Biz Journals: Businesses take stock of diversity efforts

3M, U.S. Bank make progress in diversity efforts, reports Center for Economic Inclusion - Alyxandra Sego - Minneapolis/St. Paul Business Journal, September 13, 2023

“While pressures to abandon racial equity and inclusion efforts are loud and sometimes vicious, the case for accelerating efforts is even more compelling when considering the opportunity that inclusion presents businesses and our broader economy.”

3M Co. (NYSE: MMM) and U.S. Bancorp (NYSE: USB) are among Minnesota companies making progress in diversity, equity and inclusion efforts, according to this year’s racial-equity report from the Center for Economic Inclusion (Center).

The "2023 Racial Equity Dividends Index Report- Private Sector" is the second annual report from the St. Paul-based racial economics organization. Last year, 40 companies with large footprints in Minnesota participated in the racial-equity survey. For this year, 22 companies participated, making the total of unique companies participating for both years at 50, the Center reports.

The index was created as a tool to help businesses identify and monitor their actions for anti-racism, Tawanna Black, the Center’s founder and CEO wrote in the report’s opening statement. It also serves as a barometer for consumers, workers, shareholders and investors, she continued.

The index currently measures 43 racial-equity standards across seven equally-weighted categories (leadership; hiring; culture, retention and advancement; procurement; products and services; philanthropy and investment; and public policy). Some categories, if they were not applicable to a certain company, were excluded from that company’s total score. For example, if a company didn’t participate in lobbying, public policy may not be measured against their score.

According to the report, the average score for this year’s participants was 44 out of 100.

Both 3M and U.S. Bancorp met racial-equity standards within four of the seven categories, the highest in this index. Maplewood-based 3M scored at highly in initiatives related to leadership, hiring, procurement, as well as philanthropy and investment. Minneapolis-based U.S. Bank, meanwhile, scored highly in leadership, hiring, products and services, as well as philanthropy and investment. Both organizations last year met the report’s standards for the category measuring culture, retention and advancement, but did not do so in this year’s report. 

Click to read full article from BizJournals (paywall)

• Read the full 2023 Racial Equity Dividends Index for the private sector to learn more about the organizations that participated.

• Contact Nashan McKelton, director of sales and growth if you want to see how your organization measures up.

• Join us at our Oct. 5 #PoweringInclusion Forum (a virtual event) to understand how recent U.S. policy changes could undermine these efforts!

Do hiring goals still matter? Yes, especially if building a racially equitable and inclusive workplace is the goal

The Racial Equity Dividends Index (Index) is a comprehensive analytical tool developed by the Center for Economic Inclusion that helps businesses measure their progress toward building a racially equitable and inclusive workplace. This post explores the research behind the standards in the Index, and how implementing these policies and practices can help close the racial wealth gap in Minnesota.

Shoreé Ingram

By Shoreé Ingram,
Managing Director, Employer Services and Consulting

In 2022, just 35% of companies participating in the Racial Equity Dividends Index indicated that they set enterprise-wide goals for hiring, retaining and advancing Black, Indigenous, Hispanic, and Asian people in their organizations.

This racial equity standard is one of the most important ways that companies can make real structural change in their organizations. A key lever for this permanent structural change is organizational responsibility—when leaders take responsibility for reaching these goals.  

Studies have found that setting specific goals for hiring, retaining, and advancing workers of color is a highly effective strategy for increasing the racial diversity of an organization’s workforce, especially for management-level roles. This practice has a stronger demonstrated impact on workforce diversity than efforts to create mentorship networks or trainings to reduce bias and discrimination.

While setting the goal is the first step, creating shared accountability across the organization toward achieving these goals is the immediate second.  

What Gets Measured, Gets Done

Companies need to have mechanisms in place not just for measuring progress, but for supporting and holding leaders accountable for developing, implementing and resourcing those anti-racist strategies, and actions needed to achieve goals.

Here are three examples of racial equity standards companies can incorporate into goal setting:

• Hiring, retention, and advancement questions in managers' annual performance evaluations.

• Holding specific strategy sessions with managers on a quarterly, biannual, and annual basis to review progress.

• Offering performance bonuses to managers based on their success in meeting hiring, retention, and advancement goals.

Goals combined with resourced action plans with clear accountabilities will achieve and sustain positive organizational change critical to a racially equitable and inclusive workplace.

Companies increasingly understand the benefit of goal setting to increase racial and ethnic diversity in their organizations and cite research that shows commitment in practice to racial equity and inclusion positively shapes perceptions of culture and work environment for all employees.

Research also shows that companies with teams made up of diverse backgrounds not only benefit from improved financial performance, but are more innovative, able to evolve to meet current market demands and compete in a global economy. This study cited diverse teams are more likely to challenge ideas and rely closely on facts with less likelihood of mistakes or errors. 

Maintaining the Commitment 

While setting goals, and putting action and accountability plans in place are critical, companies need to also maintain this commitment not just during times of stability or growth, but when grappling with economic downturns. Historically during economic downturns, including from 2019 to 2020, Black and Brown workers are too often the first to be laid off or fired, and the last ones hired.

A company and our region’s commitment to racial equity and economic inclusion must be centered in an understanding and commitment to what data has already showed us: we all benefit when we are all included and able to fully participate in our economy.  

