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Blog, Carla's Insights

Time for Action

Partisan warfare dominated the news in 2019, almost smothering more positive trends. As an antidote to the constant infighting in Statehouses, Board rooms, and local businesses, more and more people are stepping up to the urgent task of creating a more inclusive economy and society that rewards work.

Ironically, although economic news is good, there is also mounting evidence that the American Dream is dimming for more and more of us because the benefits of growth are not widely shared.

REDF has seen first-hand that most people have the desire and strength to work and change their lives, even after struggling with incarceration, homelessness, addiction, mental illness and the accompanying sense of hopelessness. When offered the chance to work in an environment that supports their achievement and success, incomes rise, recidivism declines, and housing stability increases. With 20 years of history, REDF has a growing body of evidence of the effectiveness of employment social enterprises (ESEs), which provide paid, transitional jobs, training, support and a pathway into the workforce for people striving for a better life.

At the same time, we continue to be frustrated by the low rewards the economy provides to many workers who are delivering valuable services and products, but who can barely afford a place to live. More than a third of working-age adults in California, for example, earn $15/hour or less, and the burden of those low wages falls disproportionally on people of color (half of Latinx and 35% of African Americans in California. Nationally, housing prices have skyrocketed 58% since 2012 alone, whereas median wages are up 21%. An ever-increasing number of people forced into homelessness should come as no surprise.

As we enter 2020, let’s use American know-how to brighten the Dream, fuel productivity, and boost our national spirit. Together we can create an economy and society that empowers people across race, gender, rural, urban, suburban, red, blue and purple state boundaries to achieve their full potential, recognize our common humanity, and lead a life of dignity and common respect.

Challenged to action by consumers, employees and constituents, some of those in positions of power and authority are redefining their roles to help realize this aim. There is enormous potential to alter the landscape. Testimony at the Future of Work Commission hearings indicated that decisions by employers and policymakers on wages and working conditions matter and have the greatest impact on the most vulnerable and disadvantaged workers, and those impacted by racial inequity.

Some encouraging action worth noting:

What has business done?

  • Inclusive Hiring. The Society of Human Resource Management (SHRM) called on businesses to take a ‘second chance hiring pledge’ and open up jobs and opportunity to people who are returning home from incarceration. They report that companies representing half of the US workforce have taken the pledge.
  • Good jobs. The National Business Roundtable redefined the Purpose of a Corporation to promote ‘An Economy That Serves All Americans’, asking companies to consider the impact of their decisions on customers, communities, et. al. These companies should aim for a North Star by creating more ‘good jobs’ internally and throughout their supply chains, with the attributes outlined by the Federal Home Loan Bank of San Francisco — which established a “Quality Jobs Fund” with a $100M investment:
    • a living wage that supports a decent standard of living; a safe workplace; a benefits package, including health insurance, paid time off and retirement plan; access to training and professional development; potential for upward mobility and wealth-building; and dignity, respect, and agency (and we’d add – open the doors to people coming home from incarceration).

What has government done?

  • California prioritizes economic equity.
    • California significantly expanded the earned income tax credit program (EITC) to boost incomes of low wage workers, and is now exploring how to leverage technology so the credit is received monthly making it easier to pay bills.
    • While most people are eager to find a job when they return home from jail or prison, their effort to become self-supporting is stymied by a host of fees and fines that most are unable to earn enough to repay, preventing them from getting good credit, renting a place to live, or netting enough to support their families. San Francisco took the lead in abolishing these fines and fees, and California is considering the same thing.
    • Governor Newsom established a Future of Work Commission (I was appointed to it) to ‘develop a new social compact for California workers, based on an expansive vision for economic equity…’
    • California is on a path to raise the minimum wage, which increased in January, to $12/hour for companies with fewer than 26 employees, and $13/hour for companies with more (and to $15/hour for all companies as of January 2023).
    • California passed AB 5 which will have the effect of defining more workers as employees rather than contractors (think Uber) which could result potentially in higher wages/benefits.
  • US House of Representatives says tips are not wages. As a legacy of the period after slavery when employers secured the right to substitute tipping for wages for former slaves, federal policy has permitted the restaurant industry to sets the minimum wage at $2.13/hour – although several states, like California – have raised it. The House just passed legislation that would create a pathway to a national minimum wage of $15/hour by 2025 and would eliminate the lower ‘tipped’ wage.

Employment social enterprises (ESEs) on the rise. With homelessness rates rising for formerly employed individuals over age 50, and more people coming home from prison thanks to widespread advocacy including passage of the First Step Act, jobs and economic mobility are even more essential to decrease recidivism and reduce homelessness.

  • Regional solution. Los Angeles boldly invested in jobs and economic opportunity for people who have been homeless, including many who had also been incarcerated, through the Los Angeles Regional Initiative for Social Enterprise (LA:RISE), investing millions of dollars in a partnership between social enterprises, the workforce system, and competitive businesses that has employed 3,200 people and counting.
  • ESE: a solution that works. Since 1997, more than 40,000 people have gotten jobs, earned over $860M in wages, and received support, and training in the 200+ ESEs in 30 states that REDF directly advised and invested in. 70% of them had experienced incarceration, more than half had been homeless or unstably housed, and almost 40% were young adults out of school and work. Our next five-year strategy calls for a bold plan to accelerate growth in the coming years so that jobs, training and support are readily available to those who need them most.

Regardless of partisan struggles, Americans’ shared values include our belief in the importance of work and in the possibility of redemption. Demonstrating these values means restoring a sense of compassion for and identity with one another, and providing everyone jobs, pay, working conditions and benefits that allow for a decent quality of life.

By stepping up to meet the imperative that all people in our country across race, gender, ability, geography, and background should have the tools and opportunities they need to work and to thrive, those in a position to influence the conditions that have broken the social contract can restore it. It’s time for everyone to get on board. Onward.

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