GUEST BLOGGER: Carla Javits, President and CEO, Roberts Enterprise Development Fund
Last week I wrote about the War on Poverty, my father’s legacy in that fight, and its outcomes. Now let’s look forward and address what I think is at the heart of this issue to bring about lasting change and prosperity – jobs.
While tax incentives and income transfer programs can help, people across the political spectrum agree that government transfer programs alone will not and cannot eliminate poverty – especially for working age adults and their children.
Jobs are central. The unfinished business of the war on poverty is bringing more people into the workforce and positioning them for advancement. Perhaps it seems obvious, but just to put a fine point on it – the poverty rate for full-time workers is just 3 percent, and for those not working, it is 33 percent.
On this 50th anniversary of the launch of the War on Poverty, the policy prescriptions that I’ve heard so far both from politically liberal and conservative commentators seem stale with little focus on job growth, and access to jobs for those who have been left out.
We know that the pressures of globalization and technology have been in lockstep with political gridlock making it harder to create jobs and increase wages in the US. The result has been an hourglass economy with high paid jobs for the technologically savvy and highly educated, low paid jobs in service occupations, and fewer jobs in the middle. Employment discrimination also continues to factor in to disproportionately high rates of unemployment particularly among young men of color.
But in the context of our values as Americans we acclaim the importance of work, and expect people to pull themselves up by their bootstraps. Most of us would like to see jobs and work as the primary safety net, with programs and entitlements in place for those who are really unable to work. Opposition to government supports is often fueled by suspicions that they offer a disincentive to work.
Private sector innovation. The current debate about how to address poverty seems to give short shrift to job creation, and ignores almost completely the innovation occurring in the private sector – the engine of jobs – which is increasingly motivated by pressure from employees and consumers to mobilize core resources to address community problems. The private sector is doing that with a focus on job creation and entrepreneurship, including development of social enterprises and other businesses that intentionally open their doors to people who have struggled to get or keep jobs in the past, impact investing to spur business and job growth, and a resurgence of interest and reform in work-oriented technical education programs; not to mention significant investments in small businesses and workforce development by Bank of America and JP Morgan Chase, to mention just two institutions.
Job creation. So how can we make jobs the go-to safety net? Well, first we need more jobs – unemployment is just too high right now. An initiative focused on job creation for low wage workers is making the case. Here you can listen to Al Fuller, CEO of Integrated Packaging Corporation, making the case for what he’s done to create good jobs as an entrepreneur who grew up in the inner city. He is only one of the businesses that participate in an initiative showing that, “Companies can provide great jobs and strengthen their business. The Hitachi Foundation has been garnering proof of this by looking at firms across the country that do just that.”
Good jobs. Once people are working – particularly full time — their wages and benefits must allow them to purchase the essentials of life, and move out of poverty. This is an issue the business community as corporate citizen must grapple with. Many successful companies make the business case that profits and efficiency increases when front line workers get the pay and benefits and opportunities for advancement that move people out of poverty. Others need to follow them.
Mobility. The chance for advancement, for economic mobility, is at the heart of not only a poverty-fighting strategy, but also the American Dream. Research indicates that while people in the middle of the income spectrum do have significant opportunities to move up, as do some of those born poor, almost half of those who start in the lowest percentile of income remain stuck there and a full 70% remain below the middle all of their lives.
People in deepest poverty. There continues to be little focus on people who face the most daunting challenges. About 20 million people in the US live in ‘deep poverty’, living on less than half of the poverty rate, with the majority not working at all in a given year. They face daunting problems from histories of homelessness and incarceration to addiction, mental illness and other disabilities. Taxpayers, families, communities bear enormous costs for long-term unemployment.
The work that REDF has done for 16 years to create jobs through social enterprises that hire these individuals has demonstrated definitively that most of them want to and are capable of working if given a chance.
I would challenge our elected officials, business leaders, philanthropic institutions and nonprofits to refocus on the single most important issue that impacts not only the War on Poverty, but ultimately the core of the American Dream, and our expectations for a decent society — the creation of jobs with prospects for advancement, decent wages and benefits, and the inclusion in our workforce of all people who are able to work, allowing people to fight their own battle against poverty.
What results has REDF’s had in job creation? How has private industry started to get involved? What are some of the challenges of job creation? Check back for the final chapter in this series from me.I look forward to seeing your comments below.
Since its founding in 1997 by George R. Roberts of KKR, REDF has helped thousands of people in California get jobs by providing funding, business expertise and access to networks to social enterprises—”double bottom line” businesses that create jobs in order to employ individuals facing the greatest barriers to employment.