Speaker 1: Progress toward equity for Black Americans has been shaky, and
Speaker 1: after decades of a widening wealth gap, the pandemic led
Speaker 1: to mass closures of black owned businesses. Black women were
Speaker 1: disproportionately impacted, and the unemployment rate for Black Americans took
Speaker 1: much longer to recover than that of white Americans. And
Speaker 1: in the wake of George Floyd's murder, as the US
Speaker 1: began recognizing June tenth as a federal holiday, the forces
Speaker 1: pushing for equality grew louder. Banks, money managers, and their
Speaker 1: clients throughout Corporate America looked to start playing a greater
Speaker 1: role in closing deep disparities related to race, promising to
Speaker 1: hire more Black Americans, Hey, more equal wages and expand opportunities.
Speaker 1: Now two years later, how have they done Over the
Speaker 1: next hour, We'll try to answer that question in this
Speaker 1: Bloomberg Equality special Achieving Black Equity m Shali Bassk. Progress
Speaker 1: toward the goal of racial equity has been choppy at best.
Speaker 1: Most data disclosed from large firms across Corporate America and
Speaker 1: the Federal Reserve are from until that year. Federal Reserve
Speaker 1: data show the disparity between black and white Americans only
Speaker 1: deepened in terms of household net worth. For John Rogers,
Speaker 1: the founder of Aerial Investments who's on the board of
Speaker 1: major fortune companies, the challenge ahead is important to soak in.
Speaker 1: While things have started to change in corporate America, the
Speaker 1: progress is now widely seen is terribly slow. The data
Speaker 1: is crystal clear things are getting worse. When it comes
Speaker 1: to the black wealth gap. SAR from the Federal Reserve St.
Speaker 1: Louis has data the shows between twenties sixteen, college DK
Speaker 1: black saw the wealth declined ten percent. In college dcated
Speaker 1: white saw the wealth of increase over nine percent. This
Speaker 1: idea that things are getting better, I just think it's
Speaker 1: so important to pound home that it really is not
Speaker 1: getting better. I think that these companies are more committed,
Speaker 1: but we've got to remind them that they've got to
Speaker 1: do more than just the token, small efforts. They've got
Speaker 1: to have more of a systematic understanding of how to
Speaker 1: create true diversity and true wealth minority communities. We get
Speaker 1: a few little bright spot we need to do much more.
Speaker 1: John Rogers points out that from most large firms, their
Speaker 1: staff don't look like the communities they serve. Charles Phillips,
Speaker 1: the co chair of the Black Economic Alliance explains part
Speaker 1: of the problem. Building wealth is something the black community
Speaker 1: has been struggling with for decades, and average household now
Speaker 1: is about ten percent of the white household, so that's
Speaker 1: obviously kind of the definition of the problem. A lot
Speaker 1: of that comes down to home ownership, the fact that
Speaker 1: mortgages weren't as available and comes with as high redlining,
Speaker 1: lots of issues. So the home ownership issue is around
Speaker 1: for black people about seventy one percent for the nation,
Speaker 1: and so closing that gap is at leads one path
Speaker 1: to increasing black wealth, but there are other issues as well.
Speaker 1: Phillips was former president at Oracle who left and ran
Speaker 1: Software Giant in for He's been working with firms across
Speaker 1: Corporate America to hire or promote one million Black Americans
Speaker 1: in the next ten years. Last year, the initiative called
Speaker 1: one ten helps elevate twenty five thousand people, while that
Speaker 1: group has placed thousands more this year and Corporate America
Speaker 1: has wrapped up promises on hiring more less than one
Speaker 1: fifth of fortune five hundred companies have joined the effort.
Speaker 1: The issues are matching the location, the job, skill, the
Speaker 1: type of job that the company needs, with the type
Speaker 1: of people being trained, and that's there's always a disconnect.
Speaker 1: Someone needs to tend people in sales and Detroit. What
Speaker 1: were just trained with someone in I t in Atlanta.
Speaker 1: Getting that matching done correctly in one challenge and two
Speaker 1: would need more people participating. And I think the thirty
Speaker 1: issue is people are used to hiring the way they hire.
Speaker 1: A lot of people who in charge of h R
Speaker 1: They have their ten colleges they recruit from and specific
Speaker 1: ways that they are used to their systems working, and
Speaker 1: sometimes it's hard to get them to change as well.
Speaker 1: So I would say people are more open to it
Speaker 1: than they were more open to hiring for skill the
Speaker 1: versus degrees, which is important, but it's a slow, slow
Speaker 1: burned to you like to get there for them. Charles
Speaker 1: Phillips now runs a company called Reform. He's one of
Speaker 1: many black entrepreneurs who struck out on their own while
Speaker 1: also staying in touch with big business. He currently serves
Speaker 1: on the boards of American Express and Viacom. Zanilia Harris
Speaker 1: has also started her own firm after years at large
Speaker 1: companies like Merrill Lynch and Nasdak. Now she helps women
Speaker 1: across the country build wealth. She says closing the racial
Speaker 1: income gap for black women would be transformative and bring
Speaker 1: real generational change. The women that I work with, they
Speaker 1: want to create wealth for themselves so that they are
Speaker 1: able to live the life that they want, They're able
Speaker 1: to support their family, they are able to leave something
Speaker 1: to that next generation. And I'm also hearing how they
Speaker 1: are still fighting to be seen and heard in organizations
Speaker 1: that they work in. So this is not just a
Speaker 1: black woman thing. The barriers to creating wealth over generations
Speaker 1: is something that can't be overstated. John Rogers says it's
Speaker 1: kept Black Americans back for decades, spanning back to sixteen
Speaker 1: nineteen and the inception of American slavery. Lack of wealth
Speaker 1: that's been created going back in the sixteen nineteen project
Speaker 1: talked about the challenges we faced and faced creating wealth
Speaker 1: in this country through historic domination and segregation and the like.
