Key learnings on the theme of economic mobility
NationSwell’s 2023 Summit brought together the most cutting-edge and committed leaders in ESG, social impact, philanthropy, and other select fields. Across a full day of programming, participants elevated exciting and promising ideas and initiatives, reflected and revitalized, and gleaned actionable insights, practices, and collaboration opportunities to propel their leadership forward.
One of the main themes of the day was economic mobility, through which presenters and guests explored how to better center their values, prioritize human connection, and bring forward a “Better + Bolder” version of themselves.
Below are key learnings from the NationSwell Summit on the theme of economic mobility.
We have a collective responsibility to overcome the fallacy that decision-making, rather than circumstance, is responsible for an individual’s poor financial health.
Professor Darrick Hamilton (Henry Cohen Professor of Economics and Urban Policy and founding director of the Institute on Race, Power and Political Economy, The New School), in his opening remarks at the NationSwell Summit, reminded us that the tendency to blame poor decision-making over environmental factors like weak systems and structures is a common cognitive bias called fundamental attribution error. To move past this error, Professor Hamilton urged us to dismantle the policies that deny people opportunities to make the right choices and redirect resources to communities in order to provide the enabling conditions for marginalized groups to become self-determining and overcome poverty. Professor Hamilton spoke of baby bonds as one particularly bold and promising solution, describing the appreciating asset as “economic birthright to capital” available to all regardless of circumstances at birth.
Through strategies like employee ownership, business has the capacity to de-stratify our society where other institutions have failed.
On a Practitioners’ Panel on Economic Mobility, Pete Stavros (Head of Global Private Equity, KKR) offered that solutions like employee ownership models are effective at improving financial outcomes for workers. Stavros emphasized that the average American does not have enough assets to invest, in turn limiting their opportunity to develop financial management skills. Through KKR and his nonprofit Ownership Works, Stavros advocates for and has implemented a model in which businesses issue stock as a free benefit to employees, pairing ownership with financial literacy programs, as a mechanism to create a true win-win for the company, its investors, and its workers. Results to date have shown that employee ownership can lead to better employee retention, increased productivity, a higher ROI for the business, and significant wealth creation for workers. But, Stavros emphasized, the work of employee ownership programs is not as elegant and simple as it may first appear, requiring significant commitment and hands-on involvement from company leadership.
Employers are determinative of economic mobility for their workers; it’s time for businesses to better understand their impact and to take charge of that responsibility.
In presenting the American Opportunity Index Corporate Scorecard, Rajiv Chandrasekaran (Head of Policy + Strategy, The Emes Project) presented evidence that a company’s practices are determinative in lower-income workers’ ability to escape poverty. Chandrasekaran highlighted three dimensions of a company’s opportunity to impact workers’ economic mobility, particularly for those without college degrees: (1) the access they offer to employment opportunity, (2) the pay they offer in low- and middle-skill roles, and (3) the level of mobility experienced by employees both within and beyond the firm. The American Opportunity Index Corporate Scorecard offers a first-of-its-kind look into the actual performance of the United States’ largest 250 companies on worker economic mobility and provides an evidentiary basis for employers to look inward at the practices and behaviors that do or do not facilitate that mobility.
- Good data is essential for improving economic mobility, but its efficacy is significantly constrained without the right narrative and storytelling.
In a Practitioners’ Panel on Economic Mobility, Michael Tubbs (Special Adviser for Economic Mobility and Opportunity, Gov. Gavin Newsom) asserted that “data is interesting and important, but if data actually drove decision-making, our work would be the opposite of what it is today.” Tubbs’ point is that we already have compelling data to support work on climate action, economic mobility, and more, but the decisions of policy-makers and others in power often defy the conclusions of that data. Tubbs called upon leaders to focus on shifting the narrative and storytelling around how the economy works in order to provide cultural and social momentum behind solutions like baby bonds and universal basic income.
- Funders can advance racial equity by making large, unrestricted, multi-year grants to BIPOC-led organizations.
Given that historical and intergenerational effects of systemic inequity are central to the complexities of solving for economic mobility, Terri Ludwig (President, Ballmer Group) highlighted the need for the trust-based philanthropy principles of long-term solutions, multi-year unrestricted funding, and shifting decision-making power to BIPOC leaders proximate to the problem. For its part, Ballmer Group makes 10 year investments in its grantees, and also funds organizations like New Profit and Echoing Green to ensure that capital makes it into the hands of leaders who have traditionally been starved of that access.