Do hiring goals still matter? Yes! Set those goals and be accountable for measurable progress toward a racially equitable and inclusive workplace where every employee thrives .

The Center is ready to help you kick-start and achieve your hiring goals through participation in the 2023 Index. Let’s build!

To learn more about how your company can use the Index to build enterprise-wide goals for hiring, retaining and advancing Black, Indigenous, Latino, and Asian people in your organization, register online by February 24. 

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Making the Unseen Visible: The Racial Equity Dividends Index for the Public Sector

The 2023 Racial Equity Dividends Index registration period is open now through Friday, July 15. Register your organization today.

By Heather Worthington, Managing Consultant

In the last few years, local governments have begun to truly embrace the deeper work of changing policies and practices to address racial disparities in their communities. As they reckon with this, they have found limited tools available to truly measure progress in this area.

As John Dulles said, “The measure of success is not whether you have a tough problem to deal with, but whether it is the same problem you had last year.”

Dozens of organizations in the state are working to solve this dilemma through a unique new racial equity tool.

A Data-Driven Tool to Guide Racial Equity Action

The Racial Equity Dividends Index (Index) for the Public Sector helps public entities better understand their organization’s progress toward meeting their racial equity goals. Diversity, Equity and Inclusion work is important, but in order create and scale systemic change with results that matters to the communities local governments serve, adopting an anti-racist mindset and framework is key. The Racial Equity Dividends Index—Public Sector helps organizations establish a baseline that can be used year-over-year to:

• guide action on racial equity work

• enlist help from staff

• help prioritize resources, and

• experience the meaningful and measurable impact of achieving greater performance in areas like recruitment and retention of employees, procurement from Black, Indigenous, Asian or Latine-owned businesses, and development that addresses historic harms and catalyzes trust-based development in communities of color. 

 The Index also helps organizations understand how policies and practices impact the community in areas like housing, economic development, transportation, public safety, and human services.

Learning to Lead on Racial Equity

Public Sector leaders see the Racial Equity Dividends Index for the Public Sector as an important resource for local governments to use in establishing a baseline measurement of their racial equity work.

“This tool will empower our public organizations to build anti-racist policies,” says District 14 Metropolitan Council Commissioner Toni Carter. “With the help of the Center, and through this Index, our public institutions can truly focus their attention to using their results to uplift Black and Brown people in our communities who have been historically undervalued and underserved.”

Participating organizations receive a report of their results and peer rankings. The report also features peer-reviewed research and profiles of successful approaches to each focus area from the Center and our national partners like Brookings and Policy Link. These features offer supporting documentation for the standards for anti-racism that comprise the Index survey questions. The Report offers organizations a road map for taking action to accelerate areas of strength, and uproot systemic roadblocks to progress on the journey to racial equity and inclusion.

“We know that our communities are looking to us to take the lead on diversity, equity and inclusion,” Center Managing Consultant, Heather Worthington. “We also know that leadership needs data-rich resources like these to show residents, elected officials, and staff that this work is a necessary investment and will benefit everyone. The Racial Equity Dividends Index for the Public Sector is one of the most valuable tools in helping build that business case for investing heads, hearts, and budgets in building a stronger community.” 

Maximizing Action with Limited Resources

For many local governments, data collection is a heavy lift. Human and financial capital and resource restrictions are the source of analysis paralysis – leading to the ever-present question of, “where do we start?” The Racial Equity Index-Public Sector is an ideal tool to get started on measuring racial equity progress—and making sure the strategy aligns with the needs of residents, employers, and government entities.

Once the metrics are more widely understood, the Center can work with staff to address the findings from the Index to assist leaders in better utilizing their unique data with regard to policy and practices. Finally, while all data is anonymized, it is peer-reviewed with similar size local governments in Minnesota and comparable communities across nation. This benchmarking helps organizations establish racial equity goals that also facilitate inclusive economic growth and competitiveness, helping to ensure the community you are building is a community of choice for talent, employers, and investors. 

Getting started is often the hardest part of the work. We’re here to offer a tool that can help leaders take that first step toward becoming a more equitable and inclusive organization. And we’ll be there to guide you and your peers and elected leaders on the journey from increased awareness about what’s working and what’s not, to taking actions that will transform the community into one that is good for all people to live, work and play.

This is an investment that will pay great dividends for staff and ultimately for the community.

• To learn more about the Public Sector Index, email Center for Economic Inclusion Director of Sales & Growth, Nashan McKelton at activate@centerforeconomicinclusion.org.
  
  

Statewide Housing Amendment: An Innovative Solution to Close Racial Homeownership Gaps

Isaac Russell

By Isaac Russell Director of Policy

Across the country, many states and municipalities are facing critical housing challenges—shortages of affordable housing can lead to crises for low-income renters, which also means that potential first-time homeowners are priced out of the market.  

In Minnesota, these pains are felt acutely and disproportionately by Indigenous people and people of color. The Center’s Indicators for an Inclusive Regional Economy show racial homeownership gaps persist, even among households with similar incomes. This suggests that Black, Indigenous, Latine, and Asian families face additional burdens to homeownership beyond earned income. Among families earning between $50,000 to $100,000 annually, only 41% of Black households own their homes compared to 72% of White households. These racial disparities also exist among low-income renters. Low-income Korean American, White, and Black households are hit hardest, with more than 3 in 5 renters in these communities being disproportionately rent-burdened.  