Speaker 1: It's hard to build businesses if we don't have capital,
Speaker 1: you know, we don't have multigenerational wealth to help with
Speaker 1: start businesses. So that's a big problem because minority owned
Speaker 1: businesses higher minority people and create wealth, minority communities and
Speaker 1: create philanthropy, and minority communities and political empowerment in minority communities.
Speaker 1: So that's kind of a big deal, that lack of
Speaker 1: multigenerational wealth. I think it's something you can't be understated,
Speaker 1: but it has been understated for a long time. Issues
Speaker 1: like this started cropping up more and more after the
Speaker 1: murder of George floyd In and more conversations about race
Speaker 1: started taking place in corporate America. A handful of US
Speaker 1: companies gave staff the option to observe Juneteenth, and the
Speaker 1: following year it was named to federal holiday. More than
Speaker 1: a hundred fifty years after the Emancipation Proclamation was signed,
Speaker 1: This year is the first time the market is closed
Speaker 1: in observance now. Zanalia Harris says there's still more to
Speaker 1: do for corporate America to embrace the changes truly needed
Speaker 1: as racial tensions continue to swell across much of the country.
Speaker 1: Even though it being recognized as a holiday, I don't
Speaker 1: think that involves the underlying issues with where we are
Speaker 1: in America when it comes to race equality. I heard
Speaker 1: a lot of promises, and I was skeptical about whether
Speaker 1: or not those promises will be fulfilled. And then I
Speaker 1: think about my daughter and the future and what I
Speaker 1: am releasing her too, and I'm sad because I never
Speaker 1: thought that we would be here with race relations. I
Speaker 1: have a lot of feelings about all of this, and
Speaker 1: I'm trying to remain positive and hopeful. But as I
Speaker 1: read the news, I become less and less hopeful that
Speaker 1: things will change. And there's new data now to support
Speaker 1: that concern. A paper circulated by the National Bureau of
Speaker 1: Economic Research this month says the gap between black and
Speaker 1: white wealth is on track to widen even further. Coming up,
Speaker 1: how Wall Street is looking to close steep gaps in
Speaker 1: funding for black owned businesses and entrepreneurs. That's straight ahead
Speaker 1: on this Bloomberger Quality Special Achieving Black Equity. I'm Shinali Basik,
Speaker 1: and this is Bloomberg. This is a Bloomberg Equality Special
Speaker 1: Achieving Black Equity. I'm Shinali Basik. Despite fits and starts
Speaker 1: on corporate efforts to close the racial wealth gap, the
Speaker 1: difference in prosperity between black families and white families in
Speaker 1: America is stark. According to data from the Federal Reserve
Speaker 1: Bank of St. Louis, a typical black family had about
Speaker 1: twelve cents on the dollar when compared with their white counterparts.
Speaker 1: That gives a white family more than eight times the
Speaker 1: wealth of a black family, and that gap has been
Speaker 1: unchanged for decades. Equal hiring practices, equal pay, and access
Speaker 1: to capital for housing are all hurdles and building wealth.
Speaker 1: But another is access to capital to start a business.
Speaker 1: According to a study by Accenture, only twenty nine percent
Speaker 1: of loans sought by black small businesses are approved by
Speaker 1: large banks, and that years twice as high for white
Speaker 1: small business owners. Ryan Williams is an entrepreneur. He graduated
Speaker 1: from Harvard, worked at Golden Sacks and private equity giant Blackstone.
Speaker 1: Williams started his real estate investment company in and hit
Speaker 1: many roadblocks along the way. He had loans turned down
Speaker 1: by several banks when starting his firm. That hasn't changed
Speaker 1: that much. So, you know, it's still really difficult here,
Speaker 1: you know, a minority generally, because there's still a pattern
Speaker 1: recognition issue. There's still sort of a cookie cutter mall
Speaker 1: for what you know, a successful manager, special investor looks
Speaker 1: like most of our our large institutional investors universe. And
Speaker 1: so I think that you know, in the margins, there's
Speaker 1: more opportunities and there are more black entrepreneurs getting funded
Speaker 1: black managers getting funded, women lead and owned managers getting funded.
Speaker 1: But it's still very incremental, and I think that's because
Speaker 1: people still are fundamentally focused on the kind of blueprint
Speaker 1: success looking very homogeneous, like frankly white male as the archetype.
Speaker 1: And I don't think that's changed. Is it frustrating? Yeah?
Speaker 1: Oh yeah. Look, I'm I am incredibly privileged in seeing
Speaker 1: those you know, founders and CEOs of Realist to investor
Speaker 1: management platform, especially black founders and CEOs. I know, I'm
Speaker 1: you know, at the one percent of the one person
Speaker 1: in terms of capital I've been able to raise, and
Speaker 1: I take a lot of pride in the returns we've
Speaker 1: been able to deliver to the investors that have entrusted
Speaker 1: their capital with me. But I get turned down probably
Speaker 1: nine five percent at the time. Ultimately, Ryan Williams was
Speaker 1: able to start his firm with the help of a
Speaker 1: black owned bank. While the number of black owned lenders
Speaker 1: has declined drastically over the past few decades, they play
Speaker 1: a huge role in black communities. This year's City Group
Speaker 1: created a new team in order to work more closely
Speaker 1: with minority owned banks and broker dealers. Harold Butler was
Speaker 1: tapped at City Group to lead that effort after years
Speaker 1: of working with the U. S. Treasury depart and while
Speaker 1: at the bank, it was a role in which he
Speaker 1: also helps City work with black owned banks. Fundamentally, it's
Speaker 1: all about access to the capital itself. So being able
Speaker 1: to help banks, for example, create business, to grow their
Speaker 1: business and to have the capital to lend is key.
