The average net wealth of a White family in America is 10x greater than the average net wealth of a Black family. Let that sink in.
In this episode, Tunua sits down with two experts to explore the topic of Coronavirus resiliency and racial inequity, especially during this unprecedented time.
Joining LISC LA for this conversation are:
Maurice Jones, the CEO and president of LISC National.
In this episode we explore:
{2:34} What Project 10x is and why it is so critical in this very moment
{7:20} How leaders can shape public health and economic policy in a way that addresses the past and present impacts of systematic racism
13:43} How LISC has been and will continue to be a driving force for helping close the wealth gap between Black and White families
{18:33} How the pandemic has impacted Black businesses and entrepreneurs
{23:24} How Project 10x will impact the intersection of racial inequality and public health
And so much more
About our panel:
Maurice A. Jones was appointed CEO and President of the Local Initiatives Support Corporation (LISC) in September of 2016. LISC is one of the country’s largest organizations supporting projects to revitalize communities and catalyze economic opportunity for residents. Prior to joining LISC, Maurice was the Secretary of Commerce and Trade for the Commonwealth of Virginia where his primary job was to utilize Virginia’s assets to solidify its position as the preeminent place to live, work and conduct business.
Maurice previously served as Deputy Secretary for the U.S. Department of Housing and Urban Development (HUD) from April 2012 through January 2014. As the second most senior official at HUD, Maurice managed the Department's day-to-day operations, the annual operating budget of $40 billion and the agency's 8,900 employees.
Before his appointment at HUD, Maurice was President of Pilot Media, the largest print and digital organization in Hampton Roads, Virginia. He joined Landmark Media Enterprises, owner of Pilot Media, in 2005, serving as Vice President of the Landmark Publishing Group. In 2006, he became the Vice President and General Manager of Pilot Media, and in 2008 he became President and Publisher of The Virginian-Pilot.
Maurice also served as the Commissioner of the Virginia Department of Social Services and Deputy Chief of Staff to then-Virginia Governor Mark R. Warner. Other positions include: Special Assistant to the General Counsel at the U.S. Treasury Department, Legal Counsel to the Community Development Financial Institutions (CDFI) Fund and Director of the Fund during the Clinton Administration, Associate Attorney at Hunton & Williams in Richmond, Virginia, and Partner at Venture Philanthropy Partners.
Maurice received a Bachelor of Arts in Political Science from Hampden-Sydney College and attended Oxford University in England on a Rhodes Scholarship, where he received a Master of Philosophy in International Relations. He later received a Juris Doctor from the University of Virginia.
Andre M. Perry is a senior fellow in the Metropolitan Policy Program at Brookings, a scholar-in-residence at American University, and a columnist for the Hechinger Report. He is the author of the book Know Your Price: Valuing Black Lives and Property in America’s Black Cities, which is currently available wherever books are sold. A nationally known and respected commentator on race, structural inequality, and education, Perry is a regular contributor to MSNBC and has been published by The New York Times, The Nation, The Washington Post, TheRoot.com and CNN.com. Perry’s scholarship has been featured on HBO, ABC, CNN, PBS, National Public Radio, NBC and in the Wall Street Journal. His research focuses on race and structural inequality, education, and economic inclusion. Perry’s recent scholarship at Brookings has analyzed Black-majority cities and institutions in America, focusing on valuable assets worthy of increased investment.
Tunua 00:14
Welcome to the ChangeMakers LA podcast. My name is Tunua Thrash-Ntuk and I'm the Executive Director of the Local Initiative Support Corporation Los Angeles office. In today's episode, we'll be talking about some strategies for investment and forward movement in communities with two very special guests.
Tunua 00:32
I'm happy to be joined today by the national president and CEO of LISC Mr. Maurice Jones. This recently rolled out a program called Project 10 x, which is an ambitious $1 billion strategy designed to root out and address racial inequity across the country with a focus on capacity building, affordable housing and racial equity, the program will invest in BIPOC communities to tackle the vast difference in wealth between people of color and their white counterparts. Maurice, thanks for being on today.
Maurice Jones 01:06
Thanks for having me Tunua. It's nice to be with you and nice to be with Andre.