Dedicated Affordable Housing Dollars: A Constitutional Approach 

To find solutions, policymakers and industry groups are looking for statewide solutions to address these housing crises. One innovative solution to move the needle is a proposal for a constitutional amendment that would dedicate revenue to the construction of affordable housing, rental assistance, and homeownership.  

While this solution alone will not solve racial inequities in housing, it does address one of the foundational problems, which is a shortage of affordable housing. If we define affordable housing as 30 percent of area median income, the metro area is short approximately 71,491 units. To build a single unit of affordable housing, including years-long subsidization of the unit, costs approximately $300,000. This comes out to an over $21 billion price tag to build these units. According to the Minnesota Housing Partnership, our state is short approximately 103,600 units with a price tag of $31 billion. 

Accessible Homeownership Builds Inclusive Regional Economies 

Across Minnesota, this crisis extends to families that wish to purchase a home. It is estimated that 27,000 families can afford homeownership but continue to rent due to the lack of available housing stock within their price range. To facilitate more home ownership among underrepresented communities, we must address stagnant funding to programs designed to help construct new housing. These include programs such as the HOME Investment Partnership Program and the Community Development Block Grant Program, which have helped to compound multi-year housing shortages. The urgency for such investments can be seen in the Metropolitan Council’s projections, which show the region will gain 367,000 new households by 2040. That means we will need nearly 13,000 new housing units of all types. The region has produced less than this number per year for the past decade! An inclusive economy makes the stability and wealth-building benefits of homeownership accessible to all households, regardless of their race or ethnicity. 

Systemic Solutions for Systemic Problems 

All of this goes to the heart of why the Center supports a constitutional amendment that dedicates three-eighths of a percent sales tax to the building of affordable housing, makes financial resources available for homeownership, and provides support for housing stability. Modeled after our very successful Legacy Amendment, this initiative creates three advisory committees that will provide recommendations for lawmakers when they decide how they will allocate resources.  

To make this happen, we need legislation that authorizes a referendum for voters. This referendum will require support from a wide array of stakeholders to let the public know of this initiative and also a show of support from constituents.  

We know this one amendment will not solve all our housing challenges, but it is one of the tools in the toolbox that will build the homes Minnesotans need.   

• Learn more about the amendment

• Contact your legislator, let them know what you think

• Explore the Indicators for an Inclusive Regional Economy 

• Read Our 2023 Policy Priorities 

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Are You A Racial Equity Navigator?

Tawanna Black

By Tawanna A. Black, Founder & CEO

Have you had to navigate any potholes lately? Perhaps you even took a drive down a winding road and had to navigate tree branches that had fallen after our early spring snow fall, while also looking above to ensure that low hanging branches were not scraping the roof of your car…WATCH OUT! Don’t swerve too far to the right or you’ll hit the car in the next lane, and don’t you see the officer sitting in the parking lot up the street, he’ll give you a ticket if you’re not careful!

Navigating the Potholes of Racism

As I drove to the office this week, and navigated the terrain, I was reminded not only of our work helping employers dismantle systemic racism, but of the experience of Black women, pushing hard to achieve our personal dreams, the dreams of our families, and the dreams of our communities, while navigating the visible and invisible pot holes of racism, sexism, conscious and unconscious bias rooted in capitalism that often jump up out of nowhere to force us into new lanes, vehicles, and opportunities.  

I continued the drive and thought about how important it is to have other drivers who are not only looking out for themselves, and the obstacles in their own lanes, but also watching my lane, and the obstacles that might cause me to slow down, speed up, pick up a passenger or two, or change lanes all together. As a large recycling truck who had much greater visibility than I did in my vehicle pulled alongside me, I began to consider how much I value those fellow drivers who have a heightened consciousness about the limited view their fellow drivers have of upcoming obstacles…how much I value those drivers who put their bright lights on so that others can see challenges up ahead, and those who bring their plows out to clear debris so that others can keep moving.

In this journey of building racially equitable and inclusive regional economies, we need each other, the same way we need each other as we navigate snowy, pothole, and tree branch filled roads and sidewalks. While policies and practices are important, dismantling systems of oppression and building anti-racist organizations require much, much more. 

Share Your Resources

If you have information, power, money, or assets, information, or knowledge it must be shared with people in a position to create change, who need those resources to accelerate progress. Relationships must be kindled, curated, and deepened across race, sector, neighborhood, and class in meaningful ways that transform our very way of being. Our formal and informal decision-making must begin to change to invite others to not only provide input, but to make the decisions, distributing power and accountability. And we must begin to interrogate our beliefs about one another that have undergirded generations of biased and racist policies and practices, actions, and inactions. We must ask ourselves what is true, and how know it’s true; why we believe what we believe about people who live, work, and play differently than we do, and how we can challenge our assumptions when making decisions that impact people’s lives, communities, and livelihoods. 

Stay on the Journey

These four conditions of systems change: Resource Flows, Relationships & Connections, Power Dynamics, and Mental Models, have a significantly greater impact on our everyday interactions than policies and practices, just as the fallen tree branches and the actions of our neighbors have on our ability to safely navigate sidewalks and roads after a winter storm on an early spring day. The potholes of racism won’t go away on their own. It’s going to take ALL OF US. I hope we can count on you to stay on the journey!