Speaker 1: But what's different about say a Mechanic and Farmers Bank
Speaker 1: in Durham, North Carolina, in a city, other than the
Speaker 1: fact that they're a small, community based financial institution and
Speaker 1: cities a large global bank. The difference really is in
Speaker 1: the power of the neighborhood. That CEO knows his neighborhood right,
Speaker 1: he knows those budding entrepreneurs, and he's willing as a
Speaker 1: practical matter to take the risk in those firms of
Speaker 1: those budding entrepreneurs and black founders what have you, and
Speaker 1: helped them to see the possibilities of their dreams. While
Speaker 1: black owned banks are important, there's still a huge scarcity
Speaker 1: of funds flowing from the biggest firms to black entrepreneurs. Cadre,
Speaker 1: led by Ryan Williams, stock a partnership with black Rock
Speaker 1: in order to invest in affordable housing. Black Rock is
Speaker 1: the largest money manager in the world. William said he
Speaker 1: would like to see more big firms step up to
Speaker 1: the plate in this way. I think that there have
Speaker 1: to be more of these kinds of partnerships between, you know,
Speaker 1: within the institutional investing ecosystem, where people take the same
Speaker 1: level of creativity and imagination they take to business problems
Speaker 1: and apply it to the underrepresentation problem that we're seeing,
Speaker 1: and that community is encouraging and positive. Is unfortunate that
Speaker 1: Black Rocks probably the exception, not the norm, when you
Speaker 1: look at all the companies that put out statements and
Speaker 1: you know, said we're going to be spending time on
Speaker 1: UH an effort and resources on actually trying to help
Speaker 1: reduce the wealth gap. And similar to Black Rock, Wall
Speaker 1: Street is putting top analysts to work on the numbers
Speaker 1: and how to put more money to work in black communities.
Speaker 1: Goldman Sachs last year created a program to get ten
Speaker 1: billion dollars worth of capital to firms run by black women.
Speaker 1: Megan Hogan heads up Diverse the equity and inclusion efforts
Speaker 1: at the firm. One of the fastest ways to accelerate
Speaker 1: change and effectively address the racial wealth gap in the
Speaker 1: United States is to listen to and invest in black women.
Speaker 1: The research at a high level, you know, found that
Speaker 1: reducing the earnings gap for black women has the potential
Speaker 1: to create up to one point seven million US jobs
Speaker 1: and increase the annual US GDP by anywhere between three
Speaker 1: hundred and four hundred and fifty billion, So huge impact there.
Speaker 1: We're about a year into this. Since launching in March,
Speaker 1: we've made about one billion dollars of investments to our
Speaker 1: seven key pillars. It's part of our long term strategy
Speaker 1: and I would highlight, you know, two recent investments that
Speaker 1: we made are the MAMI and the Care Academy. MAMI
Speaker 1: is expected to impact about twelve thousand Black women across
Speaker 1: the country um and Care Academy is expected to impact
Speaker 1: about fifty thousand Black women. So again, we're very focused
Speaker 1: on quantifying our impact um in our commitment. While Black
Speaker 1: Americans have found it hard to raise capital and rise
Speaker 1: in corporate America, black women have found it particularly hard,
Speaker 1: and the numbers show it. Black founders represented a mere
Speaker 1: one percent of venture capital funding in according to Accenture,
Speaker 1: and Crunch based data show that percentage has barely moved.
Speaker 1: Goldman Sachs calculates that black female founders account for less
Speaker 1: than one third of that ratio. They claim point three
Speaker 1: percent of all venture capital funding, and that funding is
Speaker 1: key for growth when you're talking about a demographic that's
Speaker 1: often marginalized by corporate America. Zanilia Harris is the founder
Speaker 1: of Harris and Harris Wealth Management. I think when Black
Speaker 1: women decide to go out on their own um it's
Speaker 1: because of the fact that they feel that there's not
Speaker 1: opportunity for growth. I had always wanted to be on
Speaker 1: my own because I felt like owning a business would
Speaker 1: be another way to grow wealth in my family, and
Speaker 1: I also wanted to leave a legacy for the children
Speaker 1: that I would have that they could build upon. But
Speaker 1: the more and more I read about the history of
Speaker 1: African American growing wealth in America, I learned that while
Speaker 1: there have always been people African Americans who wanted to
Speaker 1: leave a legacy, whether that's building a business, to move
Speaker 1: up in or get opportunities in corporate Americas, because at
Speaker 1: one point we didn't even have the opportunity, and we
Speaker 1: were relegated to only being able to build in our
Speaker 1: own communities and to service only our own communities, and
Speaker 1: that's why leaders like Goldman's Megan Hogan are looking to
Speaker 1: specific programs to fund startups by black women, and other
Speaker 1: firms are doing the same. One million black women, you know,
Speaker 1: very important to me personally, you know, it was. It
Speaker 1: was a highly emotional day when we announced it to
Speaker 1: the firm and had a firm white town hall to
Speaker 1: talk about the potential impact of the program. UM. I
Speaker 1: was raised by a sen a mom who worked too
Speaker 1: full time jobs to get me through school and through college. UM.