Tunua 01:10
Yes, let me introduce our other guests we have here today.
Tunua 01:13
Also with us is Andre Perry. He's a fellow in the Metropolitan Policy Program at the Brookings Institution, and a columnist for The Hechinger Report, and a scholar in residence at American University.
Tunua 01:27
His recent book, Know Your Price: Value in Black Lives and Property in America's Black Cities, is a thoughtful analysis of the economic and social devaluation of black lives and communities in America. Andre, thanks for being on with us.
Andre Perry 01:42
Oh, it is a pleasure Tunua and also a pleasure to be with Maurice.
Tunua 01:46
Great. So let's turn to our conversation, because I know our listeners are very excited to have the two of you on with us today.
Tunua 01:54
So with the protests occurring across the nation, as the pandemic continues, there's a lot of talk about racial inequality, police brutality, social and economic justice. And today, we're gonna dive into those topics and talk about the work that LISC and our partners are doing around this critical moment.
Tunua 02:13
And Andre, we're gonna dive into what some of your research and experiences and what you think about sort of the current conditions that are plaguing the Black community, and really all communities across the US.
Tunua 02:25
So Maurice, I've mentioned already this concept of Project 10 X, can you tell our listeners a little bit more about that, what the impetus for this strategy is and why it is so critical in this very moment?
Maurice Jones 02:38
Sure, well, let me just give you the background. So if you look at what's happening in the country today, across the board, the average net worth of a White family in America today is 10 times greater than the average net worth of a Black family, thus 10 X.
Maurice Jones 03:00
In addition to that, we work as you know, Tunua, across about 36 local offices. And if you look in every single last one of these offices, what you will see is that the life expectancy gap between the places where we work, which are census tracks, overwhelmingly inhabited by black and brown folks and then the more wealthy census tracks overwhelmingly inhabited by white folks, the life expectancy gap is at least 10 years difference.
Maurice Jones 03:36
In fact, in many places is 20 years, and in some places across the country, it's 30 years difference. So you can have people living 10 minutes away in the same town and the life expectancy gap is 30 years or 10 years or more and the overwhelming reasons have nothing to do with whether they were both born in the same hospital or not, it's the conditions under which people are living.
Maurice Jones 04:05
The other piece for us that really sort of highlights 10 X or motivates 10 X is we know that if you're going to address these gaps in wealth, and health and in opportunity that are breaking down by race and place, you got to be at this work at least 10 years and we'd like to say you also have to be thinking in multiples of 10. You've got to invest in multiples of 10.
Maurice Jones 04:34
So we've got a billion dollar project here that we are launching that we launched a little over a week ago. The idea is to invest in those levers that really are the most powerful when it comes to advancing health and wealth and opportunity.
Maurice Jones 04:53
So it's about home ownership and small business ownership. That's one block. It's about credit and capital access, in building up the financial institutions, BIPIC led banks and credit unions that have as their primary market, black and brown people. That's the second link.
Maurice Jones 05:14
The third lane is about advancing good jobs using our capital to invest in companies that are going to provide jobs with livable wages and benefits.
Maurice Jones 05:24
And then the fourth is addressing those institutions or those enterprises within a community that really build well. Schools, health care centers, broadband, those kinds of things.
Maurice Jones 05:40
And then for us, the last one is safety and justice, though we picked those five areas. So those are the four lanes that make up the substance of what we call 10 x, we're going to invest over a 10 year period, we want to do a billion dollars, we're in the midst of fundraising, we've got some commitments now, in fact, our own commitment of 20 million to it and we want to be at this with partners for the next 10 years.
Maurice Jones 06:08
We think if we can do that, at that scale and for that kind of longevity, that we can really move the meter when it comes to closing racial wealth, health and opportunity gaps. That's what 10 x is about.
Tunua 06:22
Wow Maurice, you were able to break that down pretty quickly. But clearly, the idea that there is a clear connection between the health of communities and the wealth of communities and the amount of wealth that's available and all the strategies that you've mentioned are strategies that LISC and other entities have worked on but putting that billion dollar naming it as project 10 x, saying you've got to invest for the long term, and in a variety of areas is really critical to being able to see some movement and to see some success.
