How to Make Wealth Building and Job Opportunities More Equitable
Growing evidence of wealth and income concentration in the United States is undeniable, with African Americans and Latinos now holding average household assets of only about 10 to 20 percent of the average white households. All across the nation, decent pay—a living wage—is increasingly hard to find; many working-age adults have simply given up trying to secure employment. According to Forbes, the US labor participation rate has declined since reaching a high of 67 percent in 2000. It now hovers at just below 63 percent as more and more people have left the workforce.
As a result of the emerging worldwide investment push towards new, technological forms of production, CNN and TechRepublic report that nearly 40 percent of current US jobs are at risk of being replaced by technology over the coming years. Automation without strategic intervention will increase the skills gap and the wage gap, and increase economic inequality.
The national impulse to address such sagging employment would involve substantially increased public spending and job creation to inspire renewed growth and income distribution. Currently, there is no serious national strategy in development along those lines to mitigate the impending negative impacts of massive job loss.
The same is true regarding the matter of closing the racial wealth and income gap in America, which experts predict is likely to widen further if no affirmative steps are taken in response. For over a decade, national economic justice organizations like the Insight Center for Community Economic Development and the Center for Global Policy Solutions have raised a red flag of concern when it comes to facing the realities of our growing racial economic divide. Such disparities are anathema to our long-term national economic and social success. Yet there are important alternative economic and social investment models emerging that properly supported by new public policy and investment could help us greatly going forward.
One compelling concept has been advanced by William “Sandy” Darity, Jr. of Duke University and Darrick Hamilton of the Ohio State University. Their idea of a national Baby Bonds program would offer a universal federal investment that all American children would qualify for at birth, based on their family’s income. While children born to already well-off households would receive very nominal amounts—maybe $500—especially poor children would receive up to $50,000 in assets by age 18, after which they could use those funds for approved education and training expenses, a first-time home purchase, a new business, or retirement savings. The economic-opportunity and dollar-circulation impacts of this approach would be robust and transformative.
We also need to advance new social enterprise models that, with added policy and financing support, could both employ many millions more of our people, while also addressing vital human needs. Such efforts, including both for-profit innovations like B-Corporations as well as nonprofit social ventures and worker-owned enterprises, are showing great success in areas ranging from sustainable housing development to home health care and from organics to recycling. In the home care space, for example—one of the nation’s fastest growing employment sectors—Cooperative Home Care Associates(CHCA), a New York-based B-Corporation and worker cooperative, trains and employs nearly 2,500 mostly female senior care providers and generates about $60 million in annual revenues. CHCA, which engages workers who typically come from challenged social, educational, and professional backgrounds, pays a living wage of about $17 per hour and offers generous benefits and union representation. As a result, it achieves a significantly lower rate of worker turnover than industry competitors. Along the way, it helps build worker skills and assets in individuals who are otherwise unlikely to realize such success in today’s labor market.
Similarly, the burgeoning recycling industry has produced comparable examples of successful social enterprise and worker ownership that could help address growing threats to our future employment base. Recology is a San Francisco-based waste management company that is 100 percent employee-owned. It employs about 3,000 workers across a large swath of the Western US on annual revenues of nearly $1 billion, with much of its positive reach extending to small rural cities and towns. Recology’s innovative sorting technologies are revolutionizing the waste management industry and helping to identify effective new ways to combat the reality that America has a long way to go to address its mounting material waste. Still today, for example, only 10 percent of US plastic products enter the recycling stream during any given year (compared to significantly higher levels in key European and Asian nations).
Helping innovators like CHCA and Recology to scale in ways that extend their benefits more broadly should be a national priority. Social enterprises like CHCA and Recology typically support grassroots economic development, local employment sourcing, and regional procurement. As such, they tend to help develop and keep capital in their communities for more widespread community benefit and prosperity sharing. Credible and proven support organizations for this expanding field of economic endeavor, like the Roberts Enterprise Development Fund and the Boston Impact Initiative, are showing us the way towards the kinds of policies, practices, and possibilities that would help correct our current course.
Finally, we should redouble our investments in state of the art employment training programs involving key partners in industry, higher educational institutions, and anchor nonprofit intermediary organizations, like the National Urban League and their local networks, that help to connect displaced and traditionally hard-to-employ workers with meaningful private sector employment. Too often, past efforts in this direction have built on preparing workers for jobs that are either waning or stagnant with respect to their growth and trajectory. Going forward, we need to place more bets on training workers for the jobs of tomorrow and beyond. One of the leading models for this kind of approach is being advanced through the California Community Colleges System-supported Doing What Matters for Jobs and the Economy Initiative—an important recent effort to connect and align California’s leading workforce development stakeholders around more shared information, strategies, and investments designed to augment skilled employee placements in key growth sectors.
The United States needs a decidedly new and different wealth building and employment development approaches to address the realities of our evolving economy and society. To contend with the emerging new realities of our times and to avoid the worst of what could come by doing nothing, we need to act with a level of dispatch and proactivity we are simply not seeing these days from our elected or business leaders. We can and we must do much better.
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