In solidarity~
Tawanna

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A Long Overdue Investment in Racial Justice: Raising Wages for Care Workers

Betsy Ohrn

By Betsy Ohrn Director of Research

At the Center for Economic Inclusion, we believe all workers should earn a family sustaining wage.

One racial equity priority that we were excited to see reflected in Governor Walz’s proposed budget is a major investment to increase the wages of direct care workers. The budget includes $300 million in this biennium and $500 million in the next to implement the tentative contract agreement between the State of Minnesota and SEIU Healthcare Minnesota and Iowa, providing a historic rate increase for more than 20,000 home care workers in Minnesota.  This is a critical opportunity to address a deep racial injustice that touches the lives of hundreds of thousands of Minnesotans. 

“As a woman of color who has chosen to make Homecare a career choice I cannot express how discouraging it is to find an occupation that you truly love and are made for, which also benefits the people you provide services to, but find that you can’t earn enough at to financially support your own household without some type of assistance or additional employment.”- Tavona Johnson 

Women make up 85% of the direct care workforce, 36% of these workers are people of color. Based on DEED data, almost 11% of working Black Minnesotans work as direct care workers (personal care workers, or nursing/home health aides.) This follows a national trend which also shows that Black women are deeply overrepresented in direct care occupations. This occupational segregation reflects a legacy of slavery and domestic servanthood that continues today. Where enslaved Black women were once charged with caring for White children, Black women were then sidelined into work as domestic servants and childcare workers, and now increasingly they are called to care for the growing elderly population. 

The injustice is not the work itself, but the fact that the work continues to be deeply underpaid, even though this work is essential to the well-being of hundreds of thousands of Minnesotans. In 2020, the average wage for all direct care workers in Minnesota was $14.72 per hour. Around 40% of direct care workers have insurance through Medicaid, Medicare, or another public source.1  

Further, these professions are critical to the future of Minnesota, especially as our population continues to age. Direct Care Workers, nursing assistants and personal care assistants, are two of the fastest growing professions in Minnesota. However, low wages and challenging working conditions are already resulting in large vacancy rates. According to the Minnesota Department of Employment and Economic Development, the last estimate at the end of 2021 showed more than 9,100 job openings — a vacancy rate of 8.4%. In 2022, Minnesota nursing homes reported the largest staffing shortages in the country. These staffing shortages make the work harder for the remaining care workers, place extreme stress on family members, and are creating burdens on our hospital system.  Having committed, well-trained, and experienced workers in these roles is critical to the dignity and well-being of Minnesotans needing care.  

While some employers may want to raise wages, market failures and policy hold back what is possible. Federal Medicaid and Medicare rules constrain how much states can reimburse for direct care services. For this reason, state level leadership is critical to this issue. The agreement between SEIU Healthcare and the State of Minnesota would increase starting wages from $15.25 to $20 per hour by 2025. The deal covers more than 20,000 caregivers, about a fifth of the total direct care workers across the state. If the legislature approves and funds this contract, it will be a significant step forward for many direct care workers.  

This is a historic investment in the wages of workers who are essential to Minnesota’s economy. Not only does this benefit our homecare workers, it also goes a long way to attract committed people to these important jobs. However, you do not need to be a member of SEIU to show your support.  

• Want to know more about how we do our research? Check out our Indicators for an Inclusive Regional Economy

• Take Action: Find and call your legislator. Let them know you support this opportunity to make a difference in the lives of our workers and of all Minnesotans that need dedicated people caring for them. 

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Previewing the Racial Equity Dividends Index for the Public Sector

Nathan Arnosti

By Nathan Arnosti, Director of Analytics

Racial Equity: The New Public Priority

Forward-thinking leaders in local governments across the country recognize that many existing practices and policies stand in the way of goals to build racially equitable, inclusive, and prosperous communities.

Studies show that status quo practices – outdated job requirements that exclude candidates of color, purchasing agreements with longstanding contractors that hinder their ability to diversify their supply chains and increase regional job growth among Black, Indigenous, Hispanic, and Asian entrepreneurs,  land use planning that fails to integrate the needs and perspectives of historically marginalized communities, economic development incentives that subsidize low-wage job creation –exacerbate racial wealth gaps and restrict regional economic growth.

​​​​​​​Meanwhile, emerging practices based on research and pilot demonstrations in local governments across the country offer paths to improved service delivery, community relations, livability, and shared economic prosperity.

Many local governments have established taskforces and committees, created new permanent roles and teams, and joined peer learning networks to make progress towards becoming more racially equitable and inclusive. Yet these efforts are too often piecemeal, siloed within specific departments, and lacking broader context and peer comparison. Based on conversations we’ve had with public sector leaders and partners in recent months, we believe that those looking to take their next steps towards building racially equitable governments would benefit from a new tool developed by the Center for Economic Inclusion, the Racial Equity Dividends Index for the Public Sector.

What Gets Measured, Gets Done

This analytical tool evaluates a local government’s internal and external-facing practices across ten dimensions, including Procurement, Community and Economic Development, and Budgets, identifying more than 60 racial equity standards that research and experience affirm to support more racially equitable and inclusive outcomes. Participating organizations receive a customized score report that provides a clear, concise, quantified picture of their government’s overall current state for supporting racial equity, benchmarks progress against peers, and identifies opportunities for further progress. High-scoring entities will also be publicly recognized in an annual Racial Equity Dividends Index for the Public Sector report. The Public Sector Index structure is modeled off of the Center’s Racial Equity Dividends Index for the Private Sector, which launched in 2022 for private sector employers.