Tunua 06:55
So part of why we're even at this point is because of issues around let's just say segregation and Maurice, you talked about the fact that people who could be born in the same hospital, but yet have different outcomes in terms of their life circumstances.
Tunua 07:11
And Andre right now, you recently wrote about segregation, as a form of social distancing. That's a term that we're using right now, because of COVID-19, which has led to these economic and physical sicknesses in black communities, some of which Maurice just talked about, how can leaders shape public health and economic policy in a way that addresses the past and present impacts of systematic and structural racism?
Andre Perry 07:39
Yeah, we should do a little bit of a history lesson on this, because remember, redlining actually began in Baltimore in 1910. When that then Mayor basically said, we're going to isolate Blacks in areas to prevent them from spreading disease and crime in areas.
Andre Perry 08:02
Now, what's interesting, that same philosophy was picked up by the federal government, obviously, redlining occurred there, and you see the impact of it on Black Americans today. Now, we know the material loss, that redlining caused, that the redlining prohibited black people from getting low interest loans, getting downpayment assistance, and therefore, those families could not pass down, the equity that's gained in their home over time to their children and their children cannot pass it down to their children and that helped create the wealth gap that 10 time difference that Maurice talked about.
Andre Perry 08:50
But fast forward to 2020. It's funny, when I hear business owners talk about we need federal relief. I mean, after a few weeks, you heard business leaders shouting, that the federal government, federal government has to step in, well try being socially distanced for generations.
Andre Perry 09:11
What does a response look like then? Blacks have been distance in terms of housing support, business investment, infrastructure investment, in fact, many of the infrastructure policies of the past barreled through or created highways, demolishing, actually black infrastructure and business development and Black neighborhoods and that still with it so that wealth gap that Maurice described is a symptom of the historic discriminatory policies that impact the black community.
Andre Perry 09:45
So moving forward, we should be trying to restore the value that's been extracted by racism. Then just briefly, you know, one of my major studies I looked at that's the sort of the anchor of my book Know Your Price is that I look at home prices in Black communities where the share of the Black population is greater than 50% and I compared them to areas where the share of the Black population is less than a percent.
Andre Perry 10:09
And I controlled for education, crime, walkability, all those fancy Zillow metrics so that we could get an apples to apples comparison and what we found is that homes equivalent homes now in Black neighborhoods are underpriced by 23%, about 48,000 per home, or cumulatively, there's 156 billion in lost equity.
Andre Perry 10:33
That 156 billion could have finance more than 4 million businesses based on the average amount Blacks use to startup their firm. It could have financed more than 8 million college degrees based on the average amount of a public four year education, replaced the pipes in Flint, Michigan 3000 times over, more than doubled the annual economic burden the opioid crisis.
Andre Perry 10:55
It's a big number and so when we're talking about these policies, and the reason why I love what Maurice is talking about because this is happening in business. This devaluation is happening in housing, it's happening in education, and we've got to figure out ways to invest in those areas.
Andre Perry 11:11
And the reason why I do the research the way I do, I want to show the strength in Black community. The homes in Black neighborhoods are strong, stronger than they are priced.
Andre Perry 11:22
Business leaders are worth more than they are priced. Leadership in general, is devalued. So for me, it's about restoring the value that's been extracted by racism to solve a lot of these problems.
Tunua 11:37
The power in the concept now of social distancing, is one that people and most people right now in our country can relate to, right?
Tunua 11:46
They've been social distanced from their economic centers and jobs and opportunities and when you you know we're crediting you with this idea that making that connection, Black people have been saying for generations and hundreds of years that we are social distance from opportunity, and I love how you put that in housing, and being able to have the equity to start, you know, jobs and to start businesses and to be able to move forward economically.
Andre Perry 12:15
And even in the PPP loan fiasco, we saw a social distancing in the policy that is supposed to address the economic loss as a result of social distancing. Remember, 95% of Black businesses did not receive that PPP loan subsidy when it was rolled out initially and then they tried to do everything to backfill, but at that point, the damage was done.
