The business of addressing poverty.
by Carla Javits
Spurred by the 50th anniversary of President Johnson’s announcement of a ‘war on poverty’ – there has been more public discourse on the topic than we’ve heard in years. Predictably there have been a wide array of policy prescriptions with people across the spectrum from Senator Rubio to Maria Shriver weighing in.
My view: the unfinished business of the war on poverty is jobs. Specifically three issues: creating more jobs, connecting jobs to people who need them, and wages and benefits that can take people out of poverty.
I’ve been surprised that in the discourse of how to reduce poverty, there’s been so little discussion of not only job creation and access to jobs, but also the promising developments happening outside of mainstream government and social service programs – some of it replicating what’s been done at greater scale outside of the U.S.
Since 1997, the focus of REDF’s work has been job creation and pathways to employment for those facing the greatest barriers to work. Founded by George R. Roberts, REDF developed a business approach to solve a social problem. That approach is social enterprise, businesses with a social purpose, that create jobs explicitly to employ people who are otherwise shut out. What we’ve learned in the past 16 years has been this – far more people want to work and are capable of it, they only need the opportunity to transition back into the workforce.
Bill O’Reilly summarized that assumption when he said, “Every American can work hard, and if you do, you will make money. Every American can practice self-respect, and if you do, people will hire you. But if you are dishonest, embrace intoxicants, conceive children you can’t support, act in a crude, disrespectful way and generally believe that you are owed prosperity – poverty may well come knocking. And all the President’s men can’t prevent that.”
However, what O’Reilly fails to take into account is not only how many of us are vulnerable to these problems – including many who are working and not living in poverty; but more importantly, he does not acknowledge that many people come to a point when they are ready to change, but face a job market that is quite unforgiving when that moment arrives – especially for those with few connections to other working people.
REDF has invested financially and provided business advice and consulting support to more than 50 social enterprises. As a result, 8,000 people in California who have been homeless or incarcerated, struggled with addiction or mental health illness have had a chance to work, and the social enterprise businesses have earned over $140 million in revenue. Private, for profit companies have procured goods and services from these companies helping them grow so they can employ more people, and have hired the most successful of the social enterprise graduates. Some have paired up with community colleges for skills-based training that has further increased their employability.
These kinds of social enterprises are a little known but powerful outgrowth of policies implemented in the 1960’s and 1970’s, leveraging public policies, private initiative and other resources to create jobs and revenue streams. They exist in many communities throughout the U.S., from Los Angeles to Chicago, Denver to New York, Indianapolis to Atlanta and represent a wide array of businesses including landscaping, screen printing, construction, manufacturing, and building maintenance to name a few. All told they employ at least 150,000 people and generate billions of dollars of revenue.
Several for-profit companies have also taken steps to expand the employment of young people and adults who would otherwise struggle to enter the workforce. They have stepped up to create job opportunities and work with nonprofit social enterprises, workforce development and alternative staffing service organizations to hire and support people who would otherwise be excluded due to their background or lack of experience.
These companies are motivated by multiple factors. First and foremost, they need prepared workers. They struggle with the costs, retention, and sourcing of qualified front-line staff. In addition, their top talent and many consumers increasingly demand a clear program of positive contributions to society in exchange for their loyalty. Lastly, those companies operating in sectors that are publicly regulated have to respond to the demands of officials and communities for local hiring.
If we are to show that the wealthiest engine of democracy and capitalism in the world can offer a good life – the American Dream – to all Americans, it is time to get real and focus on the economic growth, job creation, and support to working people that will really deliver the opportunity to work to everyone who needs it and wants it; and the income and access that offers a decent life above the poverty level to those who do work.
There is still a long way to go before the ‘win/win’ approach creates a sufficient number of jobs, and opportunities for those who need them the most. With conservative Ron Unz backing an initiative to boost the minimum wage in California, an economy that is finally starting to create jobs again, and companies seeking to have a positive impact on their communities – now is the time. When we get serious, poverty loses, people win.
I am looking forward to continuing this debate and check back soon to read other leaders in the field write about creating jobs and pathways into the workforce: cautionary tales and insights from the War on Poverty through the Great Recession to today.
If you missed reading the first 2 parts of this blog series, you can find them here.
Carla Javits is President and CEO of REDF. Since its founding in 1997 by George R. Roberts of KKR, REDF has helped thousands of people in California get jobs by providing funding, business expertise and access to networks to social enterprises—"double bottom line" businesses that create jobs in order to employ individuals facing the greatest barriers to employment.