How To Participate

Registration for the first annual Racial Equity Dividends Index for the Public Sector begins at the end of April and will be available to city and county governments in Minnesota and select jurisdictions across the United States. Email me at narnosti@centerforeconomicinclusion.org if you have questions, and stay tuned for more information about registration for the Public Sector Index in the coming weeks!

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Promoting Racial Equity Through a Child Tax Credit

Betsy Ohrn

By Betsy Ohrn, Director of Research

As tax season ends, we highlight the important work that is being done to build equity in the tax code. One critical piece of legislation is Child Tax Credit-- a benefit that would provide significant critical resources to Black and brown families.

We are extremely excited to see this policy included in Governor’s Walz’s budget proposal. This is a unique opportunity to invest in families and promote racial equity across Minnesota.  

In 2021, as part of the American Rescue Plan Act (ARPA), Congress established its first near-universal child benefit in the form of an expanded, monthly CTC. This CTC contributed to a decline in child poverty rates by over 40%. While there was hope the CTC would be made permanent, federal inaction has left it up to the states to continue this critical effort.  

The Governor's proposal follows a similar structure by providing a fully refundable tax credit for children younger than 18 years old and older kids with qualifying special needs. This proposal is estimated to benefit more than 360,000 families and would provide significant ongoing resources directly to families to help cover critical expenses and get their kids off to a strong start. The policy also boosts family income flexibility so families can spend the money where they most need it. 

Analyses find that a tax credit like this could impact 463,000 children, almost 38% of children in the state. It would cut child poverty in Minnesota by 25 percent and lift 22,500 children out of poverty. 

Furthermore, we know that a higher proportion of Minnesotan children are Black, Hispanic, Indigenous or Latino, about 33 percent, compared to 22 percent of all residents. For this reason, investing in Minnesota children, especially those with fewer economic means, is an investment in a racially equitable and inclusive economy.

In 2019, 11 percent of kids in Minnesota were living at or below the poverty line, but studies looked at that number by race and cultural community. The poverty rate for Somali children in Minnesota sits at around 57 percent, 58 percent for Burmese children, 31 percent for Mexican, 29 percent for Hmong, and at 32 percent for African American children. A CTC would make a significant impact on these communities.  

We are excited to learn more about the governor’s proposal and see the details discussed in the legislature. We encourage policymakers to follow the key design principles laid out by ITEP including making the credit fully inclusive, working to offer the credit as a monthly payment, and phasing it out by income.

Help make this historic investment a reality!  

Find and call your legislator and/or sign your organization on this letter to state policymakers coordinated by: Children’s Defense Fund-Minnesota, Legal Services Advocacy Project, Minnesota Budget Project, & Minnesota Catholic Conference, urging them to step up for our families and children by creating a state Child Tax Credit - modeled on the federal expanded CTC’s success – in 2023. 

The letter below will be shared with Governor Tim Walz and members of the Minnesota Legislature at key moments in the policy debate. 

Let them know you support this meaningful step in enhancing the economic inclusion and well-being of children in Minnesota! 

• Want to know more about "The Whiteness of Wealth?" Check out this important and powerful discussion with Dr. Dorothy A. Brown we held last January in partnership with the Minnesota Department of Revenue: "Unleashing the power of the tax code for equity."

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The Time is Now for Racial Equity Impact Notes in Minnesota

Betsy Ohrn

By Betsy Ohrn, Director of Reserch

At the Center for Economic Inclusion (the Center), we are committed to redesigning policies, practices, and structures that have not only extracted wealth from, but have also prohibited the building and passing on of wealth or assets for Black, Indigenous, Latine, and Asian communities. This commitment has led us to become an active leader at the state and local policy level.  

As different organizations and individuals propose and champion new bills, it is challenging to assess whether they will have a positive impact on economic inclusion and the lives of people across Minnesota.  

In order to better understand these impacts, the Center has developed Racial Equity Impact Notes (REIN). Similar to the fiscal notes that state legislators receive right now prior to voting on new bills (to understand the financial impact of any proposed legislation), these notes assess the potential impact of legislation on racial equity.  

What are Racial Equity Impact Notes? 

REIN employs a similar model to the fiscal notes—they assess the potential impact of legislation on racial equity. REIN will employ a methodology to evaluate the intended and unintended consequences of policies, investments, and programs. 

These notes could have had a great impact on certain rent control policies, for instance. Though well-intentioned, this legislation may have made racial inequities worse in some ways—may have even contributed to housing inequities due to the way income requirements and benefit expansions can lead to benefits cliffs which often leave families worse off. Racial Equity Impact Notes could have helped analyze rent control legislation to ensure that lawmakers find the right solutions to fix imbalances. 

REIN In Action 

So, what might these Racial Equity Notes look like in action? When assessing the impact of a Child Tax Credit (CTC) on Black, Indigenous, Latine and Asian families, for instance, lawmakers would be able to analyze the bill with a certain mindset specifically on racial equity. Such an analysis would show that a CTC could impact 463,000 children, almost 38% of children in the state. It would cut child poverty in Minnesota by 25 percent and lift 22,500 children out of poverty.i This would have an even larger impact on children that are Burmese, Mexican, Hmong, and African American. (add citations) 

Bipartisan National Support 

There are several states or localities across the political spectrum that have used some variation of REIN. For instance, Iowa, Colorado, Washington D.C., etc. are currently using impact notes. Iowa measures their criminal justice efforts, D.C. analyzes nearly all proposed legislation, and Colorado examines up to 20 bills per year all using some variation of racial equity impact notes. 