Andre Perry 12:43
And so for me, it is about providing access, where it's been denied, historically, overcome.
Tunua 12:50
So when I hear the $1 billion number, when I first heard it at the top of the conversation, I said, Wow, that's huge, that's ambitious Maurice, you know, we can do this, can we do this, but we got to do this and then I hear the billions of dollars, you're talking about Andre, this is 100 billion or so that you in terms of value that you're saying has been extracted, and not been made available to the Black community.
Tunua 13:14
And Maurice, you often talk about how in order for us to really extend and reach our full humanity is what you call it, so that people regardless of race, regardless of background, have a chance to be able to be part of the American dream. We've gotta invest in the affordable housing that LISC does in growing small businesses.
Tunua 13:36
Right now, this is so critical to the moment. How has LISC been a part of moving that mission forward right now?
Maurice Jones 13:45
I think the work that Andre is talking about is so powerful. I saw a data point, which suggests that if we actually could close the wealth gap between Whites and Blacks between now and 2026, I believe. I think it was an eight to 10 year frame, that it would actually add one trade into $1.5 trillion to the GDP of the country, right?
Maurice Jones 14:20
So this is to Andre's point, this is critical for communities of color, but it is critical for the American democratic experiment and so what we've been trying to do at LISC is to with intentionality, invest in those assets in these Black and Brown communities and these low wealth communities, these rural communities as well, that we know are undervalued and that we know will produce the kinds of opportunities for full humanity that you're seeing in zip codes that are dominated by Whites, and it's just that simple.
Maurice Jones 15:09
So what we've been doing is investing in small businesses. So Andre mentioned the PPP piece. So we were a PPP lender. We got in in the second round. We made sure that what we were going to do with respect to PPP is invest in businesses led by people of color. Businesses who did not have relationships with the mainstream financial institutions that were the biggest players in the first round.
Maurice Jones 15:09
So if you look at our PPP portfolio, for example, we have lent about $50 million via PPP. Well, about 95% of our borrowers are businesses led by people of color, about 85% are businesses led by women, about 85% or so our businesses working in low wealth communities.
Maurice Jones 15:39
The overwhelming bulk of our businesses are 10 people and fewer, with average annual revenues of a million dollars or less, which makes up the bulk of Black owned businesses, of businesses led by people of color that we have across the country.
Maurice Jones 16:24
So what LISC has been doing is with intentionality, focusing on Black and Brown communities in low wealth communities, urban and rural, across the country with housing and small business and health and that's the work that also will form the basis of Project 10 x moving forward.
Maurice Jones 16:50
I mean, to Andre's point, one of the things that I was doing before COVID was traveling to our 30 some markets, in almost every market, people could take me down a highway or road or an avenue that had been intentionally driven there or placed there or constructed there to interrupt, in all honesty, a Black business corridor or Black residential corridor and this was intentional.
Maurice Jones 17:25
This was to Andres point and effort to isolate the Nlack community. Well, as I say to folks, you can't address something that was done intentionally using race by not being intentional using race, you have to be just as intentional if you're going to reverse if you're going to grow as we were in discriminating and hurting communities and that's what LISC has been trying to be a part of.
Tunua 17:57
That's great. And Andre, this, I mean, you and Maurice have really started going down this line of the importance of the Black business, right? I know that there's research out there that talks about the importance of Black business ownership, what it does to Black wealth, what it does to Black jobs, what it does to Black communities.
Tunua 18:17
And Maurice, you know, has talked about what happens when that disinvestment gets disrupted, so for you, you know, you've researched the impact of this pandemic on Black businesses. How does this intersection of already heightened economic vulnerability and this pre existing racial wealth gap affecting businesses and entrepreneurs right now?
Tunua 18:38
But to some extent, Maurice has summed up with, he told us that if we could close this racial wealth gap, how much more we'd be experiencing an economic opportunity, but what it meant to the larger community, what does that impact when Black businesses don't exist where their capital constrained or not able to really get access to opportunity?
Andre Perry 18:58
You know, as I mentioned, the Black community represents about 13-14% of the population in America but only 2.2% of employer firms so there's only 2.2% of firms with at least two employees that are black owned.