Speaker 1: And I'm not a huge fan of the black woman
Speaker 1: as martyr kind of a troupe, which is black women
Speaker 1: are martyrs. Black women hold us up. I think we
Speaker 1: need to be flipping things on things on its head,
Speaker 1: which is that we're supporting black women in these roles.
Speaker 1: We're making sure that they have the best maternal healthcare,
Speaker 1: they have better child m care programs, you know, for
Speaker 1: for working moms. UM, they're getting the best of the
Speaker 1: education system and workforce advancement. And through our Black Women
Speaker 1: Onyx research, we just found society failing across a number
Speaker 1: of issues coming up. How hiring practices at the largest
Speaker 1: firms can start to move the needle on income and opportunity.
Speaker 1: That's up next on this Bloomberg Equality Special Achieving Black Equity.
Speaker 1: Shinani Bassek, This is Bloomberg. This is a Bloomberger Quality
Speaker 1: Special Achieving Black Equity. M. Shinnali Bask. The difference in
Speaker 1: prosperity between black and white families in America remains stark.
Speaker 1: For Black Americans to build wealth, incomes also need to rise.
Speaker 1: That means corporate America needs to play a part and
Speaker 1: hiring more equitably while also promoting black managers. One area
Speaker 1: where there's some progress is data on hiring practices. Now
Speaker 1: about of the most prominent companies across the country That
Speaker 1: means firms with at least a hundred workers are making
Speaker 1: employment data public. In the immediate aftermath of George Floyd's
Speaker 1: murder two years ago, the percentage of black managers rose
Speaker 1: marginally by a median of zero point four percentage point,
Speaker 1: while the share of black employees overall also rose slightly.
Speaker 1: The disclosures help keep Corporate America accountable. For example, it
Speaker 1: showed that at Walmart, the largest US employer manage been,
Speaker 1: promotions for Black Americans actually slipped in the twelve months
Speaker 1: through January, Yet more workers moved out of hourly jobs
Speaker 1: into management roles, which means the largest challenges are still
Speaker 1: as employees move up the corporate ladder. Over At Apple,
Speaker 1: the largest company by market value, black representation had declined
Speaker 1: between eight and the company says it's committed to doing more,
Speaker 1: but the numbers will tell us if that promise comes true.
Speaker 1: There appears to be friction at every level. Charles Phillips,
Speaker 1: who works with leaders across corporate America to help recruit
Speaker 1: black workers, says only seventy two of Fortune five hundred
Speaker 1: firms have signed on to work with his organization one ten.
Speaker 1: It should be more, and we're still recruiting mode. So
Speaker 1: I have to call feels all the time that to recruit,
Speaker 1: to selldom on this. So the intry reaction is, well,
Speaker 1: I don't think we have the type of jobs that
Speaker 1: you know where we could really hide these folks because
Speaker 1: we need advanced degrees. In some cases that's no longer
Speaker 1: two that you should be had for it was not
Speaker 1: degrees and rethinking those jobs. So we have to convince
Speaker 1: some at least go back and look at the types
Speaker 1: of jobs to do they really need a college degree.
Speaker 1: And then secondly, the same issue of you know, we'll
Speaker 1: have process and in place, h our people in place,
Speaker 1: and they have been filling the docks pretty well, and
Speaker 1: so I just leave it to them. The good news
Speaker 1: is because of the shortage of talent right now, they're
Speaker 1: starting to reconsider that because they need people. So the
Speaker 1: best thing that happened is what we have right now
Speaker 1: where it's the tight job market where people there's not
Speaker 1: enough employees, and so that forces CEO is to consider
Speaker 1: new pools of talent that they really didn't really, you know,
Speaker 1: to pay much attention to before. Charles Phillips says one
Speaker 1: key way that corporations can boost their ranks is through
Speaker 1: hiring from historically black colleges and universities. A range of
Speaker 1: banks and investment managers have started doing that. Goldman Sachs,
Speaker 1: for example, is dedicating twenty five million dollars over five
Speaker 1: years to HBCUs Well. Senior leaders are spending time training students.
Speaker 1: Goldman's Megan Hogan says it's shift from a longstanding tradition
Speaker 1: of hiring from the ivy leagues. When you think about
Speaker 1: a traditional recruitment model, it is using the alumni base
Speaker 1: of your current employees to find talent. So you know,
Speaker 1: for example, you know I went to Yale University. Personally,
Speaker 1: I know the school well. If I was asked to
Speaker 1: help with hiring, I would want to go back to
Speaker 1: my almal mater potentially. UM, that's not a bad thing,
Speaker 1: you know, I think you know has great students. But
Speaker 1: if you're looking at your current employee base and only
Speaker 1: having them go back to the schools in which they went,
Speaker 1: you're just fulfilling a self fulfilling prophecy, which is that
Speaker 1: you're only going to find potentially the same talent if
Speaker 1: those schools and institutions are not diverse in and of themselves.
Speaker 1: And so what I've seen from my colleagues, you know,
Speaker 1: I used used to head diversity recruiting for four years
Speaker 1: before my role is Chief Diversity Officer, And what we
Speaker 1: really focused on was not just thinking about alumni schools,
Speaker 1: but doubling down on hbc US and partnering, starting in
Speaker 1: with the Congressional Black Caucus. UM to also have some
Speaker 1: very candid discussions about how we showed up credibly to
Speaker 1: these h b c u s. Again, it's not enough
Speaker 1: to write the check and show up on campus once
Speaker 1: a year. What's the sustainable engagement. That's going to make
Speaker 1: sure that students, faculty, administration, university presidents really know that
Speaker 1: these companies are interested in long term impact and sustainability
Speaker 1: with their students, with their alumni, with the institutions and
Speaker 1: the curriculum. That is what's truly needed. And so I
Speaker 1: think I've seen a dramatic difference in terms of that
Speaker 1: focus over the last two years that wasn't necessarily there before.
