WEBVTT - Bloomberg Equality: Achieving Black Equity 0:00:03.160 --> 0:00:06.160 Progress toward equity for Black Americans has been shaky, and 0:00:06.200 --> 0:00:09.120 after decades of a widening wealth gap, the pandemic led 0:00:09.160 --> 0:00:12.440 to mass closures of black owned businesses. Black women were 0:00:12.480 --> 0:00:16.600 disproportionately impacted, and the unemployment rate for Black Americans took 0:00:16.760 --> 0:00:19.759 much longer to recover than that of white Americans. And 0:00:19.760 --> 0:00:22.440 in the wake of George Floyd's murder, as the US 0:00:22.520 --> 0:00:26.120 began recognizing June tenth as a federal holiday, the forces 0:00:26.160 --> 0:00:30.000 pushing for equality grew louder. Banks, money managers, and their 0:00:30.000 --> 0:00:33.640 clients throughout Corporate America looked to start playing a greater 0:00:33.800 --> 0:00:37.479 role in closing deep disparities related to race, promising to 0:00:37.600 --> 0:00:42.200 hire more Black Americans, Hey, more equal wages and expand opportunities. 0:00:42.440 --> 0:00:45.239 Now two years later, how have they done Over the 0:00:45.280 --> 0:00:48.000 next hour, We'll try to answer that question in this 0:00:48.040 --> 0:00:54.200 Bloomberg Equality special Achieving Black Equity m Shali Bassk. Progress 0:00:54.240 --> 0:00:57.320 toward the goal of racial equity has been choppy at best. 0:00:57.560 --> 0:01:01.080 Most data disclosed from large firms across Corporate America and 0:01:01.120 --> 0:01:05.080 the Federal Reserve are from until that year. Federal Reserve 0:01:05.160 --> 0:01:08.400 data show the disparity between black and white Americans only 0:01:08.520 --> 0:01:11.640 deepened in terms of household net worth. For John Rogers, 0:01:11.680 --> 0:01:14.000 the founder of Aerial Investments who's on the board of 0:01:14.000 --> 0:01:18.360 major fortune companies, the challenge ahead is important to soak in. 0:01:18.520 --> 0:01:21.039 While things have started to change in corporate America, the 0:01:21.080 --> 0:01:24.319 progress is now widely seen is terribly slow. The data 0:01:24.400 --> 0:01:26.920 is crystal clear things are getting worse. When it comes 0:01:26.959 --> 0:01:30.680 to the black wealth gap. SAR from the Federal Reserve St. 0:01:30.720 --> 0:01:34.560 Louis has data the shows between twenties sixteen, college DK 0:01:34.720 --> 0:01:37.319 black saw the wealth declined ten percent. In college dcated 0:01:37.319 --> 0:01:39.840 white saw the wealth of increase over nine percent. This 0:01:39.959 --> 0:01:42.000 idea that things are getting better, I just think it's 0:01:42.000 --> 0:01:43.920 so important to pound home that it really is not 0:01:44.000 --> 0:01:47.240 getting better. I think that these companies are more committed, 0:01:47.319 --> 0:01:49.400 but we've got to remind them that they've got to 0:01:49.440 --> 0:01:52.360 do more than just the token, small efforts. They've got 0:01:52.360 --> 0:01:55.120 to have more of a systematic understanding of how to 0:01:55.160 --> 0:01:59.000 create true diversity and true wealth minority communities. We get 0:01:59.040 --> 0:02:01.400 a few little bright spot we need to do much more. 0:02:01.480 --> 0:02:04.360 John Rogers points out that from most large firms, their 0:02:04.400 --> 0:02:07.760 staff don't look like the communities they serve. Charles Phillips, 0:02:07.840 --> 0:02:11.079 the co chair of the Black Economic Alliance explains part 0:02:11.080 --> 0:02:14.360 of the problem. Building wealth is something the black community 0:02:14.400 --> 0:02:17.240 has been struggling with for decades, and average household now 0:02:17.360 --> 0:02:19.760 is about ten percent of the white household, so that's 0:02:19.760 --> 0:02:22.079 obviously kind of the definition of the problem. A lot 0:02:22.120 --> 0:02:24.320 of that comes down to home ownership, the fact that 0:02:24.440 --> 0:02:27.720 mortgages weren't as available and comes with as high redlining, 0:02:27.960 --> 0:02:30.840 lots of issues. So the home ownership issue is around 0:02:30.880 --> 0:02:34.639 for black people about seventy one percent for the nation, 0:02:34.720 --> 0:02:37.560 and so closing that gap is at leads one path 0:02:37.760 --> 0:02:40.560 to increasing black wealth, but there are