Andre Perry 19:16
Now, if the percent of employer firms match the population, there would nearly be 750,000 more Black companies in the United States.
Tunua 19:31
When you say employment, you mean companies that are owned by Black people that have employment?
Andre Perry 19:37
That's at least two employees. Now, I'll put in another one. Currently, Black firms bring in an average revenue of 1 million compared to non Black firms that bring in 6.5 million.
Andre Perry 19:51
Now if Black firms increase their average revenue to the level of non Black firms that would increase total revenue in Black businesses by 800 billion dollar 800.
Andre Perry 20:03
Now, so we're just talking about equity here, you know, we're talking about what if what everyone else got, and/or met the population up there.
Andre Perry 20:12
I'll throw two more at you. Black owned employer business has created an average of 10 jobs per firm compared to 23 for Non black. If the average employees per Black firm increase to the same level as non Black businesses, 23 million new jobs would be created. 23 million new jobs and Black owned firms pay on average of 30,000 for their employees compared to non Black firms average of 51,000 per employee.
Andre Perry 20:45
So if Black firms paid the same as non Black firms, there would be $26 billion dollars increased pay in the economy. So all those numbers that I just shared, don't benefit the Black community, it impacts the entire country.
Andre Perry 21:05
So we're cutting our notes and spiting our faces every time we don't invest in Black business. And no, I just want to be clear. This is not like a situation where you're taking from White people by investing in Black people.
Andre Perry 21:21
There's this idea of scarcity that some folks are preoccupied with, they say, why are you giving black people, when in fact, out of the colorblind approaches, they're actually rewarding White people, by default, but we can talk about that later.
Andre Perry 21:39
But I just want to be clear, roll the pie, you're not eating away from our population, you're adding to the economy, adding to innovation, adding the number of innovators, adding the number of businesses, you add when you invest in Black firms and in Black communities because my work largely examines underappreciated asset, meaning if you just add water, they will grow.
Andre Perry 22:08
Now, the places where you if you add water, they will grow our Black majority communities, and Black and Brown entrepreneurs, we need to get the water to them, we need to make sure that they're invested in at levels commensurate to their peers.
Tunua 22:27
I mean, when I hear that, I think it is important to keep underscoring this idea that we are growing the pie, right? The work of LISC, the work of investing in under invested places, and people and businesses is all about growing the pie.
Tunua 22:42
We're not even at the point of dividing it up and figuring out who gets it just yet but let's, let's add the water and see what we get.
Tunua 22:49
And you know, Maurice, part of what Project 10 X is all about is, to me, it's testing out the idea that if we invest a considerable amount in the communities that need it most in the areas that you described with housing, small business, safety, all health, all of those areas for an extended period of time, then we can have sort of the impact that we want to see and test it out and see how this grows out.
Tunua 23:19
How do you see Maurice Project 10X impacting the intersection of racial inequality and public health and being able to be a testing ground for making the difference on the investments that we need?
Maurice Jones 23:33
Yeah, well, we know that the connection amongst wealth and health and opportunity, is that close right? That they go hand in hand and so if you look at health, let's just take health as an example. If you look at health, much of the public debate is about access to clinical settings and whether people have insurance that will allow them to pay for treatment by clinicians.
Maurice Jones 24:10
And that's great and don't get me wrong, we need much more of that. However, that's 20% of the determinants of one's health. 80% of the determinants of one's health and lifespan is what happens outside of the clinical setting. It's do you have a healthy and affordable and a stable home to live in?
Maurice Jones 24:37
Its do you have a job that pays you a wage that allows you to pay for the things that you need? Housing, food, education.
Maurice Jones 24:50
It's do you live in an environment where your full humanity is respected so that you're in not living with the stress of discrimination, and racism, and barriers? All of these are actually the prime determinants of health.
Maurice Jones 25:13
And so we know that if we can invest in advance, wealth and health, an opportunity that they actually move lockstep together. If we move wealth, we will move health, if we move opportunity, we will move wealth aand so that's why we've tried to take a pretty holistic approach to this thing, and to really, really break down the four corners that we think you have the most invest in, and to do so at scale. That's really the, if you will, the hypothesis of Project 10 X.