Speaker 1: So Megan Hogan says, diversity tends to be get more diversity.
Speaker 1: John Rodgers of Aerial Investments is on the board of
Speaker 1: companies including Nike and McDonald's. He's seeing some change on
Speaker 1: corporate boards, and he says adding black and diverse directors
Speaker 1: help set the course for companies not to only hire
Speaker 1: diver as managers, but also diverse suppliers. And I see
Speaker 1: that as we talked to companies and we invest in
Speaker 1: I see that on some of the boards. Um, so
Speaker 1: it's it is uh, it is so disappointing that we
Speaker 1: haven't gotten further along. And I think that's why we
Speaker 1: have to try to find ways that if all progressive
Speaker 1: companies ask all their suppliers to have minority executives and
Speaker 1: the leadership roles on the relationships they have. Those companies
Speaker 1: will start to show up with diverse lawyers, diverse accounts,
Speaker 1: diverse financial services executives, diverse technology because their biggest customers demanded,
Speaker 1: those folks will go out and find diverse people. And
Speaker 1: I just think can't over emphasize how that question just
Speaker 1: needs to be addressed systematically. And it's fascinated me that
Speaker 1: four years ago we did it and we got away
Speaker 1: from it. And to address the landscape systematically, John Rogers says,
Speaker 1: we need a wholesale change. I don't think right, we
Speaker 1: have to break up the system and think about it
Speaker 1: in an entirely different way. And it's just unfortunate that
Speaker 1: people just got so comfortable doing things the way that's
Speaker 1: always been done, even though it hasn't been working. And
Speaker 1: so you look in Chicago again, look at the hundred
Speaker 1: largest companies to Chicago, and there's so few minority CEOs
Speaker 1: and the chop when they jump. I think we have
Speaker 1: to out of a hundred. And you look at again
Speaker 1: the major investment banks, the private major private equicky firms,
Speaker 1: major venture capital firms. Very few women in leadership roles.
Speaker 1: And the most important thing here that's the part of
Speaker 1: the economy that I said earlier, where the wealth in
Speaker 1: job to being created. The big banks will have diversity,
Speaker 1: The big insurance companies had diversity. They during the Civil
Speaker 1: rights movement. People pushed them to do the right things.
Speaker 1: But these industries now where all the growth, that's where
Speaker 1: we're most locked out of Silicon Valley again, lots and
Speaker 1: lots of growth, very little diversity. So I tell my
Speaker 1: friends the civil rights movement, you've got to adjust to
Speaker 1: where the economy is going, not to where the economy
Speaker 1: was four two years ago. Coming up the role that
Speaker 1: government plays in expanding opportunities. That's straight ahead on this
Speaker 1: Bloomberg Equality Special Advancing Black Equity. Um Shinali Bask And
Speaker 1: this is Bloomberg. You're listening to a Bloomberger Quality special
Speaker 1: Achieving Black Equity. I'm Shinali Bask. We've been talking about
Speaker 1: how progress towards racial equity has been choppy at best,
Speaker 1: but there's a key reason that changes are still coming,
Speaker 1: and that's because clients and customers of big banks and
Speaker 1: corporations are asking for it. City groups Harold Butler and
Speaker 1: Megan Hogan at Goldman Sachs a part of The Bank's
Speaker 1: efforts are being pushed forward by large corporate clients and
Speaker 1: even many government clients as well. They want to be
Speaker 1: a part of the story on inclusion and being able
Speaker 1: to support communities right, and they recognize and appreciate that,
Speaker 1: you know, the way we do it best is through
Speaker 1: banks right and broker dealers right. And so if you
Speaker 1: just think about it, we could say what we want
Speaker 1: all day long about fin techs and other entities that
Speaker 1: maybe right on the rise or have risen to do
Speaker 1: financial services for people. Banks, Sonali are trusted. We We
Speaker 1: may catch a lot of darts, sure, right, but but
Speaker 1: we're trusted, right. We're trusted entities that you know, people
Speaker 1: recognize and they know we're regulated. Do we always get
Speaker 1: it right? No? But are we doing the right thing? Sure?
Speaker 1: And so um our clients say, well, it's let's look
Speaker 1: to city to help us solve some of these challenges
Speaker 1: that we have around inclusion, because everybody has them. And
Speaker 1: when it comes to the work Goldman Sachs is doing,
Speaker 1: Megan Hogan says, there's a lot of interest from people
Speaker 1: looking to get involved. I would say I'm very encouraged
Speaker 1: and optimistic about the number of people whether it's clients, students, professionals,
Speaker 1: senior leaders, heads of state you know that are reaching out,
Speaker 1: you know, to me and my colleagues on ray in
Speaker 1: their hand, to volunteer, to be an ally to advance
Speaker 1: racial equity, to be thoughtful about actionable steps that they
Speaker 1: can take, you know, to make sure that there's diversity,
Speaker 1: equity and inclusion at their firms, their schools, their societies.
Speaker 1: You know as well. The demand has never been greater.
Speaker 1: Um I can tell you even you know, fifteen years
Speaker 1: ago when I started, you know, in some of this work,
Speaker 1: it was me more pushing into the conversation where you know,
Speaker 1: I had to make myself known what I wanted to
Speaker 1: accomplish in the d I world, especially when it came
Speaker 1: to the pro bonal cases that I worked on. And
Speaker 1: now it's the complete opposite. At the end of the day,
Speaker 1: money flows from the top. Many of the biggest clients
Speaker 1: have big banks and money managers are central government cities, states,
Speaker 1: and pension systems. So what role does the US government play.