other issues as well. 0:02:40.600 --> 0:02:44.040 Phillips was former president at Oracle who left and ran 0:02:44.200 --> 0:02:47.520 Software Giant in for He's been working with firms across 0:02:47.560 --> 0:02:51.360 Corporate America to hire or promote one million Black Americans 0:02:51.440 --> 0:02:54.240 in the next ten years. Last year, the initiative called 0:02:54.320 --> 0:02:58.480 one ten helps elevate twenty five thousand people, while that 0:02:58.560 --> 0:03:01.720 group has placed thousands more this year and Corporate America 0:03:01.800 --> 0:03:05.120 has wrapped up promises on hiring more less than one 0:03:05.320 --> 0:03:08.880 fifth of fortune five hundred companies have joined the effort. 0:03:09.080 --> 0:03:13.680 The issues are matching the location, the job, skill, the 0:03:13.680 --> 0:03:16.600 type of job that the company needs, with the type 0:03:16.600 --> 0:03:19.240 of people being trained, and that's there's always a disconnect. 0:03:19.320 --> 0:03:21.560 Someone needs to tend people in sales and Detroit. What 0:03:21.639 --> 0:03:23.720 were just trained with someone in I t in Atlanta. 0:03:23.919 --> 0:03:27.280 Getting that matching done correctly in one challenge and two 0:03:27.320 --> 0:03:30.000 would need more people participating. And I think the thirty 0:03:30.040 --> 0:03:32.440 issue is people are used to hiring the way they hire. 0:03:32.720 --> 0:03:34.400 A lot of people who in charge of h R 0:03:34.520 --> 0:03:37.320 They have their ten colleges they recruit from and specific 0:03:37.400 --> 0:03:39.680 ways that they are used to their systems working, and 0:03:39.880 --> 0:03:41.720 sometimes it's hard to get them to change as well. 0:03:41.760 --> 0:03:43.880 So I would say people are more open to it 0:03:43.880 --> 0:03:46.000 than they were more open to hiring for skill the 0:03:46.080 --> 0:03:48.880 versus degrees, which is important, but it's a slow, slow 0:03:48.920 --> 0:03:50.640 burned to you like to get there for them. Charles 0:03:50.680 --> 0:03:53.160 Phillips now runs a company called Reform. He's one of 0:03:53.200 --> 0:03:55.960 many black entrepreneurs who struck out on their own while 0:03:56.040 --> 0:03:58.880 also staying in touch with big business. He currently serves 0:03:58.920 --> 0:04:02.320 on the boards of American Express and Viacom. Zanilia Harris 0:04:02.400 --> 0:04:05.400 has also started her own firm after years at large 0:04:05.440 --> 0:04:08.840 companies like Merrill Lynch and Nasdak. Now she helps women 0:04:08.880 --> 0:04:11.960 across the country build wealth. She says closing the racial 0:04:12.000 --> 0:04:15.280 income gap for black women would be transformative and bring 0:04:15.360 --> 0:04:18.280 real generational change. The women that I work with, they 0:04:18.320 --> 0:04:21.320 want to create wealth for themselves so that they are 0:04:21.360 --> 0:04:23.359 able to live the life that they want, They're able 0:04:23.400 --> 0:04:27.320 to support their family, they are able to leave something 0:04:27.400 --> 0:04:32.120 to that next generation. And I'm also hearing how they 0:04:32.120 --> 0:04:36.240 are still fighting to be seen and heard in organizations 0:04:36.240 --> 0:04:38.640 that they work in. So this is not just a 0:04:38.680 --> 0:04:42.360 black woman thing. The barriers to creating wealth over generations 0:04:42.480 --> 0:04:45.400 is something that can't be overstated. John Rogers says it's 0:04:45.440 --> 0:04:49.039 kept Black Americans back for decades, spanning back to sixteen 0:04:49.120 --> 0:04:52.839 nineteen and the inception of American slavery. Lack of wealth 0:04:52.839 --> 0:04:55.480 that's been created going back in the sixteen nineteen project 0:04:55.520 --> 0:04:58.279 talked about the challenges we faced and faced creating wealth 0:04:58.320 --> 0:05:01.719 in this country through historic domination and segregation and the like. 0:05:02.000 --> 0:05:04.359 It's hard to build businesses if we don't have capital, 0:05:04.480 --> 0:05:06.640 you know, we don't have multigenerational wealth to help with 0:05:06.720 --> 0:05:10.200 start businesses. So that's a big problem because minority owned 0:05:10.200 --> 0:05:13.080 businesses higher minority people and create wealth, minority communities and 0:05:13.120 --> 0:05:16.960 create philanthropy, and minority communities and political empowerment in minority communities. 