Tunua 25:51
Fantastic. Thanks for sharing all that Maurice, and making the connection between health and wealth.
Tunua 25:56
Andre, I was going to close with you just sharing with us over the last few months, the work of folks like you, the work of folks like LISC, and like Reese's been able to birth in terms of Project 10x, but your work already has been focused on making sure that there's racial justice and opportunity.
Tunua 26:15
There's been a lot of protests and a lot of conversation on this topic. What do you think that that means in terms of the hope for the future, about your research and other scholars who are talking about these things? We've got the empirical data on this stuff. What impact is that going to have on our economic health policy going forward?
Andre Perry 26:34
Well, I actually love the fact that folks are in the streets protesting, risking their lives, obviously, we're still in the midst of pandemic but, you know, you hear the commentary.
Andre Perry 26:47
Some people say, pay protests are nice, but you need policy, the reality is that you have to have both. That no one gets the kind of policies we need without people making a demand and so what I see in the streets, is giving me an opportunity to present data, and research and policy work in a way that, quite frankly, no one would listen to before people hit those streets.
Andre Perry 27:19
And so you need the folks who are demanding justice in the streets so that the work of Maurice and me can really catch hold, because the racial uprising, excited capital release, at least from corporate America, like we've never seen before.
Andre Perry 27:39
And so I'm appreciative of it but I will say that that window is going to close. It's going to close pretty quickly and so we need to make sure this new Biden administration picks up where business and philanthropy started investing in Black communities and people see these large numbers, I mean, we're talking hundreds of billions of dollars being led out on behalf or not maybe not hundreds, but certainly, lots of billions.
Andre Perry 28:12
JPMorgan and Chase announced 30 billion, there's several companies with their billion dollar initiatives.
Tunua 28:20
100 billion hundreds of billions we'll claim that.
Andre Perry 28:22
That's right. That's right. But that would have never happened without people making demand and so we should be encouraging that same activity that excited those investments that saw a change in the White House, those things must continue.
Andre Perry 28:43
And I know a lot of people want to see, or they want to go back to "normal" but normal wasn't working for us. It wasn't.
Andre Perry 28:52
And so we need to see the regular investment in Black people, Black communities, Black firms, Black housing, because this has been denied for decades, for decades, that social distancing, has existed for decades, and we have now an opportunity to change the way we look upon and invest in Black people.
Tunua 29:16
That's great. Well, I feel like so I'm going to close it out here. The change in the you know, sort of awakening that we've experienced in 2020 in our country has helped bring some people to be able to see some of the data that you and Andre have been researching and pulling together and writing about for many years and decades.
Tunua 29:34
Maurice, it is a moment at a time like this, that you happen to be head of LISC nationally, which gives rise to the moment of being able to really look at how do we reinvest? Where do we take that energy of needing to reinvest in places that have been social distanced, that have been without opportunity, that have been without the access to wealth to close that racial wealth gap with Project 10 X, and we're proud that we've got that initiative moving forward.
Tunua 30:01
Gentlemen, I want to thank both of you for joining us this week on the Changemakers ;A podcast. It's been great listening to you, learning from you and thinking about issues that are impacting communities today.
Tunua 30:12
We appreciate all of you out there who are with us who have joined Maurice, Andre and I as listeners. If you've enjoyed this episode, we'd love for you to subscribe to the podcast so that you're notified of new episodes. Please do share this episode with your colleagues. And thank you for listening today. Gentlemen, thanks for joining us.
Maurice Jones 30:31
Thanks. Thanks for having us.
Andre Perry 30:33
Thanks for having us.
Tunua 30:34
This episode of Changemakers LA was made possible by our partner Wells Fargo Foundation.
Tunua 30:40
If you'd like to learn more about how we provide capital support for small businesses at LISC-LA, please visit us online at www.lisc.org/los-Angeles and follow us on Twitter at LISC_LA.
Tunua 30:56
You can find the rest of the series on iTunes, Spotify and Google podcasts. Subscribe to hear more conversations about the people and places that shape Los Angeles.