I started working on financial literacy for people with disabilities (PWDs) in 2014 or so. It was when my climate-related research, which I called “New Earth Disability,” became part of the World Institute on Disability’s portfolio. When it comes to nonprofit life, you often work on grant-funded projects and we were still shopping around for climate projects – so in the meantime, I worked on other funded efforts, some of which were around financial literacy and empowerment. One was a revision of EQUITY: Asset Building Strategies for People with Disabilities, a full PDF book on financial literacy that covers topics from budgeting to credit scores to navigating the income and asset rules of government benefits. The clear lesson I learned (which I already knew to a large extent from personal experience) was that PWDs are financially disadvantaged compared to the able-bodied population, must navigate complex income and asset rules, and may not have the financial literacy they need. Supports like EQUITY and Disability Benefits 101 (DB101) were incredibly valuable for our community and PWDs seeking financial empowerment.
Over the following years, I learned another lesson: the financial work on EQUITY and DB101 was clearly related to the climate work of New Earth Disability. In many ways, financial empowerment builds climate resilience, and it’s especially important for the disability community.
If you’re scratching your head, I understand. Most people don’t think of finances when they discuss climate change. When we talk about storms, we consider evacuation and shelter; when we talk about migration, we consider mobility and immigration policies; and when we talk about general weather changes, we think about infrastructure and agriculture. Yet climate change has huge connections to personal finance and the economy at-large. For example:
- The effects of climate change will shrink GDP, with consequences including fewer jobs, fewer goods and services, lower pay, and shrinking government budgets. A 2019 Working Paper from the International Monetary Fund estimates that by 2100, per capita GDP, compared to 2100 GDP if we stay at current temperatures, could be reduced between 1.0% and 2.8% lower in a lower-emissions scenario (RCP 2.6), and between 6.7% and 14.3% in a higher-emissions scenario (RCP 8.5).
- Acute disasters, like storms and forest fires and extreme heat events, have direct economic damage. For example, the economic impact of Hurricane Harvey in 2017 – which largely includes home repairs and replacements, rebuilding or reinforcing infrastructure, emergency services like evacuations and shelter, and putting a value on lives lost – was a full $125 billion. The 2020 California wildfires season caused over $10 billion in property damage and increased health-related costs from wildfire smoke (e.g. exacerbating asthma); California spent more than $2 billion fighting fires that year.
- Climate change raises risks of invasive diseases, and epidemics or pandemics can upend economies. The COVID-19 pandemic was partly due to cities and towns becoming increasingly close to forests and other wildlands, which makes it more likely that humans encounter animals and a virus jumps species. Climate change will also lead to more mosquitoes, with expanding diseases like malaria, dengue fever and Zika. As we’ve seen with COVID-19, an out-of-control pandemic can devastate economies and government budgets along with them; it can also reduce the supply and raise the cost of medicines and personal protective equipment (PPE), affecting insurance coverage and out-of-pocket expenses.
- Adaptation, from reinforcing infrastructure to relocating coastal communities, almost always carries a price tag. We may need to simply abandon some homes or infrastructure, meaning the original investment won’t give as much return as planned (and may be a net loss, depending on when it was built and how it was used). Adaptation may require significant government funds, leading to austerity in other areas (including social services).
- Individuals may bear some financial burden from climate change. Personal costs come from things like evacuation; securing temporary shelter; replacing damaged or destroyed property (including homes); shrinking or lost income streams (including supplemental income if there are government budget cuts); and costs of building personal climate resilience (such as buying a car for evacuation or installing an air conditioner for increasing heat waves).
- The costs of climate change are not evenly distributed, and some are better positioned to handle those costs than others are. The Brookings Institute notes that “[s]truggling U.S. counties will be hit hardest by climate change” and “[g]lobally, low-income countries will lose larger shares of their economic output.” The same holds true for already-disadvantaged population groups, including people of color (POC) and people with disabilities (PWDs).