0:05:17.000 --> 0:05:19.040 So that's kind of a big deal, that lack of 0:05:19.160 --> 0:05:21.960 multigenerational wealth. I think it's something you can't be understated, 0:05:22.080 --> 0:05:25.200 but it has been understated for a long time. Issues 0:05:25.279 --> 0:05:27.920 like this started cropping up more and more after the 0:05:27.960 --> 0:05:31.800 murder of George floyd In and more conversations about race 0:05:31.839 --> 0:05:34.719 started taking place in corporate America. A handful of US 0:05:34.800 --> 0:05:38.760 companies gave staff the option to observe Juneteenth, and the 0:05:38.760 --> 0:05:41.440 following year it was named to federal holiday. More than 0:05:41.480 --> 0:05:45.279 a hundred fifty years after the Emancipation Proclamation was signed, 0:05:45.520 --> 0:05:47.719 This year is the first time the market is closed 0:05:47.720 --> 0:05:50.640 in observance now. Zanalia Harris says there's still more to 0:05:50.720 --> 0:05:54.040 do for corporate America to embrace the changes truly needed 0:05:54.120 --> 0:05:57.480 as racial tensions continue to swell across much of the country. 0:05:57.560 --> 0:06:00.320 Even though it being recognized as a holiday, I don't 0:06:00.320 --> 0:06:04.360 think that involves the underlying issues with where we are 0:06:04.560 --> 0:06:08.280 in America when it comes to race equality. I heard 0:06:08.279 --> 0:06:11.960 a lot of promises, and I was skeptical about whether 0:06:12.000 --> 0:06:15.240 or not those promises will be fulfilled. And then I 0:06:15.279 --> 0:06:19.360 think about my daughter and the future and what I 0:06:19.400 --> 0:06:23.960 am releasing her too, and I'm sad because I never 0:06:24.080 --> 0:06:27.919 thought that we would be here with race relations. I 0:06:27.960 --> 0:06:30.680 have a lot of feelings about all of this, and 0:06:31.080 --> 0:06:34.600 I'm trying to remain positive and hopeful. But as I 0:06:34.640 --> 0:06:38.080 read the news, I become less and less hopeful that 0:06:38.200 --> 0:06:41.000 things will change. And there's new data now to support 0:06:41.040 --> 0:06:44.159 that concern. A paper circulated by the National Bureau of 0:06:44.200 --> 0:06:47.640 Economic Research this month says the gap between black and 0:06:47.680 --> 0:06:52.640 white wealth is on track to widen even further. Coming up, 0:06:52.720 --> 0:06:55.120 how Wall Street is looking to close steep gaps in 0:06:55.160 --> 0:06:59.039 funding for black owned businesses and entrepreneurs. That's straight ahead 0:06:59.120 --> 0:07:03.440 on this Bloomberger Quality Special Achieving Black Equity. I'm Shinali Basik, 0:07:03.640 --> 0:07:13.400 and this is Bloomberg. This is a Bloomberg Equality Special 0:07:13.520 --> 0:07:17.960 Achieving Black Equity. I'm Shinali Basik. Despite fits and starts 0:07:17.960 --> 0:07:21.080 on corporate efforts to close the racial wealth gap, the 0:07:21.200 --> 0:07:24.720 difference in prosperity between black families and white families in 0:07:24.760 --> 0:07:28.320 America is stark. According to data from the Federal Reserve 0:07:28.360 --> 0:07:31.200 Bank of St. Louis, a typical black family had about 0:07:31.240 --> 0:07:35.120 twelve cents on the dollar when compared with their white counterparts. 0:07:35.440 --> 0:07:38.080 That gives a white family more than eight times the 0:07:38.120 --> 0:07:40.760 wealth of a black family, and that gap has been 0:07:40.840 --> 0:07:45.720 unchanged for decades. Equal hiring practices, equal pay, and access 0:07:45.760 --> 0:07:48.720 to capital for housing are all hurdles and building wealth. 0:07:48.880 --> 0:07:51.760 But another is access to capital to start a business. 0:07:52.040 --> 0:07:55.440 According to a study by Accenture, only twenty nine percent 0:07:55.520 --> 0:07:58.680 of loans sought by black small businesses are approved by 0:07:58.760 --> 0:08:01.640 large banks, and that years twice as high for white 0:08:01.680 --> 0:08:05.800 small business owners. Ryan Williams is an entrepreneur. He graduated 0:08:05.840 --> 0:08:09.680 from Harvard, worked at Golden Sacks and private equity giant Blackstone. 