Unless you’ve been living under a rock, you’ve noticed that the issue of race has come to the forefront in the U.S. in recent days. According to Angela Glover Blackwell, race is also a subject that should be considered by the investment community.
Glover Blackwell, the CEO and founder of PolicyLink, a non-profit research organization that has the aim of creating stronger low-income communities and communities of color, says racial equity has become an economic imperative.
Photo Caption: Angela Glover Blackwell, Founder and Chief Executive Officer of the non-profit PolicyLink
Photo Source: PolicyLink
According to Glover Blackwell, who also serves as an expert advisor for Investing in What Works for America’s Communities, a joint book and web project of the Federal Reserve Bank of San Francisco and the Low Income Investment Fund (LIIF), for a long time, those individuals working to eliminate poverty and racism made their case in moral terms, that is that America must deliver on the promise of equal opportunity and shared prosperity because it is the right thing to do; however, she contends that a demographic transformation more rapid and widespread than anyone predicted has changed the conversation.
Glover Blackwell notes that before the middle of this century, people of color will become the majority of the population. The workforce will diversify even faster than the overall population as the baby boomer generation enters retirement. Already, most babies born in the U.S. are children of color.
Further, Glover Blackwell contends that diversity can be one of this country’s greatest strengths in the global economy if the U.S nourishes, taps, and builds on the talents and skills of all of its people.
Glover Blackwell this week shared her thoughts on how the investment community can address this situation.
Q:) How can the investment community act to make a difference on this front?
A:) The private sector is quickly catching on to the bottom-line benefits of diversity and inclusion. Research and experience prove that diversity drives innovation. America’s fast-growing communities of color are wellsprings for the new ideas and products that will drive our economy forward. Studies show that companies with more diverse workforces have higher revenues, more customers, higher returns on equity and assets, and larger market share. The investment community has a tremendous role to play to ensure that these opportunities are backed by the needed capital to come to fruition. And investors are already getting on board in some important ways through innovative public-private partnerships that create shared value for both the public and private sides.
A great example is Ullico, a labor-owned insurance and investment company that has started a new multi-million dollar fund to invest in infrastructure projects that meet strong standards in creating good-paying construction and permanent jobs while building essential community infrastructure. Their investment strategy combines long-term local partnerships with competitive and attractive returns for their investors. To date, they have invested in a water and wastewater infrastructure project in California and a wind farm in Hawaii.
“Fresh food financing” public/private partnerships established in more than a dozen states provide another example of how investors can advance equity and growth together. The flagship Pennsylvania Fresh Food Financing Initiative is a public-private partnership that provides start-up funding in the form of one-time loans and grants to help retailers open or improve food retail stores in underserved low- and moderate-income communities. The program has impressive results: 88 new or renovated stores in urban, rural, and small-town Pennsylvania, and more than 5,000 jobs created or retained. Fifteen other states have taken steps to set up similar public-private partnerships, and these state innovations inspired the national Healthy Food Financing Initiative.
As these initiatives mature, we are learning that one of the keys to their success is authentic community engagement. Residents and community leaders play critical roles in developing successful, investment-worthy businesses in distressed communities by contributing their wisdom, experience, and innovative ideas.
Q:) What are some specific equity-driven policies and investments that could serve to implement change?
A:) To achieve equity the nation must grow good jobs, build the capabilities needed for the 21st century economy, remove barriers to participation, and create communities of opportunity.
We need to rebuild the nation’s infrastructure, and with the right policies in place, these investments can create millions of good jobs for the people who need them the most. Many communities have created “community workforce agreements” to ensure this happens.
Portland, Oregon’s home energy retrofitting program, for example, requires that local residents perform at least 80 percent of the work on the project, and that 30 percent of the work goes to historically disadvantaged and low-income residents. So far, people of color have performed almost half of all the work. The federal government should implement a similar program that creates pathways for vulnerable workers to access careers in infrastructure construction.
To build the capabilities of our workforce, we need to strengthen our nation’s community colleges, which are the pathway to four-year college and careers for many low-income students, students of color, and first-generation college-goers.
We need to enforce fair housing laws to ensure that people of color can live in opportunity-rich communities. And, we need to build upon the Obama Administration’s place-based programs to create communities of opportunity across the country.