Speaker 1: The government can and has been looking to boost equality
Speaker 1: through spending programs and by allocating resources to black money
Speaker 1: managers and black owned businesses, but the scale is still limited.
Speaker 1: Charles Phillips's work with government leaders, including most recently the
Speaker 1: New York City mayor and governor of New York State.
Speaker 1: He notes that as the largest money managers in the
Speaker 1: world still lack diversity, the problem is quite circular. Expanding
Speaker 1: investment could help boost black communities overall. Well. The Settle
Speaker 1: government has some very large pension fund and right now
Speaker 1: that's largely managed by a black lot vanguard and people
Speaker 1: like that. They could act and distribute some of that
Speaker 1: into black asset managers is one thing they could do.
Speaker 1: Um these small business administration is another area that you
Speaker 1: know they've done a good job over the years, but
Speaker 1: they could accelerate that. I think it was reduced under
Speaker 1: the prior administration. They're trying to build it back up now.
Speaker 1: But there's a lot that could do around helping small
Speaker 1: businesses in general. I think they've done a great job
Speaker 1: with the CD of five and that is kind of
Speaker 1: the community banks and lawer income neighborhoods that do the
Speaker 1: real ending. And they've put another tunnel ten pigion behind those,
Speaker 1: I think in the last sale, and they're looking to
Speaker 1: do more. So there are a number of things underway,
Speaker 1: but they're not as a visible and pus they get
Speaker 1: a little bit typnical. When Barack Obama became the first
Speaker 1: black president in two thousand and nine, John Rodgers was
Speaker 1: on the inaugural committee. He says the government is struggling
Speaker 1: to diversify its resources despite years of efforts. I think
Speaker 1: government does a decent job when they have the opportunities
Speaker 1: to buy directly. You know, they have some legal issues
Speaker 1: they have to deal with, and you know court cases
Speaker 1: against affirmative action that sometimes you can make it difficult
Speaker 1: in certain states and certain cities and the federal government.
Speaker 1: So I think within the constraints of the legal system,
Speaker 1: government does a pretty good job. When they could do better.
Speaker 1: Is pushing all the people to do business or get
Speaker 1: resources from government to do the right things. If you
Speaker 1: think about that, all the universities and museums and hospitals,
Speaker 1: they got a lot of money from Washington to get
Speaker 1: through the pandemic. No one's asking those museums, university and
Speaker 1: hospitals about the diversity of their spit and who they're
Speaker 1: using to manage their endowment or to do their advertising
Speaker 1: or to do their technology. They're getting a free ride.
Speaker 1: Same all the big contractors, you know, the big airlines
Speaker 1: Delta an American, or the the big defense contractors like
Speaker 1: General Dynamics and the like. No one's pushing them about
Speaker 1: all how they spend their money three in sixty five
Speaker 1: days the year. And that's where the government can use
Speaker 1: it impact, the influence to force these institutions to be
Speaker 1: transparent with how they spend their dollars and hold them
Speaker 1: accountable on how they spend those dollars. So government can
Speaker 1: have much more impact if they reach into these institutions
Speaker 1: that are gathering government resources all the time. John Rogers
Speaker 1: says black leaders in the government have historically helped push
Speaker 1: some of these efforts along, but black leaders make up
Speaker 1: just a small portion of the government. Under the tenure
Speaker 1: of local black politicians, careers were soaring for black banker
Speaker 1: is like Ray McGuire, who rose to become vice chairman
Speaker 1: at City Group before stepping down in recent years, and
Speaker 1: Bill Lewis, whose career ascended to the highest ranks of
Speaker 1: investment bank Lazard. He recently left to join private investing
Speaker 1: giant Apollo Global Management. Lewis recently led a charge among
Speaker 1: corporate leaders to protect voting rights in Georgia and when
Speaker 1: it comes to leaders in the government. John Rogers says
Speaker 1: black mayors in particular have spurred companies to invest in
Speaker 1: black leaders. It's interesting to me, you know, it's when
Speaker 1: I came home from college roughly forty years ago, Harold
Speaker 1: Washington got elected mayor of Chicago. You had progressive mayors
Speaker 1: throughout the country. Uh. Maynor Jackson Atlanta was my personal hero.
Speaker 1: All those institutions, all the all those mayors, when they
Speaker 1: were running their cities, they insisted all the financial services
Speaker 1: businesses that did business with their city had to have
Speaker 1: diverse talent on the relationship with the city. And all
Speaker 1: of a sudden, if you look at the generation of
Speaker 1: leaders today, the Jim Rentals, the Route Capital, and the
Speaker 1: and the Ray McGuire's at City Bank, and the you
Speaker 1: go Bill Lewis, who've been a Lazard for a long time.
Speaker 1: And you know, yet all these guys got their careers
Speaker 1: going roughly forty years ago when these progressive mayors forced
Speaker 1: the investment banks to have diverse teams on the relationship
Speaker 1: with their cities. And I could go through at least
Speaker 1: a dozen of the leaders. Sometimes there's still a big company.
Speaker 1: Sometimes they started their own firms but they got started
Speaker 1: because important mayors demanded the financial institutions look like America,
Speaker 1: and we got away from that. There are so many
Speaker 1: priorities of political leaders lead with, and that's one that
Speaker 1: they haven't been as a consistent with as it needs
Speaker 1: to be city groups. Harold Butler also says that the government,
Speaker 1: both through federal and state laws, has had a history
Speaker 1: of prohibiting the advancement of black society. Some of that
Speaker 1: was through Jim Crow and another big part of that
Speaker 1: was through redlining. When the US created the Housing Act
Speaker 1: in the nineteen thirties, black neighborhoods were deemed more risky
Speaker 1: to invest in, and banks there for step back from
Speaker 1: lending to them in a big way. That created the
Speaker 1: need for more black owned banks to step up and
Speaker 1: funnel capital into communities. And what made matters worse is
Speaker 1: that black neighborhoods also faced death, loss and damage through violence.
