In many ways, the U.S. economy is showing signs of recovery — a slow recovery at the very least. The Native American population, however, has largely been left in the dust. The 5.2 million American Indians and Alaska Natives made up just 2% of the population in 2013, and just 1% of the labor force, so this population is often ignored in national policy discussions. Native populations were also hit harder than most by the recession. Already facing high rates of poverty and unemployment, a 2007 report published by the First Nations Development Institute found that Native Americans are disproportionately targeted by predatory lenders.
There have been some positive steps for Native Americans in recent years, according to a 2013 report from the Economic Policy Institute (EPI). Tribes gained more control over their natural resources and food systems and got involved in the country’s energy sector, for example. President Obama has also taken political steps in support of Native populations, including founding the White House Council on Native American Affairs and making the third-ever presidential visit to an American Indian reservation in 2014.
Nevertheless, Native Americans remain one of the most economically disadvantaged populations in the country. About one in four American Indians and Alaska Natives were living in poverty in 2012, while just one in 10 non-Hispanic whites were living in poverty in 2013.
Between 2009 and 2011 the employment rate among Native Americans ages 25 to 54 was 64.7%. That’s 13.4 percentage points lower than the rate for white Americans. In response to its findings on the unemployment rate, the EPI report emphasized a need for improved education, better access to financial services, and research into discriminatory practices, just to name a few.
The issues Native Americans continue to face are complex and far-reaching. For those who live on reservations, transportation can be a huge burden, as available jobs are likely located very far from people’s home communities. Many reservations also lack resources, so individuals are forced to go elsewhere and support economies outside of their own, further exacerbating the problem.
A 2007 report from the National Congress of American Indians made in-depth recommendations, including long-overdue trust reforms, infrastructure development, small business funding, business and employment tax credits, and many more. The report also called for reform in regard to financial jurisdiction. Regulatory authority is often deferred to the state on reservations, undermining a tribe’s ability to regulate financial activities on their land, deter predatory lending, and choose banks that are responsive to Native American needs.
A growing number of researchers are focusing on financial literacy and education initiatives for Native Americans. The White House cited education and economic development as Native American communities’ most pressing challenges, and in a way, financial literacy programs attempt to address both.
Native American youth are less prepared to make informed financial choices than most of their peers, according to a 2007 report. The Jump$tart Coalition for Personal Financial Literacy administered tests to high school students in 2006 and found that the average financial literacy score for Native students was only 84% of the national average. Nearly 87% of Native students failed the test, compared to 62% of all students. Research like this prompted many organizations to advocate for better financial education opportunities in Native American communities.
According to a 2003 study by the Native American Financial Literacy Coalition, limited financial education and inadequate resources “significantly hindered” the economic health of Native American communities. “They are both a cause and result of the lack of access to capital and financial services available to Native borrowers.” The study also found the top reason Native consumers engage with predatory lenders is a lack of information about banking, personal finance, and credit.
Financial literacy and education programs are a big step forward. These changes can’t be made in isolation, however. For Native Americans to truly gain economic equality, systemic issues, discriminatory policies, and political roadblocks need to be addressed as well. What’s more, tribe leaders and other Native Americans not only should have a seat at the table, they ought to be leading the discussions.