Despite years of economic growth and a declining unemployment rate, the economy – from the perspective of many Americans – is far from healthy. For decades, wages for everyone but the top quintile of earners have remained stagnant or declined, while Americans’ participation in the workforce is at its lowest level in nearly forty years. At Pacific Community Ventures, we believe that community development financial institutions (CDFIs) and the broader impact investing industry are ideally positioned to tackle this issue by supporting businesses that create high-quality jobs offering decent wages, benefits, career and wealth-building opportunities, and fair and engaging workplaces. Yet America’s jobs problem is too large and complex for individual businesses and investors to confront on their own. Without a concerted effort by government to improve job quality in partnership with businesses, investors, and the social sector, we cannot credibly expect to see changes in the economic trends that have left most American workers behind for decades.
To this end, we are excited to release our second report on job quality, called Public Policy and Investments in Quality Jobs, which explores the potential for smart, targeted public policies to encourage private sector investments in quality job creation. We identified five existing federal programs that could be modified to direct more capital to businesses offering high-quality employment opportunities, particularly for people facing barriers to employment:
- New Markets Tax Credit (NMTC)
- Community Reinvestment Act (CRA)
- Small Business Administration (SBA) Programs
- Federal Government Procurement
- Securities and Exchange Commission (SEC) Disclosure
Read The Full Report
Our recommendations are numerous and varied, and can be classified in three categories: financial incentives for quality job creators, increased transparency pertaining to job quality, and required job quality standards for businesses and investors participating in certain government programs. Recommendations include the following:
- Modifying tax credit selection criteria, varying loan terms, and creating a tax credit “set-aside” to favor quality job-creating businesses;
- Including reports on job quality metrics within the standard reporting of financed businesses;
- Creating a public dashboard with data from CRA examinations and adding a statement to CRA rating guidelines affirming that examiners may take quality job creation into account when determining a bank’s rating;
- Collecting and analyzing data on the quality of jobs supported by SBA programs, introducing job quality provisions to existing SBA loan programs by tying loan eligibility to job quality improvement standards, and providing larger guarantees or reduced fees for quality-job creating businesses;
- Prioritizing quality job-creating companies when awarding government contracts, adopting a set-aside for companies that offer quality jobs, and requiring all federal contractors to adhere to quality jobs standards; and
- Adding provisions to SEC requirements that would mandate certain U.S.-based publicly traded companies to report on quality jobs metrics in addition to other standard reporting.
We want to thank the Surdna Foundation for its generous support of this research, without whom this report would not have been possible. We would also like to thank the dozens of interviewed experts and leaders in the public, private, and social sectors who informed our perspective on the feasibility and potential impact of policy changes intended to support the creation of good jobs.
While it is our hope that this report catalyzes informed discussions with policymakers that lead to quality job-creating policy change, this effort is just one part of PCV’s multi-pronged strategy to support the creation of jobs that are good for workers, businesses, and their communities. We need more policies that support quality job creators, but we also must provide resources and guidance to entrepreneurs who want to create good jobs but simply do not know where to begin. In this vein, we’re thrilled to announce that we are currently developing a toolkit for small businesses that will contain practical resources and guidance to create good jobs and healthy work environments that reduce turnover, increase productivity, and enhance employee wellbeing. Be on the lookout for more updates on this project in the coming months.
Do you know of valuable existing resources that business owners use to design and create good jobs and engaging workplaces, suggestions for people we should talk to, or ideas regarding content we should include in the quality jobs toolkit? If so, please reach out to us!