After being introduced in the 2021 legislative session but not moving forward, the Center seized the initiative and created an unofficial working group, comprised of representatives from racially diverse communities and the Legislative Budget Office. This group reviewed national research on impact notes and tested methodology in two case studies to produce data for impact notes. Through their work, REIN was re-introduced 2023 with a focus on economic and workforce development.  

Economic inclusion and prosperity require investing in Black, Indigenous, Latine and Asian owned businesses and workers, making this initial focus for REIN critical to Minnesota's economic growth and prosperity. 

Help make this legislation a reality!

Find and call your legislators. To make racial equity a systemic part of policymaking, we need Racial Equity Impact Notes. Let them know you support HF 2821 that enhances economic inclusion and racial equity in Minnesota! 

• Download the Center’s 2023 Policy Agenda

• Read the 2023 Racial Equity Impact Notes Proposal

• Steps to Racially Responsive Action

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Racial Justice Begins with a Transformational Bus Ride

Rebecca Toews

By Rebecca Toews, Communications Manager

When Jeanne Crain stepped onto the bus for the Reckoning for Truth, Trust, and Racial Justice Tour, organized by the Center for Economic Inclusion, she felt it would be a useful experience for her as President and CEO at Bremer Bank. What she didn’t realize before she joined a cross-sector cohort of peers in Selma, Alabama, was how truly transformational the experience would be both personally and professionally. 

“I was blind to so many aspects of how pervasive lynching was, and how many individuals it affected… how many individuals were unnamed, and also how [lynchings] were celebrated community events,” says Crain. 

Through a series of powerful yet intimate experiential opportunities spanning four days, Crain and 46 other executives leading Twin Cities-based organizations, immersed themselves in a small sampling of the history of Black people in the United States. They traversed the historic route between Montgomery and Selma, culminating in a reflective walk across the Edmund Pettis Bridge, scene of the now infamous events of Bloody Sunday.

“I was left speechless by this experience,” says Eve Onduru, VP of Marketing and Business Development with the Center for Economic Inclusion. “As a person from Kenya, I had obviously understood that my people were taken from their homes and forced into slavery, but I had not ever come so close to the places and stories. I could feel the presence of those whose backs this country was built on.” 

That is exactly the impact that Center Founder and CEO Tawanna A. Black and team had in mind when they evisioned the tours. “The tour is designed not only to share the history of racial exclusion and slavery in the United States, but more importantly, to help those in attendance to reckon with that history— to reflect with one another as a group and build accountability that will help them go back to their organizations and build truly equitable workplaces for their colleagues and employees,” says Black. 

Center staff member and tour facilitator Tiffany W. Worsley said the team wanted participants to sit in the truth of America from a physical and heart position. “We wanted to offer participants an opportunity to reckon with and ignite transformative antiracist change in Minnesota.” 

“We often hear, in Minnesota, that racism isn’t a problem because chattel slavery wasn’t allowed here, but racist acts and policy exist here in MN,” says Wilson-Worsley. “Participants told us about many light bulb moments of the role White supremacy plays in every aspect of their organizations. We know they left the tour truly understanding why they are responsible for creating equitable workplaces here in Minnesota.”

This experiential peer learning tour to Montgomery, Alabama invites participants to uncover a deeper understanding of the legacy of slavery and Jim Crow racism inherent in today’s racial disparities. The tour also sheds light on how the underpinnings of the Civil Rights movement must live on in our relationships, decisions, and investments today to catalyze new cross-sector anti-racist outcomes for the future.  

“Participants walk away from these tours understanding that although there is a shortage of opportunity in communities of color, there is no shortage of talent, innovation, or brilliance,” concludes Wilson-Worsley. “Investors and employers who join us have a unique opportunity to grow our region’s economy in measurable ways and to see an ROI by investing directly in Black communities.” 

• Learn more and register for a tour

Who are your subcontractors? Why organizations at the forefront of racial equity are measuring Tier 2 supplier diversity

Maggie Dalton

By Maggie Dalton, Senior Analyst

Buying goods and services from businesses owned by Black, Indigenous, Latino, and Asian people enable companies to benefit from new ideas and access new markets. That’s why more leaders in the private and public sectors are recognizing that their organization's supplier base is a critical lever for building a racially equitable economy.

A racially diverse local supplier pool can bring greater resilience and new resources into historically underinvested communities, building individual and community wealth. But robust supplier diversity efforts go beyond valuing racial diversity among direct suppliers — these efforts recognize that a supplier's subcontractors, or Tier 2 suppliers, matter, too.

That’s why one of the racial equity standards in the forthcoming 2023 Racial Equity Dividends Index is: Does your organization measure the racial diversity of its Tier 2 suppliers?

Standards related to procurement show some of the greatest opportunity for improvement among organizations who participated in the 2022 Racial Equity Dividends Index.

Just 39% of organizations who participated in the 2022 Racial Equity Dividends Index have an enterprise-wide practice of collecting and sharing data on the racial diversity of suppliers. Measuring the racial diversity of Tier 2 suppliers is a new standard for 2023.

