Financial Activism For Racial Justice

Speaker 1: 00:00 As the call for racial justice grows louder across the country. There is a form of activism. The San Diego workforce partnership says is also impactful. That is financial activism, where people put financial institutions and spending habits under a microscope for deep examination to see if they aligned with their values and racial justice. Andy hall, who is the chief impact officer at San Diego workforce partnership recently wrote an article about financial activism and joins us now. Andy, welcome. Hi, thanks for having me. So first, can you paint the picture of economic inequality here in San Diego? For me, Speaker 2: 00:38 Our organization, the San Diego workforce partnership has done a lot of work over the years. Um, and especially in the last year documenting the, the wage differences, um, that businesses and employers pay, um, black employees and white employees, for example, um, white employees on average controlling for the position, um, make more money than black employees in San Diego, but that's not the only factor that explains a really significant wealth gap between black households in the United States and white households in 2016, for example, uh, black households in the U S had about $16,000 of net worth compared to $163,000 for white households. We see the financial system, it just historically, and currently as a big factor in that wealth inequality for black households and white households. Uh, for example, black homeowners have been excluded from access to home loans. Um, traditionally through practices, both by law and in practice of excluding, uh, black residents from getting home loans and buying homes and all of those things over the decades really compound and create more and more inequality. And so our article or my article was really about helping us think about our own financial habits and how that does, or in some cases doesn't line up to the values and the changes that we want to see in the world. And we're asking all of us as individuals and as organizations to think about what money we have control over and how we use that money to build a more just society. Speaker 1: 02:12 Hmm. And you point out that where we buy products and services is where wealth flows and accumulates. What are some ways we can broaden prosperity here in San Diego? Speaker 2: 02:22 Yeah, there's some real simple solutions or actions I should say. Um, and then there's some more, uh, I guess I would call them more complex, but on the real simple level where we shop, where we buy matters, while it might be really, really easy to click a button on an app and get something delivered to us in the next 24 hours, that simple action really matters for who and where wealth accumulates, if we're a little more intentional and, um, maybe look up a list that we mentioned our article of for black owned businesses or black owned restaurants or any other groups that may have been traditionally marginalized, we will, can then direct our spending power to those organizations and those business owners and those communities that have been historically left out. So on a real basic level, thinking intentionally about the products and services we buy and who provides those to us is really one small, but important step in the right direction. And then taking that a step further where what I like to call where our money rests matters too. So, um, where we bank and where we hold our checking and savings accounts really matters because banks then turn around and lend that money out to different purposes, invest in different businesses, doing different things. And in many cases, some of those banks are investing in things that may or may not align with your values Speaker 1: 03:44 In your article. You say there are two questions we should ask ourselves and organizations before essentially opening our wallets. What are those two questions? Speaker 2: 03:53 So the first is how do your investments and expenditures stack up against your values? Um, and the second is what capital can we influence today to advance towards a more just society. And so I think we covered the investments and expenditures, um, as individuals where we bank, where we eat, um, what products and services we buy and who's providing those products and services. Um, the other question is really about, um, for those in organizations that have some influence on capital think retirement plans or pension plans, or think procurement budgets, um, what can you do or what can you think about and what conversations can you have with your colleagues about how you, um, how that money moves in and through the local economy? Um, so one example from our organization is we recently added, um, different investment options into our retirement plans that are, um, environmentally and socially responsible investments or ESG investments. And that gives our employees a chance to more intentionally align some of their retirement resources, um, with funds and investment opportunities that are more likely to align with their values or at least not counter. Um, some of the things that we're working on here as an organization, Speaker 1: 05:14 One of the recommendations is to support businesses that have profit sharing with employees or are employee owned. Can you talk a bit about that? Speaker 2: 05:21 Yeah. Thank you for the question. This is a big interest and passion and growing interest of ours here at the workforce partnership and myself individually. So there's a specific type of business model where, um, the employees, um, are actually in fact also owners. So, um, they are, could be, could take the form of an employee stock ownership plan or an Aesop that has tremendous tax benefits for a business, or it could be a worker cooperative or a profit sharing model. We've come across some restaurants that are structured with profit sharing models, where at the end of the month or the quarter of the profit that the company is making is not sitting in one person or a small group of owner's pockets, but is rather distributed across to all employees. And in particular, um, when we think about the pandemic and COVID-19, and how those who, um, were wealthy are in many cases wealthier, and those who were barely getting by or have been impacted by the pandemic the most, um, these types of alternative business models that spread wealth across the employees base are really interesting to us to build a more equitable and economic, um, uh, broad base economic prosperity in our region. Speaker 2: 06:38 And so thinking about businesses that are employee owned, either in part or in whole, and, and shopping or buying or, or purchasing services from those companies, um, just ends up generating wealth for, uh, many more San Diego residents than traditional business models. Speaker 1: 06:55 And what's the difference between an economic boycott and being a financial activist. And do those two things go hand in hand. Speaker 2: 07:03 Yeah, I was before this interview, I was really thinking about that. I mean, this idea isn't, um, isn't new, um, boy Scouts have been happening for hundreds of years. In fact, I think one of the most recent, one of the earliest examples of economic activism or financial activism reaching my consciousness was reading civil disobedience by Henry Henry throw who decided not to pay taxes because he didn't like that the government of the us government was supporting slavery. And so this isn't a new idea. I think one of the biggest differences though, is that boycotting is really thinking about where not to spend your money, which I think is an important part of financial activism. But in our article, we're also talking about where to specifically direct your money and your wealth, either at the individual organizational level. And so with organizations and causes and with owners who, um, may have been traditionally locked out of these opportunities in the past. And so they're certainly related, but I would, I would take financial activism one step further than boycotting and not just be about what you don't do, but also being about what you do too. Speaker 1: 08:07 And you know, many of the things we've been talking about are what individuals can do to have an impact, but will that lead to big enough, uh, change, uh, what will force systemic change? Speaker 2: 08:17 I think one, you know, just like voting your values, your one individual vote might not be the one that tips the scales in this or that direction, but we all agree that voting still matters. And I think that's the same on the individual level that, um, you know, me deciding to shop at this restaurant or patron this restaurant and not that one is not going to by itself, you know, bend the arc of economic justice, but it is a small, tiny step in the right direction. And it's signaling that this does matter to me as a consumer. And I think if enough of us think that way, do that way, pull our resources and bank and invest that way. You know, capital markets and the financial system will eventually need to respond as more and more people are intentional with where they put their money. Speaker 1: 09:05 All right. And for more information, you can also find it@kpbs.org. I've been speaking with Andy hall, who is the chief impact officer at San Diego workforce partnership. Andy, thank you very much for joining us. Speaker 2: 09:17 Thanks for having me.