Banner for How New Partnerships are Advancing Economic Mobility – Initiative Launch Event - June 3, 2021

Location: Virtual

Introduction: Excerpts from the series

Raphael Bostic: You know, so many of our public programs, you're paid on the throughput, not on the output. So as the number of people who you get in, that's what you get paid for. And we don't really reserve funds or tie the payment to what outcomes look like.

Neel Kashkari: I'll tell you, the best worker retraining program possible is one that a company does itself to say, you know what? I've got this equipment. I will teach you how to use this machine.

Sir Ronald Cohen: We need government to step in and say, the companies have to publish impact figures, which are audited just like their financial figures.

Gayatri Agnew: The maturity of metrics, with which we use to measure the social value or social impact, negative or positive, in communities, I think that's to me where the most collective effort is needed.

Deval Patrick: Successful innovation, in my experience, requires we raise our tolerance for failure.

Paul Ryan: Focusing on pure outcomes is a better way of leapfrogging partisan ideological fights.

Michael Reeser: It's the imperatives that a new formula creates on your internal culture, where the real benefit lies.

Tracy Palandjian: And the Korean pack bond model is built to eliminate these barriers to access, so that more people with potential and without assets can get the skills they need to build better careers and better paying jobs.

Lisa Lewin: It's really, really critical to have that deep understanding of the nuances of the population. The things that are going to affect their experience, both inside and outside of the classroom, and impact their experience in the job search.

Tim Spurlock: Some of our graduates will be CEOs. Some of our graduates will start their own companies. Some will be service writers. Some will be master technicians. That's really what we do, is we give them a portal into the business, and we give them a purpose.


Sarah Miller: Hello. Welcome to the Workforce Realigned launch event. I'm Sarah Miller with the Federal Reserve Bank of Atlanta Center for Workforce and Economic Opportunity. My colleagues at Social Finance and the Atlanta and Philadelphia Federal Reserve Banks are pleased you all have joined us and look forward to an interesting conversation with our speakers, as well as the work ahead. We will center our discussion today on how new partnerships focus on outcomes-based funding for workforce development or improving and advancing economic mobility within the labor market. What you've just heard were voices from the Workforce Realigned podcast series, which accompanies a book, highlighting 19 case studies and emerging ideas. The Workforce Realigned series, including the publication podcast in this event today, all build toward action groups to be convened later this year, which will focus on adapting more financing innovations into practice, in communities across the country.

We will cover these aspects of the work and the discussion today. You can find out more detail about all of our efforts at Before we shift to our speakers, we have a few housekeeping items to cover. We're recording this session, and we'll provide that link post-event. We appreciate all of the questions that you've submitted during the registration process and have used those to guide our conversation today, but we'd also like to engage with you during the event.

We will use Slido to launch a few polls and get a sense of your interests and pose some questions to you. You'll see the Slido application on the right-hand corner of your screen, or you can go to and use the hashtag #WorkforceRealigned to find this event. Posing questions will pop up periodically, where we can provide your responses in addition to offering other questions, ideas, and reactions to the discussion today. We look forward to engaging with you as we work to convene action groups later this year. Thank you again for joining us. We look forward to working with you all. With that, I have the high honor of introducing our opening speaker, Raphael Bostic, president and CEO of the Federal Reserve Bank of Atlanta. President Bostic, welcome.

Raphael Bostic: Hi, Sarah. Thank you, and hello everyone. It's really good to see you all. I wanted to offer just a couple of reflections about today's events and the program Workforce Realigned. At the Atlanta Fed, we have been using the tagline "an economy that works for everyone," and have really tried very much to be looking at the world through this lens as we consider our policies and ways that we might help make a difference. If you think about what's happened over the last 15 months or so, what's been clear is that the economy isn't working as well as it might for everyone. The pandemic has revealed pretty significant disparities in terms of economic security, as well as access to opportunity. We've seen this by gender, by race, by skill level, and by level of income. This has been a pretty odd or unusual recession in that the low-skill jobs, the lower-wage jobs, are the ones that have been most affected.

Now, in addition to this, we've had these long trends about structural change, and that structural change has also put pressure on people who are thinking about ways to participate in the labor market. Things like automation, how we incorporate technology to work remotely, all of those sorts of issues, they had been out there for a long time and business leaders had been considering this, but all those considerations accelerated during the pandemic. We saw a heightened reliance and turning to technology to really affect how work is done and how goods get produced, and this has been important. One thing that I've seen as I've gone around is that as these changes have happened, as structural changes occurred, there are new jobs that are emerging, for sure, but those jobs require really different skills than the jobs that people are being disrupted out of.

As we think about the labor force, we really have to think about how we apply the existing labor force to that reality. I think there are really two things that have emerged as real dimensions. The first, and it's one that we're seeing more and more recognition of, is that there are a lot of workers out there that have skills, even if they don't necessarily have the degree or the credentials that would signal that so clearly. There are estimates that suggest that this is upwards of a hundred million Americans that have skills that can be applied to these new jobs. We need to find ways to get those people identified and connected to those jobs. But then there's a second reality, which is that we have a lot of unemployed people. Just in February of 2021, there were nearly 6 million of these skilled workers who were unemployed.