0:08:09.960 --> 0:08:13.800 Williams started his real estate investment company in and hit 0:08:13.920 --> 0:08:17.520 many roadblocks along the way. He had loans turned down 0:08:17.640 --> 0:08:20.680 by several banks when starting his firm. That hasn't changed 0:08:20.720 --> 0:08:24.160 that much. So, you know, it's still really difficult here, 0:08:24.240 --> 0:08:28.240 you know, a minority generally, because there's still a pattern 0:08:29.080 --> 0:08:32.760 recognition issue. There's still sort of a cookie cutter mall 0:08:32.920 --> 0:08:36.200 for what you know, a successful manager, special investor looks 0:08:36.240 --> 0:08:40.480 like most of our our large institutional investors universe. And 0:08:40.559 --> 0:08:42.600 so I think that you know, in the margins, there's 0:08:43.000 --> 0:08:47.160 more opportunities and there are more black entrepreneurs getting funded 0:08:47.200 --> 0:08:51.360 black managers getting funded, women lead and owned managers getting funded. 0:08:51.559 --> 0:08:54.960 But it's still very incremental, and I think that's because 0:08:55.160 --> 0:08:59.760 people still are fundamentally focused on the kind of blueprint 0:09:00.120 --> 0:09:04.720 success looking very homogeneous, like frankly white male as the archetype. 0:09:04.880 --> 0:09:08.760 And I don't think that's changed. Is it frustrating? Yeah? 0:09:08.840 --> 0:09:12.720 Oh yeah. Look, I'm I am incredibly privileged in seeing 0:09:12.800 --> 0:09:16.679 those you know, founders and CEOs of Realist to investor 0:09:16.760 --> 0:09:20.600 management platform, especially black founders and CEOs. I know, I'm 0:09:20.720 --> 0:09:22.800 you know, at the one percent of the one person 0:09:22.880 --> 0:09:25.240 in terms of capital I've been able to raise, and 0:09:25.520 --> 0:09:27.480 I take a lot of pride in the returns we've 0:09:27.480 --> 0:09:30.920 been able to deliver to the investors that have entrusted 0:09:31.040 --> 0:09:34.360 their capital with me. But I get turned down probably 0:09:34.400 --> 0:09:38.200 nine five percent at the time. Ultimately, Ryan Williams was 0:09:38.280 --> 0:09:40.040 able to start his firm with the help of a 0:09:40.080 --> 0:09:43.080 black owned bank. While the number of black owned lenders 0:09:43.120 --> 0:09:46.360 has declined drastically over the past few decades, they play 0:09:46.400 --> 0:09:49.679 a huge role in black communities. This year's City Group 0:09:49.720 --> 0:09:52.319 created a new team in order to work more closely 0:09:52.320 --> 0:09:55.520 with minority owned banks and broker dealers. Harold Butler was 0:09:55.559 --> 0:09:58.240 tapped at City Group to lead that effort after years 0:09:58.240 --> 0:10:00.440 of working with the U. S. Treasury depart and while 0:10:00.520 --> 0:10:02.200 at the bank, it was a role in which he 0:10:02.280 --> 0:10:05.960 also helps City work with black owned banks. Fundamentally, it's 0:10:06.000 --> 0:10:09.520 all about access to the capital itself. So being able 0:10:09.559 --> 0:10:14.480 to help banks, for example, create business, to grow their 0:10:14.520 --> 0:10:17.840 business and to have the capital to lend is key. 0:10:17.880 --> 0:10:22.200 But what's different about say a Mechanic and Farmers Bank 0:10:22.280 --> 0:10:24.880 in Durham, North Carolina, in a city, other than the 0:10:24.920 --> 0:10:28.640 fact that they're a small, community based financial institution and 0:10:28.720 --> 0:10:31.960 cities a large global bank. The difference really is in 0:10:32.040 --> 0:10:36.400 the power of the neighborhood. That CEO knows his neighborhood right, 0:10:36.480 --> 0:10:40.520 he knows those budding entrepreneurs, and he's willing as a 0:10:40.559 --> 0:10:44.400 practical matter to take the risk in those firms of 0:10:44.520 --> 0:10:47.560 those budding entrepreneurs and black founders what have you, and 0:10:47.600 --> 0:10:51.000 helped them to see the possibilities of their dreams. While 0:10:51.080 --> 0:10:54.360 black owned banks are important, there's still a huge scarcity 0:10:54.400 --> 0:10:58.440 of funds flowing from the biggest firms to black entrepreneurs. Cadre, 0:10:58.679 --> 0:11:01.520 led by Ryan Williams, stock a partnership with black Rock 0:11:01.640 --> 0:11:04.680 in order to invest in affordable housing. Black Rock is 0:11:04.720 --> 0:11:07.640 the largest money manager in