The People Within Economies

the following

is a collection of reflections gleaned

over several months in my role as deputy

state treasurer for the state of

illinois a state

that has the fifth highest economic

output in our union

and reinforced by my upbringing in

poverty on the south side of chicago

and in working low-wage jobs

in my formative years as a young worker

the impact has been severe and

widespread

public health crisis short-term food

shortages

rising unemployment loan defaults

the very fabric of our society is at

peril

it has exposed issues of race and

ethnicity

of age and class inequality within our

humanity

our economy and the people within it are

not immune to these challenges

just as a pandemic has exposed the

inequities within our civic society

it is also revealing deep risk within

our local economies restaurants

are fighting for their survival schools

and other places of learning are

inaccessible

and many theaters are at risk of

permanently closing their doors

our state and local governments face

significant revenue shortfalls

as a result of reduced consumer

consumption increased unemployment

and diminished economic activity the

conclusion

our state’s revenue will fall somewhere

between 2 billion this fiscal year and

more than 8 billion

in the next several years depending on

the severity of the recession

this will inevitably impact critical

services such as our parks

our roads and our schools an engine

of the us economy small businesses are

driving on fumes

not only do they generate half of u.s

economic output

but they generate two-thirds of net new

jobs

small business is literally everybody’s

business

they are interwoven into the fabric of

our local communities

for example there is larry he’s one of

the many small businesses

that i’ve interacted with over the last

several weeks he has been

cooking up cuisine for the past 30 years

and devoting his sweat and tears

during past downturns in the past month

though

he’s had to close his doors lay off two

dozen staff

negotiate a ferment and figure out if

the government small business ratskey

plan is going to help him

the gut-wrenching decisions weigh on him

how to provide for his family how to

protect his employees

and how his business can endure in the

long term and nearly every other small

business in the us

is in the same set of shoes whether it’s

the restaurant’s truckers

the suppliers or the growers

multiplied by the thousands this helps

illustrate

how the pandemic has triggered the worst

recession in nearly a century

as the initial blows on both individuals

and small businesses

ripple out into the masses the speed and

scope of this downturn

is significantly worse than any

recession

since world war ii a recent fed survey

estimated that of families making less

than 40 000 a year i repeat

of less than 40 000 a year ladies and

gentlemen

a whopping 40 percent have said they

have someone

that has recently lost their jobs since

february

this means our citizens who are most in

need

bearing the brunt of this economic

shutdown

it has put the cost of not having a

social safety net

front and center case in point

debbie she was introduced to me by one

of my employees

she is 59 years old proud mother of four

and works at a meatpacking plant taking

that early morning drive

time and time again for the past 15

years today though

she feels ill she has a headache

fever difficulty breathing body aches

sinuses

her eyes hurt however

she’s unable to take any time off her

husband was recently laid off

these are the decisions that are being

contemplated daily

the lives lost under covet 19 and the

lives lost under an economic shutdown

these low-wage workers the backbone of

our society

they’re not working from home no they’ve

been laid off from affected industries

or they’re performing critical tasks

which means are highly more susceptible

to getting sick

yet we as a society cannot survive long

without them

in the city of chicago alone there’s

approximately 1.3 million workers

that tend to work in sectors that pay

hourly wages think

retail restaurants manufacturing

warehouses arts and entertainment just

to name a few

all together these sectors comprise

about 60

of chicago’s workforce yet these sectors

are the ones that are most at risk

do not have any paid time off and

they are more susceptible to loss of

income whether temporary or permanent

the chicago region has the fifth

highest economic and racial segregation

in the country this is probably a

statistic we’ve all heard before

but it is of critical importance now why

although many people will suffer as a

result of this pandemic

people of color are particularly

vulnerable

our response must be swift yet equitable

otherwise issues of segregation and

inequality will only be exacerbated

just as kova 19 has ravaged

african-american

and latino neighborhoods due to chronic

health disparities

job and wage losses are hitting

african american and latino families the

worst

then there is linda she’s one of my

constituents

she’s a latina store associate at a

neighborhood store

linda does not have health insurance and

now her work hours have been reduced too

she doesn’t have the luxury of having

her groceries delivered to her

no as a matter of fact she’s the one

stacking the shelves so

not only is linda more stressed than

ever financially

but now she’s at heightened risk of

contracting the virus or even worse

dying from it

not to mention the lack of

transportation and lack of child care