Speaker 1: Harold Butler cited the Tulsa Race Massacre of where a
Speaker 1: district known as Black Wall Street was burned down, hundreds died,
Speaker 1: and many thousands were driven out of their homes. And
Speaker 1: so when you think about, you know, how black communities
Speaker 1: went from a designing the ratification of the Mancipation Proclamation
Speaker 1: in eighteen sixty and what did not occur after that, right,
Speaker 1: and events like Jim Crow that became a byproduct of
Speaker 1: the anger that society that white America had against people
Speaker 1: of color, right, because of the fact that labor wasn't
Speaker 1: free anymore. Right. And so if you just start there, right,
Speaker 1: and you look at what occurred when when a black
Speaker 1: community dared to kind of buck the proverbial trend and
Speaker 1: create wealth and build a sense of community where they
Speaker 1: weren't allowed to participate elsewhere, which is Tulsa, right, what happened?
Speaker 1: They burned it down, right, And you know since since
Speaker 1: since right, and Blacks being able being shut out of
Speaker 1: the economy and being shut out of just being able
Speaker 1: to survive and prosper and generate wealth. This is this
Speaker 1: is where we are today. And this is why the
Speaker 1: the plight, if you will, why why black banks are
Speaker 1: so incredibly important, right, because they were really created and
Speaker 1: came into existence to be the conduit in the vehicle
Speaker 1: to create wealth. Because if you have systematically a system
Speaker 1: that's geared towards you know, whether it be laws, the
Speaker 1: Housing Act and things like that, the redlining effect that
Speaker 1: I know you're very familiar. You all have done great
Speaker 1: content on redlining and communities, and I know a lot
Speaker 1: of people are familiar with that. But when you put
Speaker 1: all that into a bucket, right, it's the combination of
Speaker 1: exploitation and deliberate deliberately not including people of color. So
Speaker 1: banks have played a key role and continue to play
Speaker 1: key role and being able to help entrepreneurs, help people
Speaker 1: get home loans and things like that. But even still,
Speaker 1: they themselves have been locked out of the capital markets
Speaker 1: for a long time. When you think about the impacts
Speaker 1: of redlining today, it's still true that black applicants have
Speaker 1: lower rates of approval from mortgages at all major lenders.
Speaker 1: A Bloomberg analysis found the disparity is greatest at Wells Fargo,
Speaker 1: where a half of black applicants are rejected. That was
Speaker 1: even the case during the mortgage refinancing boom in when
Speaker 1: white homeowners saved an estimated three point eight billion dollars.
Speaker 1: And in response to our reporting on Wells Fargo's treatment
Speaker 1: of black applicants, the bank set it treats all potential
Speaker 1: borrowers the same. It also said it's committed to closing
Speaker 1: the minority home ownership gap. The US Department of Justice
Speaker 1: is still trying to combat redlining, which is now an
Speaker 1: illegal practice. The Consumer Financial Protection Bureau has been eyeing
Speaker 1: banking deserts across the country, areas in which people are
Speaker 1: unable to get loans. Zanilia Harris explains the ripple effect
Speaker 1: that comes from being shut out of the housing market.
Speaker 1: So when I look at all of the laws and
Speaker 1: things that have been passed in America and how when
Speaker 1: they get passed, they were supposed to be an opportunity
Speaker 1: for all, but end up you seeing Carver, Well, yeah,
Speaker 1: it's it's it's for you, It's for It's supposed to
Speaker 1: be for all, but not not for you. And so
Speaker 1: when I look at, you know, this fight for black
Speaker 1: banks to succeed, because you know, there aren't that many
Speaker 1: black banks that are left um in America. So when
Speaker 1: I look at at at the struggles that they had
Speaker 1: to form and then to um be a resource to
Speaker 1: their communities and then strive to then be cut off.
Speaker 1: So therefore, you know, African Americans couldn't get um um
Speaker 1: access to capital in order to purchase property. And you know,
Speaker 1: property is the foundation of a lot of things. So
Speaker 1: if you have property, then you can leverage the property
Speaker 1: to what you have to if you wanted to build up,
Speaker 1: if you wanted to start a business. Because whenever you
Speaker 1: go for a business loan, they're gonna ask you for
Speaker 1: um you need um an asset for them to um
Speaker 1: collateral rise in order for you to get that loan.
Speaker 1: So if you are not able to purchase the property
Speaker 1: then and and it still exists. I mean like, if
Speaker 1: you're going for a loan, a business loan, they ask
Speaker 1: you what your assets are because they need to attach
Speaker 1: they need to have some way to secure that if
Speaker 1: you default on the loan, that they're going to get
Speaker 1: their money back, right, So, if you don't have any assets,
Speaker 1: you're not gonna get a loan. So and for most people,
Speaker 1: their largest asset is their home. The US government is
Speaker 1: also taking some actions to get more capital to black communities.