the world. William said he 0:11:07.679 --> 0:11:09.680 would like to see more big firms step up to 0:11:09.720 --> 0:11:11.920 the plate in this way. I think that there have 0:11:12.040 --> 0:11:14.600 to be more of these kinds of partnerships between, you know, 0:11:14.679 --> 0:11:19.680 within the institutional investing ecosystem, where people take the same 0:11:19.760 --> 0:11:23.640 level of creativity and imagination they take to business problems 0:11:23.640 --> 0:11:27.160 and apply it to the underrepresentation problem that we're seeing, 0:11:27.400 --> 0:11:30.000 and that community is encouraging and positive. Is unfortunate that 0:11:30.000 --> 0:11:33.400 Black Rocks probably the exception, not the norm, when you 0:11:33.440 --> 0:11:35.959 look at all the companies that put out statements and 0:11:36.320 --> 0:11:38.560 you know, said we're going to be spending time on 0:11:39.240 --> 0:11:42.160 UH an effort and resources on actually trying to help 0:11:42.440 --> 0:11:45.440 reduce the wealth gap. And similar to Black Rock, Wall 0:11:45.440 --> 0:11:48.640 Street is putting top analysts to work on the numbers 0:11:48.679 --> 0:11:51.240 and how to put more money to work in black communities. 0:11:51.559 --> 0:11:54.480 Goldman Sachs last year created a program to get ten 0:11:54.600 --> 0:11:58.040 billion dollars worth of capital to firms run by black women. 0:11:58.320 --> 0:12:01.960 Megan Hogan heads up Diverse the equity and inclusion efforts 0:12:02.080 --> 0:12:04.559 at the firm. One of the fastest ways to accelerate 0:12:04.640 --> 0:12:08.080 change and effectively address the racial wealth gap in the 0:12:08.160 --> 0:12:11.720 United States is to listen to and invest in black women. 0:12:12.040 --> 0:12:14.120 The research at a high level, you know, found that 0:12:14.200 --> 0:12:17.600 reducing the earnings gap for black women has the potential 0:12:17.679 --> 0:12:20.920 to create up to one point seven million US jobs 0:12:21.000 --> 0:12:24.719 and increase the annual US GDP by anywhere between three 0:12:24.800 --> 0:12:28.520 hundred and four hundred and fifty billion, So huge impact there. 0:12:28.840 --> 0:12:31.520 We're about a year into this. Since launching in March, 0:12:33.040 --> 0:12:37.000 we've made about one billion dollars of investments to our 0:12:37.080 --> 0:12:40.160 seven key pillars. It's part of our long term strategy 0:12:40.360 --> 0:12:42.760 and I would highlight, you know, two recent investments that 0:12:42.800 --> 0:12:45.720 we made are the MAMI and the Care Academy. MAMI 0:12:45.880 --> 0:12:49.240 is expected to impact about twelve thousand Black women across 0:12:49.280 --> 0:12:52.760 the country um and Care Academy is expected to impact 0:12:52.840 --> 0:12:56.640 about fifty thousand Black women. So again, we're very focused 0:12:56.679 --> 0:13:00.600 on quantifying our impact um in our commitment. While Black 0:13:00.600 --> 0:13:03.320 Americans have found it hard to raise capital and rise 0:13:03.360 --> 0:13:07.040 in corporate America, black women have found it particularly hard, 0:13:07.160 --> 0:13:10.120 and the numbers show it. Black founders represented a mere 0:13:10.240 --> 0:13:14.600 one percent of venture capital funding in according to Accenture, 0:13:15.040 --> 0:13:18.160 and Crunch based data show that percentage has barely moved. 0:13:18.360 --> 0:13:22.000 Goldman Sachs calculates that black female founders account for less 0:13:22.040 --> 0:13:25.280 than one third of that ratio. They claim point three 0:13:25.360 --> 0:13:28.719 percent of all venture capital funding, and that funding is 0:13:28.840 --> 0:13:31.640 key for growth when you're talking about a demographic that's 0:13:31.679 --> 0:13:35.360 often marginalized by corporate America. Zanilia Harris is the founder 0:13:35.360 --> 0:13:38.920 of Harris and Harris Wealth Management. I think when Black 0:13:38.920 --> 0:13:41.760 women decide to go out on their own um it's 0:13:41.840 --> 0:13:45.160 because of the fact that they feel that there's not 0:13:45.360 --> 0:13:48.600 opportunity for growth. I had always wanted to be on 0:13:48.679 --> 0:13:51.840 my own because I felt like owning a business would 0:13:51.880 --> 0:13:56.319 be another way to grow wealth in my family, and 0:13:56.760 --> 0:14:00.440 