Editor’s Note: Mellody Hobson is a board member of JPMorgan Chase, the president of Ariel Investments and a member of the Advancing Black Pathways Advisory Council. Jamie Dimon is the chairman and CEO of JPMorgan Chase. The opinions expressed in this commentary are their own.
For all the positive economic trends in America, the racial wealth gap continues to prevent growth from benefiting everyone. While this is not a new crisis, it is one we must urgently address so that economic opportunity is equally extended to black Americans.
Racism, intolerance and poverty strangle economic opportunity. The racial wealth gap is stark: For single black Americans, the median wealth is $200 to $300, compared to $15,000 to $28,000 for single white Americans. This divide undermines financial stability for many black Americans.
Closing the racial wealth gap is good for Americans, and it makes good business sense. We know employees from diverse backgrounds offering different perspectives drive better corporate outcomes. A recent study showed that businesses with diverse leadership generate 19% more revenue than non-diverse companies.
Diversity can also reduce turnover. Nearly seven in 10 millennials reported they would continue to work at a company for five or more years if it is diverse.
As leaders in business as well as the broader community, we know we have a responsibility to society. Not to mention, as financial services executives, we can help to foster widespread prosperity.
To this end, we have both worked to empower black Americans to achieve personal and professional success. For example, After School Matters, a nonprofit founded in 2000, provides enrichment programs to thousands of inner-city high school students in Chicago. Meanwhile, JPMorgan Chase’s Fellowship Initiative, founded in 2010, offers hands-on college access and academic support to young men of color in Los Angeles, New York, Chicago and Dallas. The scale and success of these efforts are impressive — but not enough. There is much more work to be done.
Recently, we announced Advancing Black Pathways — a new program at JPMorgan Chase that seeks to build on existing efforts to bridge the racial wealth divide and ultimately help black families build wealth. We urge more businesses to join us as we attempt to close this divide.
More Perspectives on Management & Leadership
Our current initiative, Advancing Black Leaders, seeks to hire and promote more black senior executives and junior-level employees at JPMorgan Chase. We know investing in our employees is key to our company’s future. In addition to recruiting more African-American leaders, we also need to focus on retaining them. Since 2016, the firm has increased the number of black managing directors by 41% and black executive directors by 53%. A good start — but just the beginning.
Advancing Black Pathways will create a dedicated talent pipeline that will start young black professionals on an early career path and foster a corporate culture that further encourages diversity at all levels. We plan to hire more than 4,000 black students in full-time positions, apprenticeships and internships over the next five years. JPMorgan Chase will also help create job training programs that are aligned with growing industries in the broader communities we serve.
We are also investing in the financial success of black Americans through a focus on savings, homeownership and entrepreneurship. For example, the largest wealth gaps lie in racial disparities among entrepreneurs. If people of color owned businesses at the same rates as whites, 9 million more jobs and $300 billion in income would be created.
As part of this effort, we are helping to create a $6.65 million Entrepreneurs of Color Fund with local partners in the Washington, D.C. region to expand access to capital, improve business services and streamline supplier diversity programs for small, minority-owned businesses. To date, we have launched similar low-cost loan funds in four other US cities, bringing other investors to the table, and leveraging nearly $40 million to support underserved entrepreneurs. Thus far, Entrepreneurs of Color Funds have created or saved more than 1,200 jobs in critical neighborhoods lacking needed resources to grow.
Businesses of every size have an important role to play in expanding opportunity. By working together, we can give people a fair and equal chance to succeed, no matter their zip code or skin color.