Four ways to help close the racial wealth gap in the U.S.
JPMorgan Chase announced a new $30 billion commitment over the next 5 years to advance racial equity, especially for Black and Latinx Americans.
Why it’s important: Systemic racism has contributed to low and lost wages, rising costs of homeownership and barriers to small business creation, which have stunted economic opportunity for Black and Latinx communities in America – and COVID-19 has only made things worse.
What JPMorgan Chase is saying:
"We can do more and do better to break down systems that have propagated racism and widespread economic inequality, especially for Black and Latinx people.”
– JPMorgan Chase Chairman and CEO Jamie Dimon
The firm will harness its expertise in business, policy and philanthropy to provide economic opportunity to underserved communities, especially the Black and Latinx communities.
● Building on existing efforts, the company’s commitment is focusing on 4 areas to help break down barriers of systemic racism and drive an inclusive recovery.
● Promoting affordable housing and homeownership for underserved communities.
The challenge: Homeownership rates are 25% lower for Black and Latinx families than white families. Additionally, their households are more likely to be cost-burdened than white households.
JPMorgan Chase will take actions to increase equity and access by:
● Expanding financing to preserve affordable rents
● Increasing down payment and closing cost assistance funds for purchased and refinanced loans, and increasing availability of affordable lending products.
● Advocating for comprehensive housing policy reforms to increase access to homeownership.
● Increasing funding for the construction and rehabilitation of affordable housing for low- and moderate-income households by $2 billion.
● Finance 100,000 additional affordable rental units in underserved communities.
● Originate 40,000 new home purchase loans for Black and Latinx households.
● Help additional 20,000 Black and Latinx families achieve lower mortgage payments.
● Growing Black- and Latinx-owned businesses.
The challenge: Minority small business owners face barriers to grow and scale their businesses.
● Key number: Black people represent nearly 13% of the U.S. population but only 4.3% of the country’s small business owners.
JPMorgan Chase will deliver $2 billion in loans to Black and Latinx communities and support their small businesses by:
● Providing an additional 15,000 loans to small businesses in majority – Black and -Latinx communities.
● Helping minority entrepreneurs access 1:1 coaching, technical assistance and capital.
● Accelerating a digital lending product to better support the needs of small Black- and Latinx-owned businesses seeking quick access to capital.
● Advocating for SBA reforms and new aid for small businesses impacted by COVID-19.
● Improving financial health in Black and Latinx communities.
The challenge: The racial disparities in the financial health of Black and Latinx households make it harder for them to achieve financial stability, meet long-term goals and build wealth.
● Black and Latinx families have 32 and 47 cents in liquid assets for every $1 held by white families.
JPMorgan Chase will take action to help one million people open new low-cost checking or saving accounts and reach their financial goals. Additionally, the firm will:
● Hire 150 community managers and opening new Community Center branches in underserved communities.
● Engage and enroll new customers in money management tools.
● Support Black and Latinx-led financial institutions with up to $50 million in capital and deposits.
● Advocate for federal policy on wealth building and savings so that traditional employment benefits are tied to workers.
● Building a more diverse and inclusive workforce.
The opportunity: Young workers feel that most business leaders are not truly committed to creating an inclusive culture, according to research.
"We have a responsibility to intentionally drive economic inclusion for people that have been left behind… This moment is a catalyst to create change and build an economy that creates and sustains opportunity and racial equity for Black and Latinx communities.”
– JPMorgan Chase Global Head of Diversity and Inclusion Brian Lamb
JPMorgan Chase has committed to building a more equitable and representative workforce, and support solutions and job training to advance racial equity in the workforce, including:
● Recruit, retain and develop diverse talent across all levels of the Firm
● Providing new financial coaching services for all U.S. employees to further invest in their own financial well-being.
● Investing in early-stage companies developing innovative models that create more opportunities in underserved communities.
● Businesses with diverse leadership generate 19% more revenue than non-diverse companies.
● Diversity also helps reduce turnover, with nearly 70% of millennials reporting they would continue to work at a company for over five years if it’s diverse.