I also wanted to leave a legacy for the children 0:14:00.440 --> 0:14:02.920 that I would have that they could build upon. But 0:14:03.080 --> 0:14:06.200 the more and more I read about the history of 0:14:06.600 --> 0:14:11.920 African American growing wealth in America, I learned that while 0:14:12.320 --> 0:14:16.640 there have always been people African Americans who wanted to 0:14:17.559 --> 0:14:20.600 leave a legacy, whether that's building a business, to move 0:14:20.720 --> 0:14:24.080 up in or get opportunities in corporate Americas, because at 0:14:24.080 --> 0:14:27.000 one point we didn't even have the opportunity, and we 0:14:27.000 --> 0:14:31.920 were relegated to only being able to build in our 0:14:31.960 --> 0:14:36.120 own communities and to service only our own communities, and 0:14:36.200 --> 0:14:38.920 that's why leaders like Goldman's Megan Hogan are looking to 0:14:39.000 --> 0:14:42.760 specific programs to fund startups by black women, and other 0:14:42.840 --> 0:14:45.840 firms are doing the same. One million black women, you know, 0:14:45.960 --> 0:14:49.160 very important to me personally, you know, it was. It 0:14:49.200 --> 0:14:51.920 was a highly emotional day when we announced it to 0:14:51.960 --> 0:14:54.520 the firm and had a firm white town hall to 0:14:54.640 --> 0:14:58.080 talk about the potential impact of the program. UM. I 0:14:58.120 --> 0:15:02.120 was raised by a sen a mom who worked too 0:15:02.200 --> 0:15:06.640 full time jobs to get me through school and through college. UM. 0:15:06.880 --> 0:15:09.680 And I'm not a huge fan of the black woman 0:15:09.800 --> 0:15:13.280 as martyr kind of a troupe, which is black women 0:15:13.320 --> 0:15:16.520 are martyrs. Black women hold us up. I think we 0:15:16.640 --> 0:15:19.440 need to be flipping things on things on its head, 0:15:19.480 --> 0:15:22.320 which is that we're supporting black women in these roles. 0:15:22.360 --> 0:15:25.920 We're making sure that they have the best maternal healthcare, 0:15:26.040 --> 0:15:29.840 they have better child m care programs, you know, for 0:15:29.840 --> 0:15:33.160 for working moms. UM, they're getting the best of the 0:15:33.280 --> 0:15:37.360 education system and workforce advancement. And through our Black Women 0:15:37.400 --> 0:15:41.240 Onyx research, we just found society failing across a number 0:15:41.280 --> 0:15:47.400 of issues coming up. How hiring practices at the largest 0:15:47.400 --> 0:15:50.800 firms can start to move the needle on income and opportunity. 0:15:51.080 --> 0:15:54.800 That's up next on this Bloomberg Equality Special Achieving Black Equity. 0:15:55.120 --> 0:16:05.840 Shinani Bassek, This is Bloomberg. This is a Bloomberger Quality 0:16:05.880 --> 0:16:09.960 Special Achieving Black Equity. M. Shinnali Bask. The difference in 0:16:10.000 --> 0:16:13.680 prosperity between black and white families in America remains stark. 0:16:14.120 --> 0:16:17.640 For Black Americans to build wealth, incomes also need to rise. 0:16:17.960 --> 0:16:20.200 That means corporate America needs to play a part and 0:16:20.360 --> 0:16:25.280 hiring more equitably while also promoting black managers. One area 0:16:25.400 --> 0:16:29.880 where there's some progress is data on hiring practices. Now 0:16:29.920 --> 0:16:34.080 about of the most prominent companies across the country That 0:16:34.120 --> 0:16:37.120 means firms with at least a hundred workers are making 0:16:37.160 --> 0:16:41.000 employment data public. In the immediate aftermath of George Floyd's 0:16:41.080 --> 0:16:44.200 murder two years ago, the percentage of black managers rose 0:16:44.280 --> 0:16:48.240 marginally by a median of zero point four percentage point, 0:16:48.600 --> 0:16:52.360 while the share of black employees overall also rose slightly. 