Creating Quality Jobs and Building An Economy That Works For Everyone
In the last few years, the U.S. unemployment rate dropped below 4% for the first time in a generation and social impact investing finally entered the mainstream. Yet almost half of American workers are stuck in low-wage jobs with little opportunity for advancement, the number of small businesses is at an all-time low, and race and where you’re born remain some of the biggest factors influencing financial success in life. If you take inflation into account, working people haven’t seen their wages raise in a decade. It’s a tale of two Americas, where far too many workers and communities are being left behind.
We’ve historically focused on supporting small businesses and investors to create jobs in underserved communities — but creating jobs is no longer enough to address rising inequality. As an impact investor, we realized we had to ensure our capital was first and foremost creating good jobs with living wages and benefits – so in 2016 we made an organization-wide commitment to support the creation of quality jobs both in our own work with small businesses and with the broader social sector. Our vision is to create stronger communities from the bottom up through making quality job creation the new norm.
What Is A Quality Job?
After conducting in-depth research and interviews with leading experts in labor issues, impact investing, and the small business sector, among other related fields, PCV identified five core components of a quality job. Given that the specific elements of a quality job vary by industry, business size, job function, and employee demographics, PCV synthesized a flexible definition. A quality job, according to the study, provides at least three of the following five key elements:
A Living Wage
A living wage is a salary sufficient to support a decent standard of living—or, at minimum, exceeds the median wage offered within the employer’s industry.
These improve health, and promote work-life balance among workers. These include paid leave, health insurance, and a retirement savings plan.
Career-building opportunities help employees develop the skills, networks, and experiences necessary to launch a career or advance along a career path.
Wealth-building opportunities enable an employee to build the assets they need to manage financial emergencies and achieve long-term financial security.
A Fair And Engaging Workplace
This could include flexible and predictable schedules, soliciting employees’ ideas and helping them understand how their work contributes to the business.
Defining And Measuring Quality Jobs
Moving Beyond Job Creation seeks to answer two important questions at the center of CDFIs and impact investors’ efforts to create quality jobs: 1) What is a quality job, and 2) how can investors measure job quality? The paper also offers practical steps for investors and others to take to incorporate the measurement of job quality into their existing data collection processes that would support their financing efforts aimed at creating quality jobs.
Creating quality jobs should not be viewed as a static goal, but rather as a continuous journey. Investors and the businesses they support should strive to foster incremental improvements in job quality, raising standards in deliberate yet meaningful ways for employees. Businesses and investors should also view the fostering of quality jobs as an ongoing process.
The incorporation of job quality as part of the deployment of capital in our communities has many benefits. Improving job quality for workers can help businesses in achieving better financial results and have a ripple effect on local economic growth.
The Role Of Policy
CDFIs, foundations, and others are doing their part to begin building a better economy for workers and for businesses. But our jobs problem – driven largely by globalization and technological advances that reduce the need for human labor – is too large and complex for the social sector or individual businesses and investors to confront on their own. While businesses are the sources of job creation, government programs can incentivize investment that leads to more jobs and to higher quality jobs.
As the second set of research in PCV’s two-year initiative with the Surdna Foundation, Public Policy and Investments in Quality Jobs explores the potential for smart, targeted public policies to encourage private sector investments in quality job creation. The report examines in detail five federal policies and programs that could be adapted to create more economic opportunity and more quality jobs in communities that have been left behind by globalization, automation, or generations of discrimination.
Creating good jobs for working people in every community across America is one goal everyone can agree on. Doing so by making bipartisan government programs that are already working do even more for us is a recipe for success that all can support.
More Americans work in retail than in manufacturing or mining. As part of our vision to make quality job creation the norm, we believe that we must equip small businesses with the practical tools and resources they need to offer higher quality jobs in a way that balances their business needs and bottom lines with better wages and benefits for their employees. We know that small businesses want to provide good employment opportunities for their workers – but they are often uncertain of how to do so in ways that make sense for their business. We’re committed to enabling them to succeed – and believe a simple, practical quality jobs toolkit will help spur them to action.
Over the next two years we’re working with the Workforce Strategies Initiative at the Aspen Institute to develop, pilot, and publish a quality jobs toolkit focused on retail small businesses. The quality jobs toolkit has the potential to enable meaningful improvements in job quality in an industry that relies on a significant number of frontline workers and operates with limited resources — and once it’s proven out across the retail industry, we can adapt it to restaurants, health services, and on and on.
We know that small business owners want to provide good employment opportunities for workers, but are often uncertain of how to do so in ways that make sense for their business. Good Jobs, Good Business equips them with the practical tools and resources they need to offer higher-quality jobs in a way that balances the needs of their business with the needs of their employees.
Good Jobs, Good Business
Quality Jobs Fellowship
Pacific Community Ventures’ and our President & CEO Mary Jo Cook were awarded a Quality Jobs Fellowship from the Aspen Institute. Mary Jo Cook is our mission-driven leader who’s passionate about using business as a force for good. She believes that amidst widening income and wealth inequality, the decline of jobs that afford workers dignity, financial security and economic mobility is one of the biggest societal challenges of our time. Under her leadership, PCV has launched a national initiative, engaging multiple stakeholders on new ways for creating jobs that are good for workers, good for businesses, and good for communities. The Aspen Institute conducted an in-depth interview with her on our work.
Quality Jobs Fund Investment
Pacific Community Ventures has been awarded $3.2 million by the Quality Jobs Fund! The Quality Jobs Fund is a collaborative project between the Federal Home Loan Bank of San Francisco, the New World Foundation, and the Aspen Institute. The Quality Jobs Fund is a $100 million initiative to support quality job growth in underserved communities. PCV will leverage this investment to raise our own $12M fund, which includes zero-to-low interest rate long term lending capital, paired with grants to support loan-loss reserves, quality job incentives, and some operating costs.
We’re deploying this Fund to:
- Pilot our integrated combination of capital, mentoring, quality jobs tools, and incentives with our own borrowers;
- Scale nationally by leveraging our BusinessAdvising.org mentoring platform and partnerships with CDFIs and economic development agencies;
- Evaluate the impact to build on what works and fix what doesn’t; and
- Expand Good Jobs, Good Business to other sectors and make it available in an interactive digital form
We’ll also deploy more than $5 million in loans to small businesses to create more than 5,000 jobs with median wages of at least $17 per hour during the lifetime of the Quality Jobs Fund investment.
More Quality Jobs Resources
Here are some of the most important Quality Jobs resources for impact investors that our team has come across:
• Healthcare plans for small businesses
• High-road employment practices
• Good companies, good jobs
• Good Jobs Institute
• Smart growth for working families
• MIT Living Wage Calculator
• Aspen Institute Cost of Turnover Tool
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