Supplier diversity programs, which seek to build a diverse supplier base within organizations, have existed for decades, though it remains an area of business practice that is quickly evolving. Many businesses are just beginning their supplier diversity journeys, leading to a real competitive advantage for those who focus on diversifying in this area.

Research finds that diverse suppliers increase innovation, competition, and resilience throughout the value chain and unlock additional value, both for businesses and regions through increased business activity and economic growth. Moreover, investing in minority-owned businesses is investing in building prosperity in Black, Indigenous, Hispanic, and Asian communities.

Due to historic patterns of underinvestment, Black, Indigenous, Hispanic, and Asian-led firms often have smaller revenues and staff than white-led companies and may be better positioned to start with smaller contracts and grow. Also due to their smaller size, these businesses are the ideal candidates for subcontractors or to deliver on specialized requests that primary contractors are unable to provide. Investing in minority-owned businesses as Tier 2 suppliers can provide on-ramps for suppliers of color, enabling them to grow, scale, and add capacity over time.

Beyond tracking Tier 2 spend for themselves, research from the Center for Economic Inclusion finds that procuring companies have the ability to influence Tier 1 suppliers to track and adopt measures of their own progress in subcontracting across their entire portfolio with businesses owned by people of color, therefore further expanding their influence.

For example, in 2019, Ford launched the Widening the Inclusion Network (WIN), designed to “further develop their existing supplier diversity programs through coaching, mentorship, and thoughtful partnerships with other diverse businesses.” Ford is leading the way by investing not only in businesses, but in relationships.

At the Center, we help companies implement promising practices to build racial equity for their workers and their communities. The Racial Equity Dividends Index is one tool we offer to help businesses measure their progress toward building a racially equitable and inclusive workplace.

The Index includes 43 racial equity standards across seven categories that support racial equity in workplaces: Leadership; Hiring; Culture, Retention, & Advancement; Procurement; Philanthropy & Investment; Public Policy; Products & Services.

We know many companies are leading the way in tracking Tier 2 supplier diversity as a part of growing supplier diversity initiatives.

Encourage your company to join the movement and evaluate progress towards building racially equitable and inclusive workplaces – workplaces that pay dividends for everyone.

If your company is interested in taking the next step to measure and continue building a racially equitable and inclusive workplace, be sure to register for the 2023 Index by March 10 to receive your confidential results and find out how your organization compares to others in your industry.

• Register for the 2023 Racial Equity Dividends Index

• View the 2022 Index Report

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How the Racial Equity Dividends Index Helps Companies Build Racially Equitable and Inclusive Workplaces

Index Registration Open Through March 8

In January 2021, the Center for Economic Inclusion (Center) launched the first-ever Racial Equity Dividends Index (Index), a comprehensive analytical tool to help companies assess how their current policies and practices position them to win on racial equity and advance business goals, while also identifying opportunities for improvement. Since then, more than 100 public and private organizations have used this assessment to navigate their efforts to close racial wealth gaps.

We sat down with Nathan Arnosti (Director of Analytics and Index project lead) to talk about the Index, now open for registration through March 8.

Nathan Arnosti

What is the Index?

(Nathan) The Racial Equity Dividends Index (Index) is an analytical tool designed to support private-sector businesses in their journeys to build racially equitable and inclusive workplaces. The Index offers companies an intuitive, comprehensive, and measurable roadmap for progress on racial equity.

How can my business register for the Index?

(Nathan) First, eligible companies – currently, all private-sector organizations with offices in Minnesota – register online for the Index at the Center’s website. Then, once registration closes on February 24, registered businesses will receive the 2023 Private Sector Index survey and have approximately four weeks to complete it.

What information is gathered through the Index survey?

(Nathan) Through a series of multiple-choice questions, the survey asks companies to report their progress against 43 racial equity standards spanning seven dimensions of company operations, such as hiring, procurement, leadership, and products and services. It also provides companies the opportunity to gather and share data on workforce demographics and supplier spending.

What happens next?

(Nathan) The survey responses inform two sets of analytical Index products that are delivered to participating companies. First, participants receive a customized score report that provides their full answers alongside peer comparisons and recommendations developed by the Center for Economic Inclusion, so that companies can learn what their strengths are and where opportunities lie. Next, companies are included in the Racial Equity Dividends Index Report that aggregates responses across companies, identifying trends, elevating promising practices and case studies, and celebrating leading employers in each category. The 2022 Index report is available on our website.

Why is it important for companies to participate?

(Nathan) Spurred by the murder of George Floyd by Minneapolis police officers and the largest protests in American history in 2020, businesses pledged to reshape existing practices and committed record-setting investments in historically disadvantaged Black, Indigenous, Hispanic, and Asian communities.

At the same time, we know that businesses often lack a roadmap for what racial equity can look like or clear standards against which to measure their actions. They also have very limited information about how their actions compare to peers.

The Index is a tool designed to meet these needs – to help companies make tangible, durable progress towards building racially equitable and inclusive workplaces that drive innovation, productivity, retention, and belonging.

Who is the target audience?

(Nathan) We’ve designed the Index for all private-sector companies in all industries. In our experience, companies with at least 50 employees find the Index most valuable.

In 2022, companies of all sizes participated in the Index -- executive recruiting firms with fewer than 100 employees, to manufacturing companies with several hundred or thousand employees, to Fortune 500 companies, like Best Buy or 3M.

