Private Capital, Public Policy Can Help Close The Racial Wealth Gap

The president of the Ford Foundation called for a national mobilization of private capital and public policy to invest in underserved communities and help close the racial wealth gap.

During today’s portion of the American Council of Life Insurers annual convention, Darren Walker proposed what he called “a Marshall Plan” for making a difference through private capital for public good.

“We need a Marshall Plan for investing in climate solutions, housing that is primarily for middle-class and working Americans, investing in systems of infrastructure that we hope will be buoyed by new investments and investing in the infrastructure of democracy,” he said. “Our country will be a better country if private capital is invested in these ends, and private capital will see a good return on their investment.”

Looking at diversity in corporate America, Walker said that an organization is more likely to have diverse leaders when it has a diverse board.

“If you believe that your organization will be more successful if it is diverse, then this ought not to be difficult to internalize into your own practice,” he said. “The problem and challenge is that there are people who don’t believe in diversity or believe that diversity is about lowering standards. I believe diversity is about achieving excellence. Organizations that are diverse are more likely to be excellent. It’s not about PC [political correctness], it’s about ROI [return on investment]. Bottom line – we know diversity works.”

Although financial education has been touted as one way for lower-income Americans to improve their economic situations, Walker said, “There is not enough financial education in the world to make up for the fact that average American worker has lost economic ground.”

“All working-class, middle-income workers lost ground over the last three decades. Programs for financial education won’t work when people can’t save enough money for a house, for retirement.”

Walker called for developing a system in which “the middle class is solid and we can grow a Black, brown and white middle class as well.”

“We must be sensitive to the fact that a lot of white people also feel they are being left out by the system these days. They worked hard and played by the rules and they aren’t being rewarded either.”

Equal Talent, Unequal Opportunity

Talent is created equally but opportunity is not, said Thasunda Brown Duckett, TIAA president and CEO. What should corporate America do about it? She had some suggestions for expanding the talent pipeline.

• Collect and analyze data. Look at your organization’s representation – Black, Latino, women and other underrepresented groups. Which sectors are not represented?
• Find ways to change the process. Does your hiring process knock potential talent out of the running before you even have an opportunity to engage with them? For example, many women step out of the workforce for several years to raise their children. If you require 20 years of experience for a particular position, you risk eliminating many women as prospects for that job.
• Be intentional about tracking outcomes. Effort is not good enough, she said, and a pledge is just a step.

Duckett said that closing the racial wealth gap is not just good for Black and brown Americans but for everyone.

“It is good for all of us to have a more equitable and just society in our country,” she said.

Susan Rupe is managing editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at Susan.Rupe@innfeedback.com. Follow her on Twitter @INNsusan.

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