In order to build wealth and create opportunities in and across America’s underserved communities, and reverse the troubling trends we’re seeing in our economy, we no longer find it defensible to focus on job creation alone. It’s clear that job creation does not itself equate to lasting economic change. And so, we must shift our focus to the creation of higher quality jobs — jobs that are good for workers and their families, good for businesses, and good for communities — enabling us to build an economy that works for everyone.
Each month, we bring you the latest roundup of news from the fight for quality jobs for working people.
Pushing the Capital to Support Working People
In the world of Wall Street, “shareholder activism” usually means buying up stock to pressure a company to invest less in its employees and innovation, and to hand more money back to wealth shareholders. It’s one of several reasons that the quality of jobs in America has degraded over the last twenty years – and it’s something that could be changing. A coalition of community groups and labor unions has formed FedUp – a new organization that plans to use shareholder activism to push the Federal Reserve into better policies that would favor working Americans instead of the financial elite. Read more on Institutional Investor >
Another way that Wall Street’s influence corrodes American business is through an emphasis on short-term gain over long-term investment in a company, its jobs, and the goods and services its producing. There’s a voice working to change that – and it’s a massive voice. BlackRock Capital, which holds almost $5 trillion in investments, has emerged this year as a leading advocate of long-term gain. And they seem to be walking the talk – developing a new unit within the organization that focuses on engaging companies on environmental, social, and governance (ESG) issues. Read more >
For African-Americans, Income Inequality Runs The Spectrum
Black Americans aren’t making economic progress. That should come as a surprise to no one, but a recent report from the Economic Policy Institute shows that the black-white wage gap is now the widest it has been since 1979. What’s more interesting, and concerning, is how inequality is also increasing. It used to be that low-skilled black workers suffered the greatest disadvantage relative to their white counterparts. But there has been a strange reversal in the past 40 years. EPI finds that the black-white wage gap has become wider — and is widening faster — among those with more education. Read more on the Washington Post >
The need for good jobs and pathways to better earnings is urgent. Low-wage jobs are not only growing but becoming even lower paid. Meanwhile, the share of jobs that pay middle wages has shrunk since the recession, and has only recently begun to rebound. Racial disparities continue to widen, as black workers experienced greater declines in median earnings than white and Hispanic workers did in the years following the recession. So what can state and local leaders due to create more good jobs for Africa-American workers? Read a slate of a new ideas on The Brookings Institute >
Another way to fuel more good, living-wage jobs in black communities to through investing in neighborhood-grown small businesses. When starting a new venture, entrepreneurs have long been told to reach out to their friends and family for their initial seed capital. Yet the concept of friends and family funding can be baffling to entrepreneurs who do not come from privileged backgrounds or didn’t attend the right schools. And it can be downright maddening to many African Americans, who, after decades of systematic discrimination, trail behind whites in household wealth. A new funding tool is aiming to change that! Read more on Locavesting >
Time to Double Down on What’s Working
Almost all of the net new jobs created in every state in America are the result of home-grown small businesses. With that in mind, Latino-owned small businesses may be a surefire bet for America’s workers and economy. Latino entrepreneurs are starting small businesses faster than the rest of the startup population, and becoming a bigger part of the total U.S. market every day. According to a study the Stanford Graduate School of Business, if new Latino businesses grew as fast as the U.S. average, they could add $1.4 trillion to the U.S. economy. Read more on the JP Morgan-Chase blog >
A barrier to small business growth that we don’t often hear about is big business – which wields power to gain more favorable terms, and state subsidies. By massing wealth in a few hands, economic concentration allows our public policy to be steered by the private interests of a few. Dominant firms that occupy gatekeeper roles—Google, for example, or Amazon—hold sufficient power to direct the fate of other companies, deciding who floats or sinks. Enforcing our anti-monopoly laws could lead to a renewal of the American economy and American democracy. Read more on Democracy Journal >
Leveling the playing field for small businesses is one way to create new jobs – but how to we ensure the jobs created are better? Back in 2002, California passed a law that provides paid family leave benefits to eligible workers. In many ways, the law mimicked paid parental leave policies that are in effect in nearly every other country in the world. But it was the first its kind in the U.S., and several other states have since followed suit. See how the laws are working on NPR >
It’s a myth that increasing benefits for workers, and giving workers a bigger stake in the company, is always a negative for the bottom line. A great example is King Arthur Flour, a 225-year-old company that prides itself on treating its employees well. It’s not just lip service: King Arthur is one of a growing number of companies that has incorporated as a new type of business called a benefit corporation, which means its mission is to consider the needs of society and the environment, in addition to profit. Read more on The Atlantic >
The On-Demand and Gig Economies Are Harming Workers
Many mainstream images of the growing gig economy feature vignettes of Americans working flexible hours to pick up extra cash: the graduate student who drives for Uber in his spare time, the stay-a-home parent who brings in extra spending money with EasyShift. It’s being praised as the newest innovation in work-life balance and a massive new industry that will displace traditional work relationships. If any of this were actually true, it would be the dawn of a new era. Gig executives are using the hipness of company brands to mask age-old practices to take advantage of workers. Read more on Talk Poverty >
It’s not just gig economy companies that are exploiting workers. On-demand meal kit company Blue Apron boasts of “specialty ingredients that are fresher than the supermarket” and “meats naturally raised on antibiotic- and hormone-free diets.” Given the labor, high ingredient/packaging/shipping costs, and the enticing price tag, the only path to big returns would be through reaching massive scale. Which means that meal kits, are a destined to be like the rest of the food industry: largely dominated by a handful of massive companies that make big profits selling high volumes of low-priced food. According to an investigation by Buzzfeed, Blue Apron is like other food businesses in another way: employees with low pay and tough working conditions. Read more on Buzzfeed >
Beginning this year, PCV has shifted its mission in order to move our economy to one where quality jobs are the norm—not the exception. CDFIs like ours must build consensus around a common definition of a quality job, undertake practical efforts to foster the creation of quality jobs, and measure results to understand what works.