Identified drivers of debt among communities with low wealth and communities of color in Miami-Dade County to help inform advocacy on economic justice.

In Miami-Dade County, low-wealth communities, predominantly composed of people of color, have long been excluded from wealth-generating opportunities, access to capital, and seats at the tables of policymaking. This has caused an extreme racial wealth gap: in 2019, Black households held less than 6 percent of the median asset value of white households, Caribbean Black households held 12 percent, and Hispanic households held between 9 and 23 percent. To develop a deeper understanding of the factors that drive debt among communities with low wealth, Catalyst Miami collected data from their base of community members. Catalyst Miami also convened a steering committee of community members who are impacted by debt to provide guidance and feedback about data-collection plans and about how to interpret and use the findings from this research.

To uncover the drivers of debt, Catalyst Miami surveyed program clients and conducted focus groups. Through 300 surveys and four focus groups, Catalyst Miami learned that the biggest sources of debt are credit cards, student loans, and health care. Of these, health care bills were identified as the most likely to be sent to collections. Nearly half of survey respondents have over $20,000 in debt, and they identified that debt caused stress and made it harder for them to access health care and affordable housing. The survey also found that while the majority had a plan for paying off their debt, 75 percent do not have sufficient savings to cover three months of living expenses. Catalyst Miami’s research partner, the University of Miami’s Engagement, Power & Social Action Research Team, is continuing to analyze survey and focus group data, including investigating connections between participants’ income and the types of debt they hold.

Catalyst Miami and the project’s steering committee will use these findings to identify the most important drivers of debt for Miami-Dade County residents and to target policies that would lead most directly to relief for households of color and narrow the racial wealth divide. Findings will be shared with the community and will also inform the work of Catalyst Miami’s partners in their municipal debt campaigns.