Take a moment to remember the worst mistake you’ve ever made in your life. Now imagine being forced to describe that moment to strangers who can use it against you in hiring or firing. For the 77 million Americans that hold a criminal record, the worst mistake of their lives often becomes an insurmountable barrier to getting a good job, building self-respect, and pursuing a family-sustaining career. For Black and Brown people who have been impacted by the criminal legal system, racial discrimination further limits the likelihood of achieving economic mobility. However, Confluence members have the ability (and, we think, responsibility) to be active owners that use the power of their wealth to pursue racial equity.
At two Confluence Philanthropy events this year, the Advisors Forum and the Belonging Pledge Town Hall, my colleague, Nimrit Kang, and I, respectively, discussed our firm’s work on fighting for racial equity. Our firm’s most recent efforts to dismantle systemic racism have been focused on fair chance employment – the proactive recruitment of people with conviction and incarceration records. Here are some thoughts we’ve learned along the way.
It is important to begin one’s work from the recognition that the U.S. economy was built on the unpaid labor of enslaved African and Indigenous people and that society continues to suppress their descendants. Following that logic, it makes sense to hold the largest employers, corporations in America, accountable for historic and continued involvement in oppression.
Another critical fact is that even though 1 in 3 Americans has been directly impacted by the criminal legal system, only 12.5% of U.S. employers are willing to consider hiring someone convicted of a felony.[1] This is especially meaningful for portfolio companies due to the oncoming labor shortage where, by 2030, more than 85 million jobs may remain open because there will not be enough skilled people to fill them.[2]
Through corporate engagement on fair chance employment, a few trends have emerged.
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Typically, companies are doing the bare minimum that’s legally required, but investors can press for better practices that can have a real impact on affected people.
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Change is possible. As a result of NorthStar’s recent shareholder proposal, Xylem (a water technology manufacturer) agreed to initiate a fair chance employment program at two of its manufacturing sites, with intentions to expand in 2024. The program intentionally centers racial equity in both siting decisions and program success evaluation.
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Research shows that formerly incarcerated people are often the most motivated, loyal, and productive employees on staff.[3]
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Bias against people with criminal records are deeply embedded in society. To make progress, we need to transform fear and stigma into openness and empathy.
As public equity shareholders, Confluence members have a key role in supporting a transition to racial equity. Shareholder proposals that go to company proxy ballots open the door for Confluence members to use their wealth to reduce inequality. We urge members to ask how their asset managers voted their proxies on these issues and ensure that proxy voters know the organization’s opinions and values. Every vote counts and can make the difference in whether a company is willing to take steps towards more inclusive hiring practices and improved racial equity.