So, it’s clear that climate change will take a huge hit on our economy and marginalized groups. This will disproportionately affect economically disadvantaged groups. PWDs are clearly economically disadvantaged and have extra disability-related costs throughout their lives. They also utilize government programs and supports throughout their lives, so any disruption to government budgets and operations can be dangerous. A few important financial issues for PWDs include:
- PWDs are already economically disadvantaged compared to the able-bodied population. 2018 United States census data shows that, for non-institutionalized people age 21-64: the average income for PWDs is $40,500 compared to $49,200 for those without disabilities; poverty is 26% compared to 10%; and the employment rate is 37.8% compared to 80.0%. 19% of non-institutionalized PWDs age 21-64 are on Supplemental Security Income (SSI), which is an extremely modest monthly payment: for an individual with a disability, the federal benefit rate is $794/month and some states add an additional supplement (usually maxing out around $400, depending on the state). (data from Cornell University’s Disability Statistics site)
- PWDs almost always have disability-related expenses that able-bodied people do not. Disability-related expenses include things like durable medical equipment (DME), disposable medical equipment, specialized transportation (e.g. adapted vehicles), adaptive equipment and technology, personal attendant care, housing modifications, acute medical needs (e.g. medication or treatment), and more. Depending on the individual and their circumstances, expenses may be covered out-of-pocket, by family members, by private health insurance, government programs, or nonprofits.
- PWDs are sometimes virtually forced into poverty to qualify for life-sustaining government benefits, which in some cases can be worth well over $100,000 per year (from a combination of healthcare, personal attendant care, medical equipment, subsidized groceries, and more). For example, in the United States, an individual can have no more than $2000 in assets to be eligible for SSI, which means that PWDs must stay poor to get starvation-level financial support. Even generous Medicaid programs have limits, such as the 250% Working Disabled Program that puts PWDs’ maximum annual income at just under $64,000.
- Discrimination, stereotyping and a lack of accommodations from childhood onward affect PWDs’ employability and job options. PWDs are often held back or put in special education classes when it is not needed, simply because of educators’ preconceptions. Students may be denied accommodations in school (including medication for learning disabilities), affecting their learning and success. Because of this, PWDs are already at a disadvantage in the job market when they search for work. Employers may consciously or subconsciously discriminate against disabled applicants, or may shirk the need for reasonable accommodations. There are also practical constraints to some PWDs’ job options (for example, I’ll never be a car mechanic because of my limited mobility, but I can still do computer-based work just fine). Of course, many PWDs still land jobs – but the confluence of discrimination, stereotyping and the lack of accommodations leads to higher unemployment and lower average income for the disability community relative to those without disabilities.
- PWDs who are unable to work (e.g. because of severe chronic pain & fatigue) or cannot land a job often survive with the support of government benefits, which in many countries are meager or insufficient to support a decent quality-of-life. Governments that reduce public benefits put these PWDs in even more precarious situations.
- In general, the disability community does not have adequate financial literacy and experience necessary to navigate these circumstances in the best way possible. PWDs without enough knowledge about budgeting, managing their credit, or earning money while keeping government benefits will be in a more difficult situation than if they had more knowledge about how to be financially stable and successful.
It’s clear that climate change will affect the economy, and that PWDs have unique financial circumstances, needs and barriers. What are some of the intersections we should care about? Here are a few examples:
- PWDs may have unique or extra needs in the face of acute climate stressors. For example, some disabilities interfere with people’s ability to regulate their body temperature, so during heat waves, those PWDs may need extra access to air conditioning; however, installing A/C units is expensive and electric bills may go up. During acute disasters, people often evacuate to makeshift “congregate shelters” like high school gymnasiums; these sometimes have limited access and privacy for PWDs, so PWDs may prefer to find an accessible hotel that they pay for out-of-pocket (if they can afford it). Other examples abound.
- In the case of climate migration, accessible travel and shelter will carry extra costs, as will securing healthcare en route and at the destination; meanwhile, PWDs who cross international borders may need large sums of money to overcome disability-related immigration barriers (such as “public charge” rules). In some cases, they may be unable to relocate safely or at all.
- PWDs’ financial limits manifest in lower personal vehicle ownership and a higher use of public transit. (This is also partly related to higher costs of accessible vehicles, such as modified minivans). This raises serious barriers to safe evacuation and adaptation in general.