This Index offers companies the opportunity to learn from one another, regardless of sector or size, and I see that as a key part of its value. Participating companies were particularly compelled by the opportunity to assess their results alongside similar employers in a customized sector report.

What were some of the biggest learnings from the Racial Equity Dividends Index?

(Nathan) We learned that there is a tremendous appetite among private-sector leaders for analytical tools that offer a clearly defined, measurable roadmap to build racially equitable workplaces. In its first year, 40 companies that collectively employ more than 200,000 Minnesotans participated in the Index, even though it was a novel and unprecedented initiative. We’re excited to connect with even more businesses to encourage them to participate and take advantage of the Index this year.

QUESTIONS

For more information about the Racial Equity Dividends Index, please see the registration page, FAQ page, download the Index brochure, or email us at index@centerforeconomicinclusion.

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Our $65 Billion Opportunity: How Investments in Racial Equity and Inclusion Will Impact Communities and the Economy for the Better

Isaac Russell

By Isaac Russell, Director of Public Policy

On January 24, Governor Tim Walz made national headlines with his proposed $65 billion 2024-2025 fiscal biennium budget, the largest in Minnesota history. The Governor understands that addressing the state’s economic, social, and infrastructure needs on this scale requires big money. The state’s unprecedented $17.6 billion budget surplus will also come into play.

This is our moment -- Minnesota’s once-in-a-generation opportunity to chart and build a racially equitable, inclusive, and sustainable path forward that has rippling impacts on the state’s families and economy for years to come.

Policy Leadership
While I’ve led the Center’s public policy for just over a year, the organization has had a strong presence at the Capitol for nearly five. Bold social and economic policy change requires tenacity, strategy, and partnerships.

What I can also tell you is this: There has never been a better time for initiatives that have a strong racial equity component than right now. And with this unprecedented amount of money, I urge organizations that are doing racial equity work to offer solutions that are more systemic in nature.

New Day Dawned
As I walk the capitol corridors, the change in the air is palpable. It’s a powerful thing to witness leadership of color in both chambers shaping and passing legislation that prioritizes the experiences of and impacts to Black, Indigenous, Latino, and Asian communities in new ways.

Less than two months into session, this momentum has already resulted in significant policy change. The CROWN Act signed into state law. Juneteenth designated as a state holiday. Plus, there are proposals to establish new offices that prioritize Black health and missing and murdered Black women.

This is what progress and momentum looks like. My responsibility to lobby for the Center’s public policy priorities – Racial Equity Impact Notes, $10 million direct appropriation for job creation, and increasing the state procurement and preference equity cap -- is made easier by the partnerships there now that weren’t in previous years. We are strengthening relationships and forging new ones.

There is no time to waste. Let’s get into it.

$65M Budget Highlights
Here’s a budget breakdown of what I see as key investments towards a more racially equitable and inclusive state.

1. Investments focused on employment, wages, and wealth-building in Black, Indigenous, Latino, and Asian communities. This includes targeted investments in small business supports, workforce programs, and homeownership that recognize and address historic and systemic disinvestments and barriers that have hindered Minnesota’s economic competitiveness.

2. Investments in businesses along commercial corridors. Examples: the $85 million proposed funding to the Mainstreet Revitalization Fund along with funding for Small Business Navigation Program, Small Business Development Centers, and the Small Business Partnerships Program are critically important to creating jobs, building wealth, and growing our economy.

Through these programs, we hope to see increased coaching, access to flexible capital like forgivable loans, and small business consulting. We also need to ensure these programs have a strong racial-equity orientation with significant outreach to minority-owned businesses.

3. Advancing racial equity in Minnesota’s workforce. The Governor’s budget aims to increase family sustaining wages for Black, Brown, and Indigenous workers by recommending $60 million in training and employment services for workers traditionally overlooked.

4. Emphasis on developing workforce opportunities for family sustaining wages, which is one of the metrics we use to evaluate if our economy is racially equitable and inclusive.

5. Proposed funding for increasing home-care workers’ rates. This action would provide an increase to over 20,000 workers statewide. We define a living wage as a worker who earns at least $39,795 annually, of which only 49 and 44 percent of Black and Hispanic workers earn, respectively.

6. Expansion of the Child Tax and Dependent Credit. Estimates show this would help roughly 100,000 households with child-care costs. Families that earn less than $200,000 could get up to $4,000 if they have one child, $8,000 for two, and $10,500 for three. A child tax credit for lower-income Minnesotans could give families $1,000 per child, up to $3,000.

7. $1 billion expansion of housing funding. This amount includes funding for rental assistance, workforce and affordable homeownership, assistance to those facing homelessness, and workforce housing.

While $1 billion is a large number, even more is needed. The Twin Cities alone faces a housing shortage of at least 45,000 affordable units. This number does not take into account the struggles of families trying to purchase their first home. While there is some funding for the construction of affordable homes and home down-payment assistance, we know more resources are needed.

Committing to the Long Term

While the Governor’s budget makes historic investments in Minnesota and includes a strong equity component, we know that racial equity and inclusive growth will require sustained efforts across time and at different levels of government.

It will mean strong leadership to carry the work forward beyond the next two years and from one administration to the next to keep Minnesota moving forward for all Minnesotans.

We can do it.

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