0:16:52.680 --> 0:16:56.600 The disclosures help keep Corporate America accountable. For example, it 0:16:56.680 --> 0:17:00.200 showed that at Walmart, the largest US employer manage been, 0:17:00.240 --> 0:17:03.920 promotions for Black Americans actually slipped in the twelve months 0:17:03.920 --> 0:17:07.680 through January, Yet more workers moved out of hourly jobs 0:17:07.680 --> 0:17:11.520 into management roles, which means the largest challenges are still 0:17:11.560 --> 0:17:14.600 as employees move up the corporate ladder. Over At Apple, 0:17:14.880 --> 0:17:19.360 the largest company by market value, black representation had declined 0:17:19.480 --> 0:17:23.720 between eight and the company says it's committed to doing more, 0:17:24.040 --> 0:17:26.760 but the numbers will tell us if that promise comes true. 0:17:27.119 --> 0:17:30.960 There appears to be friction at every level. Charles Phillips, 0:17:31.000 --> 0:17:33.919 who works with leaders across corporate America to help recruit 0:17:33.960 --> 0:17:38.199 black workers, says only seventy two of Fortune five hundred 0:17:38.240 --> 0:17:41.440 firms have signed on to work with his organization one ten. 0:17:41.800 --> 0:17:44.240 It should be more, and we're still recruiting mode. So 0:17:44.480 --> 0:17:46.760 I have to call feels all the time that to recruit, 0:17:47.359 --> 0:17:50.320 to selldom on this. So the intry reaction is, well, 0:17:51.119 --> 0:17:53.040 I don't think we have the type of jobs that 0:17:53.119 --> 0:17:55.240 you know where we could really hide these folks because 0:17:55.400 --> 0:17:58.440 we need advanced degrees. In some cases that's no longer 0:17:58.600 --> 0:18:00.439 two that you should be had for it was not 0:18:00.520 --> 0:18:03.840 degrees and rethinking those jobs. So we have to convince 0:18:03.840 --> 0:18:05.840 some at least go back and look at the types 0:18:05.880 --> 0:18:07.600 of jobs to do they really need a college degree. 0:18:08.119 --> 0:18:11.440 And then secondly, the same issue of you know, we'll 0:18:11.560 --> 0:18:13.720 have process and in place, h our people in place, 0:18:13.800 --> 0:18:17.200 and they have been filling the docks pretty well, and 0:18:17.240 --> 0:18:19.560 so I just leave it to them. The good news 0:18:19.720 --> 0:18:22.400 is because of the shortage of talent right now, they're 0:18:22.400 --> 0:18:24.520 starting to reconsider that because they need people. So the 0:18:24.520 --> 0:18:26.480 best thing that happened is what we have right now 0:18:26.520 --> 0:18:29.480 where it's the tight job market where people there's not 0:18:29.600 --> 0:18:33.719 enough employees, and so that forces CEO is to consider 0:18:33.800 --> 0:18:36.520 new pools of talent that they really didn't really, you know, 0:18:36.560 --> 0:18:39.360 to pay much attention to before. Charles Phillips says one 0:18:39.440 --> 0:18:42.280 key way that corporations can boost their ranks is through 0:18:42.400 --> 0:18:46.480 hiring from historically black colleges and universities. A range of 0:18:46.520 --> 0:18:49.919 banks and investment managers have started doing that. Goldman Sachs, 0:18:50.000 --> 0:18:53.240 for example, is dedicating twenty five million dollars over five 0:18:53.320 --> 0:18:57.760 years to HBCUs Well. Senior leaders are spending time training students. 0:18:58.240 --> 0:19:02.280 Goldman's Megan Hogan says it's shift from a longstanding tradition 0:19:02.480 --> 0:19:05.040 of hiring from the ivy leagues. When you think about 0:19:05.040 --> 0:19:09.840 a traditional recruitment model, it is using the alumni base 0:19:09.920 --> 0:19:12.960 of your current employees to find talent. So you know, 0:19:13.040 --> 0:19:17.040 for example, you know I went to Yale University. Personally, 0:19:17.720 --> 0:19:20.240 I know the school well. If I was asked to 0:19:20.400 --> 0:19:22.800 help with hiring, I would want to go back to 0:19:22.840 --> 0:19:26.080 my almal mater potentially. UM, that's not a bad thing, 0:19:26.320 --> 0:19:28.720 you know, I think you know has great students. But 0:19:28.800 --> 0:19:31.360 if you're looking at your current employee base and only 0:19:31.400 --> 0:19:33.440 having them go back to the schools in which they went, 0:19:33.760 --> 0:19:37.400 you're just fulfilling a self fulfilling prophecy, which is that 0:19:37.480 --> 0:19:40.000 you're only going to find potentially the same talent if 0:19:40.000 --> 0:19:43.520 those schools and institutions are not diverse in and of themselves. 