that she’s also confronted with

you know 61 percent of latinos and 44

of african americans recently stated in

a survey that was conducted in april

that they themselves or someone in their

household

have suffered job or wage losses as a

result of the coronavirus

outbreak compared to 38 percent of their

white counterparts

ladies and gentlemen the response to the

pandemic is being crippled

by the same issues that have impacted

many of our lives

growing income inequality the rise of

misinformation

lack of trust in institutions

the rural urban divide and hyper

partisanship

this is neither a democratic nor a

republican issue

this is neither a rural nor a urban

issue this is neither a us

nor a them issue this is an issue of

humanity

we cannot let this threat drive us apart

what we do moving forward will dictate

the forthcoming future

just like the period following the great

recession

the current economic recovery is serving

the well-to-do and the wealthy although

we’ve enacted more than three trillion

dollars

in government stimulus and more than

three trillion dollars

in monetary stimulus six trillion

altogether

the resulting recovery is benefiting

those with capital

the glaring disconnect between

the real economy of workers with jobs

and bills to pay

and the investor economy of investors

with

stocks and bonds is one of those most

stark issues of this time

we must be the change that we seek

we must use this crisis to think bigger

we must recapitalize underserved

enterprises

with flexible low-cost sources of

capital

we must foster local economies with the

structures to support them

and we must employ strategies that

promote sustainable economic activity

that is why in my role here at the

treasury

for the fifth largest state with a

academic

output similar to that of the

netherlands i propose the five

following economic systems innovations

in order

to help build the foundations necessary

to expand the recovery to broad swaths

of society

number one access to capital small

businesses

in underserved areas are a powerful

economic engine

generating wealth and creating jobs in

areas where resources are scarce

entrepreneurship is a potent tool to

help

close the long-standing wealth gap just

as covent 19

threatens to permanently shutter many

small businesses

we need to consider and adopt policies

that promote

flexible low-cost sources of capital

from nimble institutions

such as community banks credit unions

community development corporations

community development financial

institutions micro lenders

and community land trust to name a few

as such

businesses such as larry’s restaurant

will have access to capital

and not just those big businesses with

the resources and the relationships

number two publicly supported financial

institutions

just like we have food deserts we have

banking deserts we have entire

neighborhoods

that don’t have access to affordable

basic banking services

much less access to capital these

neighborhoods have been deemed

not profitable or not profitable enough

which is the reason why

state and city supported financial

institutions are a key

to bridge this gap and boosting

banking services and available capital

to people like larry

that are not being well served by

traditional financial institutions

number three employee-owned enterprises

these are businesses

that are owned and governed by their

employees they tend to share to common

characteristics

member owners invest and own these

businesses

and they share in the enterprise’s

profits

and since many of the workers are

residents of the community

they tend to employ sustainable business

practices that do not harm people like

debbie

and the profits they stay and

recirculate within the local economy

number four complementary currencies

they are a tool for community economic

empowerment

and development towards self-reliance

they help

maximize the flow of goods services and

capital within a predefined region

thereby strengthening a local economy

commonplace in the early 1900s they are

once again being recognized as a tool

for local economic development when a

individual makes a conscious commitment

to buy local they are taking an interest

in their community

and in people like linda thereby helping

create the foundations for a truly

vibrant local economy and lastly

stakeholder capitalism if there is a

positive consequence resulting from this

pandemic

it is the acceleration of the shift to

stakeholder capitalism and away from the

singular emphasis on shareholder profits

the importance of customers and

suppliers of employees and the

communities in which they operate

have brought forth stakeholder

capitalism into sharper focus

when companies do things like increased

health care benefits

hike pay for farmland workers lower

executive compensation

in order to avert layoffs and take

additional precautions to protect

their workers like linda this will

inevitably result in a more

engaged and productive workforce and a

more loyal

customer base following the recovery

on a concluding note we need to drive

towards a more

fair free just and equitable society

the work is more important than ever now

we need to work together in partnership

to rebuild our communities

and address the historical and

structural inequities

that have persisted in our society in

light

of the new and evolving challenges that

lay ahead

and if we don’t it may be the imminent

last straw

that finally breaks this great american

experiment of ours

thank you