Mellody Hobson’s modernized take on narrowing on the wealth gap
Hobson contends the integration of equity in government contracting needs to evolve with the times to include Black professionals in the service industry
Following the rise of Vice President Kamala Harris—at a time when the nation is praising Historically Black College and University alumni and Black Greek organizations—it could serve well to create policies aimed at advancing opportunities for Black professionals and entrepreneurs of these institutions, beyond student loan forgiveness.
Mellody Hobson, the president and co-CEO of Ariel Investments, thinks policymakers and corporations are still approaching equity and business with antiquated strategies by continuing to focus solely on traditional sectors of labor.
Hobson contends the integration of equity in government contracting needs to evolve with the times to include Black professionals in the service industry that account for more than 68 percent of the United States’ gross domestic product.
The businesswoman values efforts to promote equity in traditional labor jobs like construction and manufacturing, but she sees the professional service industry as the next frontier for Black wealth and policymaking.
“That’s making sure that corporations are thinking about professional services, financial services, technology, etc. in terms of being inclusive in their buying practices, using minority owned firms,” said Hobson. “I’m talking lawyers, accountants, and business consultants because that’s what most young people who are graduating from college today [are].”
Hobson’s suggestion to shift the focus of equity in the labor force to greater access to government contracts for Black service professionals seems to fit the current agency of the Black community.
HBCUs make up just 3 percent of America’s colleges and universities, but they produce almost 20 percent of all African American graduates and account for 50 percent of black lawyers. Although the amount of Black professionals continues to increase, the ability for these capable individuals to grasp government contracts remains stagnant.
For New York City comptroller and candidate for mayor Scott Stringer, he says bringing Black professionals into the fold has been a priority for his administration. He said expanding such opportunities to people of color and minorities has been a focus of the New York City Employees’ Retirement System (NYCERS) Pension Fund.
To ensure the investment firms working with the pension fund reflect the diversity of the city, Stringer and trustees require firms to provide data on their company’s race and gender before going into partnership.
“It’s good economics. When you have diverse firms investing your money, the money performs well,” Stringer said.
As the NYCERS trustee board gained diverse membership, a greater emphasis on promoting equity through investments emerged. Henry Garrido, executive director of District Council 37, NYC’s largest municipal employees union and NYCERS trustee said the labor practices and companies’ impact on communities of color began to share priority with the investments’ rate of return.
“When we set our investment philosophy, we look at the parts that are social-environmental governance principles,” said Garrido.
The pension fund’s inclusion of Black financial advisors and consultants exemplifies the efforts Hobson seeks to see applied on a national level as a tool to close the wealth gap. Not only did the city partner with Black financial advisors, it learned how to make profitable investments that aided communities of color in the process.
“There’s enough Black political power now,” said Jumaane Williams, New York City public advocate and a NYCERS trustee. “We should be demanding things and making sure that contracts don’t go through unless those demands are met.”
If elected mayor, Stringer plans to govern New York City with a holistic approach based on the success he’s had with diversifying the pension fund, and promoting equity in city contracts will be at the core of his policies.
“The tools I have employed as comptroller have worked in my office and in other offices. It’s just having the political will,” said Stringer. “The more diverse companies we have doing procurement work, the more we create wealth in all of our neighborhoods and then we get to lift up everybody.”
Trustees of the NYCERS pension fund are continuing to integrate equity into their investment decision making. Both Willams and Garrido view the objectives as intertwining goals that benefit all stakeholders.
“We have the ability to put brand new systems in place across the board,” said Williams. “There has to be an intentional effort to do this.”
Jessica A. Floyd is a political producer and correspondent for TheGrio whose reporting has been featured on HuffPost, POLITICO, CNBC, Federal Times, EBONY and several other national news outlets. Her focus has been national domestic policy and the intersection of race and politics.
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