- Austerity in the face of shrinking economies and tax revenues will almost certainly affect PWDs’ health, safety and well-being. This will especially affect PWDs with higher disability-related expenses and those who do not earn enough from work to cover those expenses. Steep budget cuts leading to reduced services and tightened eligibility rules can endanger lives.
- Contracting economies and limited job opportunities disproportionately affect PWDs for several reasons. For example: PWDs’ already-disproportionately-low income means that any reduction in earnings is that much more precarious for the disability community; PWDs with limited skills, training or abilities (e.g. around physical labor) have fewer job opportunities, which is troubling in a down job market; and employers in shaky markets (especially where there is high unemployment) may be more averse to hiring PWDs due to preconceptions about job performance or from wanting to avoid the expenses of reasonable accommodations.
- The “asset limits” tied to many benefits programs artificially force many PWDs into poverty. In the case of an emergency, PWDs may not have enough money for emergency supports like transportation, hotel rooms, or backup caregivers. PWDs who lose homes or property in disasters may find it difficult-to-impossible to afford a new home or replace lost property.
So, that’s a lot to digest. And these are just a few of the examples of how climate change, disability and economic issues come together. Luckily, financial empowerment for PWDs will provide a huge amount of personal climate resilience:
- Increasing one’s financial stability takes a whole suite of strategies and activities – not just saying “get a job and save more cash.” This requires “financial empowerment,” a multifaceted approach that includes: growing one’s income and savings; understanding how finances affect government benefits (including trade-offs and potential courses-of-action); budgeting; managing credit; increasing one’s employability through education and training; and so on.
- Savings are critical to managing climate-related events and stresses. Savings help with things such as: securing transportation or shelter during/after a disaster; purchasing items that can help with climate stressors, such as buying air conditioners for heat waves or air filters for wildfire smoke; replacing lost or damaged property; paying for medical items out-of-pocket if conventional supports aren’t available; and finding new housing, including making modifications like ramps or bathroom remodels.
- PWDs who receive benefits are often better off if they work part- or even full-time. Most benefits programs allow for modest income, while programs like the 250% Medicaid Working Disabled Program lets many Americans with disabilities earn nearly $64,000 per year while keeping healthcare, dental and even personal care attendant services. PWDs who can save money (without jeopardizing benefits) will benefit from more work and income, as they can stash away some of that paycheck for a rainy day. Even PWDs on programs with savings limits can take higher income and spend it immediately on climate resilience, such as by purchasing a stash of emergency supplies or affording higher air conditioning bills.
- Building good credit and having an active credit card can help PWDs in emergency situations. Ideally, PWDs will not have to borrow money due to climate change – but a credit card can be a lifesaver during a crisis. Building good credit scores also reduces interest rates and the likelihood that someone will need to take out a high-interest loan, like from a payday lender.
- Education and training make people more employable, which is especially useful in shaky economies. PWDs can pursue education and training that is dynamic, so they can more easily find jobs if their job disappears and there are not similar opportunities around. Employability is also helpful if people need to relocate due to climate stressors.
- PWDs with high enough income can sometimes get by without government benefits. For those who can, making the jump to economic self-sufficiency opens more opportunities to invest in personal climate resilience. PWDs in this situation will also have fewer worries about surviving and succeeding in the face of austerity, should climate change threaten government budgets.
It’s abundantly clear that climate change presents major challenges to the economy at-large and individuals’ finances. PWDs have extra financial considerations compared to those without disabilities, especially if they want to receive government benefits. Because of this, PWDs are at a disadvantage because they have lower average income, assets and resources than the able-bodied population; they may have specific disability-related expenses, notably in the face of climate stressors; the eligibility requirements of some government programs artificially force people into poverty, or at least into making difficult decisions; and shrinking government budgets threaten life-sustaining medical and other benefits. Luckily, PWDs can pursue comprehensive financial empowerment to be safer and healthier in the face of climate change.
The next blog will cover some of the many ways that PWDs can increase their financial empowerment and climate resilience. And of course, financial empowerment is valuable in its own right – so it’s always worth pursuing, regardless of how invested you are in climate resilience.