Building An Inclusive Economy

Through diversity and inclusion efforts, businesses can reap tremendous benefits by attracting top talent, driving performance and innovation, retaining employees and gaining a greater understanding of their customer base. Several companies in the Bay Area are on the forefront of diversity and inclusion (D&I) strategies and initiatives and are recognizing the benefits these strategies offer.

The timing of these efforts could not be better, as it is essential that the private sector take a leading role in addressing structural discrimination and showing that economic growth can benefit everyone. Nationwide, young men of color (YMOC) are more often born into systemic poverty, are more likely to become high school dropouts, and experience vastly disproportionate rates of incarceration.

In the Bay Area specifically, men of color experience strikingly different economic outcomes than do their peers. In the San Francisco and San Jose metro areas, almost half of all Black and Hispanic residents do not earn enough to meet daily living expenses. In Oakland, Latino men have the lowest per capita annual income at $16,635, while Black men are only slightly higher at $23,139. With males of color representing 65% of the 18- to 29-year-old male population in the nine-county Bay Area, a huge portion of the population is being left behind in the regional economy.

Though the statistics can be discouraging, this must be only the beginning rather than the end of the story. These young people are an essential asset to improving the Bay Area economy for everyone. The truth is that racial inequality does not just hurt select communities; it hurts the entire country. PolicyLink found that the U.S. economy would gain $2.1 trillion in gross domestic product (GDP), a 14% increase every year, by closing its racial gaps in income. Examining how inequality affects innovation, Stanford University researchers estimate that the Bay Area would have nearly four times as many inventors if all people across race, gender, and socioeconomic status were given equal opportunity to succeed. And in today’s job market, businesses are hungry for this talent. Nearly half of U.S. employers report difficulty filling jobs and believe that their talent shortages have a high impact on their ability to meet their consumers’ needs and to stay competitive in a global marketplace.

To address this economic and social imperative in the Bay Area, the Bay Area Council and many partners have engaged in an “Inclusive Economy” project for several years. A centerpiece of this project was the Bay Area Young Men of Color Employment Partnership (BAYEP). Over the course of three years, the Bay Area Council, LeadersUp, PolicyLink, and Urban Strategies Council partnered on this effort designed to economically empower young men of color in the nine-county San Francisco/Silicon Valley Bay region. Anchored by three major Career Summits led by LeadersUp—BAYEP’s talent development intermediary—the partnership connected hundreds of young people to career opportunities with Bay Area employers and provided career readiness training to thousands more. BAYEP’s broad goal was to serve a population that has been systematically excluded from the prosperity generated by the tremendous economic growth in the Bay Area over the past several decades.

This report shares the learnings from the BAYEP project and provides recommendations for how the region’s business and civic leaders can create an inclusive economy by offering better supports and opportunities for young men of color and others disadvantaged by our economic system. The findings are informed by a rich literature as well as companion analyses by PolicyLink, Urban Strategies Council, and LeadersUp. Crucially, the voices of the young men themselves helped guide the conclusions, as we incorporate the findings of surveys and focus groups conducted throughout this effort.

Key Findings:

1. Lack of affordable housing, transportation and childcare are the biggest barriers to economic empowerment of young men of color in the San Francisco Bay Area. Increasing housing production and reducing transportation and childcare costs can eliminate employment barriers to the recruitment and retention for opportunity youth.

2. Well intentioned employer hiring policies can unintentionally exclude qualified and motivated young men of color. Reengineering policies to combat unconscious bias against YMOC and other underrepresented populations is essential for meeting growing talent needs while promoting economic inclusion.

3. Taking a regional approach to workforce development would better reflect the interconnectedness of the San Francisco Bay Area and greater megaregion. The hyper-localized and uncoordinated continuum of support our workforce development system offers does not match with the reality of the region, which shows the mobility of our residents across multiple jurisdictional boundaries

4. Tracking the effectiveness of diversity and inclusion programs will help employers drive real change when it comes to hiring, retention, and advancement of young men of color and other underrepresented groups. The proliferation of diversity and inclusion efforts among employers shows the desire to create inclusive workplaces, but without tracking program results in a consistent way, it’s unclear which strategies actually work.

5. Mapping out clear career pathways within companies to advance young people into middle-skill, family-sustaining-wage jobs is a critical piece in driving economic empowerment. Due to a multitude of factors, including the nature of grant funding, most workforce programs focus on entry level job placement and these are an important first step. However, without clear career pathways and supports to get young people to at least middle-skill, middle-wage jobs, we will not be able to break the generational cycles of poverty we see too often in the Bay Area.

As an organization devoted to improving the Bay Area for all its residents, the end goal of the Council’s involvement in this effort is to create systems-level change in workforce development.  As such, it is essential to document the learnings that have come out of this partnership so that we create change at scale for these communities and for the broader Bay Area economy that depends on their inclusion.