastructure project to fix all the roads, bridges, sewer lines, and other public assets in the city so that a future generation is not burdened with these costs that they will have to bear if we continue to do no more than the pittance, as is currently the case.

David Schultz

The Melvin Carter administration in St. Paul is right to be concerned with addressing the needs of low- and moderate-income individuals in the city. One initiative already under consideration and touted by those who consider themselves progressive is raising the minimum wage to $15 per hour. Elsewhere I have argued that this idea may have limited impact in that it ignores a more fundamental problem of how a lack of affordable child care serves as an impediment to employment and providing it may be a better anti-poverty program that rewards work and supports women.

Bank accounts for children

A second idea also touted by progressives is opening up bank accounts for all children born in St. Paul. The idea is premised upon the work of scholars such as Michael Sherradan and David Kirp, who argued that child savings accounts (CSAs) would be a way to address the lack of income and wealth characteristic among the poor. CSAs would include seed money from government to open an account at birth, with in many cases it matching deposits made by parents, or providing tax incentives to build a child’s. Overall, the goal is to build financial security and capabilities, and perhaps affect educational outcomes.

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Nationally, according to the Urban Institute, the United Kingdom briefly flirted with CSAs until abandoned. Canada and Singapore have also experimented with them, and so have several cities in United States. CSAs have not been around long enough to test whether they have been successful in meeting their goals. Should St. Paul pursue CSAs, it needs to consider how to pay for the initial seeding of the accounts and then subsequent deposits into them. Additionally, one needs to be cautious about claims that they will improve educational outcomes. In general evidence shows educational performance increases with family household income, but simply giving people a bank account at birth does not automatically translate into better grades or enhanced learning, at least in the short term. Another problem with CSAs if done at the city level is that recipients of them might not stay in the city as children or adults, thereby depleting the impact they would have in St. Paul. Public investments by St. Paul should first serve the benefit of its present residents and the concept of inter-generational justice suggests the same.

An alternative

Consider then an alternative — a commitment by the city to plan, bond, and budget for replacing its aging infrastructure over the next few years. Nationally, the American Society of Civil Engineers rates the U.S. a D+ in terms of its grade for infrastructure. Minnesota does not earn much better of a grade. Those of us who drive in S. Paul, know the roads are in bad shape and that the city has aging water and sewer lines. According to St. Paul Public Works Department, it is responsible for “1,874 miles of streets, 806 miles of sanitary sewer, 450 miles of storm sewer, 107 bridges, and 145 miles of bike lanes.” St. Paul only has money, for example, to repair eight miles per year of its roads. The city’s infrastructure is in bad shape, and the problem is being kicked down the street for future generations to finance. In effect, we are saddling our children with the cost of fixing a crumbling infrastructure — they will have to pay for repairs we refuse to finance. How fair is that to them?

If we really wanted to make a difference in the lives of present and future generations in St. Paul it would commit to a realistic multiyear infrastructure plan. The benefits in doing this are significant. First, it addresses a real need–fixing the roads, bridges, and other public systems. Their decay costs drivers, for example, money every year in terms of car repairs. Second, it is a public investment in a public project, having collective benefits for the city that do not run the risk of being exported or lost in the way a CSA can be if someone moves. Third, infrastructure investment produces jobs — not just in construction, but a lot of different types, and that benefits current and future St. Paul residents — and there is solid evidence to support this. Fourth, infrastructure investments help the economy and employers, not just workers.

Finally, infrastructure investments may be a better way of helping the poor than CSAs. As noted, they provide jobs, but also they take away from our children the burden of having to assume the debts to repair the city’s infrastructure. In effect, CSAs may provide funds for future children, but any benefit they bring will be offset by the costs to them for fixing a failing infrastructure. The real progressive solution, and not just the feel good one, might be fixing the infrastructure and not financing CSAs.

David Schultz is a Hamline University professor of political science. His latest book is “Presidential Swing States: Why Only Ten Matter.” He blogs at Schultz’s Take.

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