Speaker 1: For example, Harold Butler's has the Treasury Department is starting
Speaker 1: to advance its work with some of the black own
Speaker 1: banks that he works with. I'll just start by saying,
Speaker 1: give the U. S. Treasury um, you know, some kudos
Speaker 1: here because in the first first time and over two
Speaker 1: thirty three plus years, whatever the amount of years is
Speaker 1: and Treasures existence. They've never worked with a small black
Speaker 1: financial institution. Right, So today there are two banks Industrial
Speaker 1: Bank in Washington, d C. Unity Bank of Texas that
Speaker 1: are engaged in Treasury portfolio business now as a subcontractor.
Speaker 1: That's okay. Treasure still had to approve it, right, But
Speaker 1: it's an important first step because even for the government, right,
Speaker 1: it's that it has to be about inclusion and and
Speaker 1: it's and I'm not suggesting it's easy for the government
Speaker 1: because if you look at the scale and volume of
Speaker 1: the way they do business with people like you and I,
Speaker 1: the citizens, and they do business with the governments, and
Speaker 1: they do business intro government, you know, it's their inherent risk. Right.
Speaker 1: It evoves capital to be able to have people on
Speaker 1: the ready to do things and make investments in what
Speaker 1: the government would like you to do. And so it's
Speaker 1: not easy. Critics say progress at the government level is
Speaker 1: still moving in the wrong direction. But still John Rogers says,
Speaker 1: changes emerging in corporate America can continue to move the needle.
Speaker 1: You know, we have these progressive political leaders now in Washington.
Speaker 1: Maxine Waters chairs the House Financial Services Committee, and Joyce Batty,
Speaker 1: chairman of the Congression Black Caucus, really great leaders like
Speaker 1: uh here in town comers from Robin Kelly. If we
Speaker 1: lose the House, it's gonna be much more difficult to
Speaker 1: bring the kind of change that we hope for because
Speaker 1: I know this Congress is committed to getting uh supporting
Speaker 1: minority business and resources to help minority businesses be successful.
Speaker 1: So I worry that's gonna be a it could go
Speaker 1: the wrong direction next year depending on the election, So
Speaker 1: working hard hopefully that hope that doesn't happen. UM. The
Speaker 1: positive side though, is that again our civic Committee, we
Speaker 1: hope that that can be a role model for how
Speaker 1: other cities can work with their local UM business organizations
Speaker 1: to do the right thing. And I know there's lots
Speaker 1: of talks going around the country, the Business round Table
Speaker 1: and others talking more about working minority on companies. So
Speaker 1: there is a buzz out there that's hopeful. So we
Speaker 1: had a few green shoots, and I think finally we
Speaker 1: have to we have to point out the success stories
Speaker 1: here in Chicago. Companies like Excellon and McDonald's have long histories.
Speaker 1: University of University Chicago has a great history of working
Speaker 1: minority businesses and creating minority. Well, we need to celebrate
Speaker 1: those success stories and hold them up with role models
Speaker 1: where other anchor institutions can do similar things in their hometowns.
Speaker 1: As John Rogers said, there are green shoots, but just
Speaker 1: as many companies have made progress on some equality goals,
Speaker 1: others are showing that there are setbacks too, and there's
Speaker 1: no promise of progress moving faster either. It's why keeping
Speaker 1: companies and the government accountable is so important for entrepreneur
Speaker 1: and private equity. Alum Ryan Williams, it's about the follow
Speaker 1: through and the change will simply take time, like this
Speaker 1: wasn't just you know, lives service. I think the unfortunate
Speaker 1: reality is that the numbers UH in terms of you know,
Speaker 1: capital being committed to diverse managers, UM, in terms of
Speaker 1: representation from hiring perspective, UM, they don't actually show the
Speaker 1: kind of change that we would we would um you know,
Speaker 1: have believed was in the making a couple of years ago.
Speaker 1: And that's frustrating. And the inequality and representation has been
Speaker 1: centuries into making, and you know, it's been craziness to
Speaker 1: think that within a year or two years, UM, there'd
Speaker 1: be parity or there'd be a level playing field. So
Speaker 1: I think you have to take that, UM, that into
Speaker 1: account the long term nature of the issues that we've
Speaker 1: seen UM when assessing you know, the timeline for its solution.
Speaker 1: What I will say is that despite the fact that
Speaker 1: there hasn't been the kind of follow through in a
Speaker 1: lot of fronts that you might have hoped, there have
Speaker 1: been some really promising and impactful steps forward that are left.
Speaker 1: And so my hope is that again, as we reflect
Speaker 1: on these last couple of year years, UM, we recognize
Speaker 1: that there's been far too many of us who have
Speaker 1: made statements and and put out you know, commitments, but
Speaker 1: I haven't followed through with attempts or action to substantiate
Speaker 1: those those UM commitments. UM. And again, it's better in
Speaker 1: many glints, to to try and to you know, take
Speaker 1: the time to figure out how to bring to life
Speaker 1: what you said, even if it's not initially or immediately
Speaker 1: impactful UM. And it is to you know, take the
Speaker 1: conventional path in or the lift lift path and uh
Speaker 1: and wait, you know, to be pressured or pushed to action.
Speaker 1: So hopefully these discussions can catalyze just one person UM
Speaker 1: to reassess, you know, the difference between what they said
Speaker 1: and what they're doing and drive change in meaningful ways.
Speaker 1: And we'll leave it there with those thoughts from Ryan Williams.
Speaker 1: Thanks for listening to this Bloomberg Equality special focusing on
Speaker 1: achieving black equity. You can get more news and stories
Speaker 1: like this online at Bloomberg dot com slash equality All.
Speaker 1: So check out season four of The Paycheck, our podcast
Speaker 1: focused on equality. Find that on Apple, Spotify and anywhere
Speaker 1: else you get your podcasts um Shinali Bask and this
Speaker 1: is Bloomberg h