0:19:44.000 --> 0:19:46.199 And so what I've seen from my colleagues, you know, 0:19:46.240 --> 0:19:49.399 I used used to head diversity recruiting for four years 0:19:49.440 --> 0:19:52.920 before my role is Chief Diversity Officer, And what we 0:19:53.040 --> 0:19:56.640 really focused on was not just thinking about alumni schools, 0:19:57.200 --> 0:20:02.240 but doubling down on hbc US and partnering, starting in 0:20:03.560 --> 0:20:07.000 with the Congressional Black Caucus. UM to also have some 0:20:07.359 --> 0:20:11.200 very candid discussions about how we showed up credibly to 0:20:11.359 --> 0:20:13.760 these h b c u s. Again, it's not enough 0:20:13.800 --> 0:20:16.400 to write the check and show up on campus once 0:20:16.400 --> 0:20:19.399 a year. What's the sustainable engagement. That's going to make 0:20:19.440 --> 0:20:24.960 sure that students, faculty, administration, university presidents really know that 0:20:25.000 --> 0:20:29.080 these companies are interested in long term impact and sustainability 0:20:29.119 --> 0:20:32.800 with their students, with their alumni, with the institutions and 0:20:32.840 --> 0:20:36.119 the curriculum. That is what's truly needed. And so I 0:20:36.160 --> 0:20:38.560 think I've seen a dramatic difference in terms of that 0:20:38.640 --> 0:20:42.280 focus over the last two years that wasn't necessarily there before. 0:20:42.600 --> 0:20:46.320 So Megan Hogan says, diversity tends to be get more diversity. 0:20:46.720 --> 0:20:49.240 John Rodgers of Aerial Investments is on the board of 0:20:49.240 --> 0:20:53.399 companies including Nike and McDonald's. He's seeing some change on 0:20:53.520 --> 0:20:57.080 corporate boards, and he says adding black and diverse directors 0:20:57.119 --> 0:20:59.720 help set the course for companies not to only hire 0:20:59.760 --> 0:21:04.000 diver as managers, but also diverse suppliers. And I see 0:21:04.040 --> 0:21:06.560 that as we talked to companies and we invest in 0:21:06.600 --> 0:21:09.720 I see that on some of the boards. Um, so 0:21:09.920 --> 0:21:13.199 it's it is uh, it is so disappointing that we 0:21:13.280 --> 0:21:15.720 haven't gotten further along. And I think that's why we 0:21:15.760 --> 0:21:19.560 have to try to find ways that if all progressive 0:21:19.560 --> 0:21:23.919 companies ask all their suppliers to have minority executives and 0:21:23.920 --> 0:21:26.960 the leadership roles on the relationships they have. Those companies 0:21:27.000 --> 0:21:30.119 will start to show up with diverse lawyers, diverse accounts, 0:21:30.119 --> 0:21:34.920 diverse financial services executives, diverse technology because their biggest customers demanded, 0:21:35.200 --> 0:21:38.240 those folks will go out and find diverse people. And 0:21:38.720 --> 0:21:40.879 I just think can't over emphasize how that question just 0:21:40.920 --> 0:21:44.359 needs to be addressed systematically. And it's fascinated me that 0:21:44.440 --> 0:21:46.280 four years ago we did it and we got away 0:21:46.280 --> 0:21:50.440 from it. And to address the landscape systematically, John Rogers says, 0:21:50.480 --> 0:21:52.960 we need a wholesale change. I don't think right, we 0:21:53.000 --> 0:21:56.040 have to break up the system and think about it 0:21:56.040 --> 0:21:59.240 in an entirely different way. And it's just unfortunate that 0:21:59.280 --> 0:22:02.720 people just got so comfortable doing things the way that's 0:22:02.760 --> 0:22:05.280 always been done, even though it hasn't been working. And 0:22:05.359 --> 0:22:07.359 so you look in Chicago again, look at the hundred 0:22:07.440 --> 0:22:10.840 largest companies to Chicago, and there's so few minority CEOs 0:22:10.840 --> 0:22:12.080 and the chop when they jump. I think we have 0:22:12.119 --> 0:22:15.440 to out of a hundred. And you look at again 0:22:15.480 --> 0:22:18.240 the major investment banks, the private major private equicky firms, 0:22:18.440 --> 0:22:22.280 major venture capital firms. Very few women in leadership roles. 0:22:23.040 --> 0:22:25.159 And the most important thing here that's the part of 0:22:25.160 --> 0:22:26.720 the economy that I said earlier, where the wealth in 0:22:26.880 --> 0:22:29.760 job to being created. The big banks will have diversity, 0:22:30.240 --> 0:22:33.040 The big insurance companies had diversity. They during the Civil 0:22:33.119 --> 0:22:35.280 rights movement. People pushed them to do the right things. 0:22:36.200 --> 0:22:38.920 But these industries now where all the growth, that's where 0:22:38.960 --> 0:22:41.920