For those folks, we might either need to change their networks or help them refine or learn new skills. This is going to be an important thing. As I think about this challenge and the issues is really around career pathways that we have for people that can spur employment, that can spur economic growth, and that really serves effectively both workers and employers. So how are we going to make progress here? I think that this is really the crux of this initiative. It's really about creating pathways to find family-sustaining jobs. We need to do things to break down the barriers that are preventing us from doing this. There are barriers in multiple dimensions. We have employers on the employer side that are not perhaps investing as much as they might in frontline worker training. We have students, the workers themselves, who are not finishing the degrees that would allow them to have those skills to make themselves more attractive to employers.

We also have the workforce development infrastructure itself that sometimes is not aligned in providing the training pathways to get people the skills that make them accessible. We need progress on all of those dimensions. This is something that we at the Atlanta Fed have been working on for some time. The idea is to try to create opportunities for workers and workforce development practitioners, to develop the tools and to apply them and deploy them in ways that make positive change. Now, I'm going to say a couple of things in what we do. First, we have the Workforce Realigned podcast series and book that we're celebrating today. This is really an important vehicle that I think has the potential to make a really large difference.

We also at our Bank have something that we call the Center for Workforce and Economic Opportunity, and this organization, it actually started just when I started at our Bank, it is doing a lot of things. It has some tools online to help workers and employers figure out what's happening with the labor market. One of my favorite tools is an Opportunity Occupations Monitor, which gives people a picture of jobs at the county level, those jobs that don't require extended education but that also provide a real living wage. And county by county, we identify the jobs that are doing that, that are most accessible and available, so that workers actually know what's going on. We also have an Unemployment Claims Monitor, which gives us an opportunity and a snapshot of those markets where unemployment is either increasing as an issue or starting to resolve itself. And then we did something relatively recently that I actually really liked, it's called the Ask Us Anything webinar series, where we just make ourselves available and try to answer questions that people have about issues around workforce development, skills development, and how labor markets are evolving.

Just yesterday, there was a report with McKinsey under the Rework America Alliance banner, and that's a partnership that we have with the Markle Foundation and a number of others, that talked about things and focused on pathways to good jobs that don't require degrees and concrete actions, those opportunity occupations, but also talked about things that practitioners and policymakers can do in ways that can really make a difference. It has a data tool associated with it that hopefully practitioners will be able to use to help workers make good decisions and productive decisions about how to engage. I would also say that this tool is really designed to talk about industries and occupations and the number of jobs that are available in ways that I hope will allow workers to rethink and reimagine what the possibilities are for workforce development.

We have a number of other initiatives and I'm running short of time. I'm not going to get into them too much. I would mention our Advancing Careers for Low Income Families initiative, which is about benefits cliffs and how we might reshape incentives. But also, the Rework America Alliance and the U.S. Chamber of Commerce we have partnerships with as well. And in all of these, I would say there are four characteristics that characterize what we do. Four dimensions. One, is that there's research that undergirds all of this. We're really committed to evidence-based policy and its importance. Second, we really do commit ourselves to convening people and bringing people together to have different conversations than we might've had in the past. Third, we're trying very hard to facilitate networks and have those networks inform how people on the ground are approaching these problems and finding real solutions. Finally, we're trying to promote what works. If you think about the Workforce Realigned initiative, it has elements of all of those things, which makes this really something that is natural for us to participate in, and I'm really pleased that we're doing that. We're going to make it as easy as possible for information to get in the hands of the people who need the knowledge to make decisions and choices about how we can improve our infrastructure for workforce development and skills retraining.

Ultimately, if we are successful on this, we will make progress on increasing economic mobility and resilience, which is one of the high strategic priorities that my Bank has. And if we can make progress in terms of those dimensions, resilience, and mobility, we will actually wind up with an economy that does much better at working for everyone.

I'm really excited that we are part of this Workforce Realigned initiative. I'm really looking forward to the conversation for the rest of this program. Now what I'm going to do is turn this over to a video that we have. In this video, we're going to raise up three voices from workers who have been impacted by some of the programs described in Workforce Realigned, this book that I hope all of you take a look at and learn great lessons from. Thank you for listening and enjoy the video.

George Robertson: I served in the Army, stationed at Fort Campbell. Stayed for 17 years. I served in Iraq and Afghanistan. Returning to civilian life was traumatic. It was chaos. There was no order to anything. The biggest challenge for employment is knowing what and where you fit in this new environment. It's important to have Veterans Care program because the only thing you have to do is decide what it is that you want to do. And the program itself will go out and they will look for the job for you. The stress of you trying to find that job, the stress of you setting up the résumé, the stress of you knowing what to say at an interview, it's gone because the program itself will sit down and they'll guide you through it.

Claire Parascandalo: In high school, I ended up 19 with a baby. And I was a stay-at-home mom for 11 and a half years. If you're out of the workforce for that long, all of your skills pretty much become obsolete. I'm Claire Parascandalo, from sunny San Diego. I am a mom, a filmmaker, a board game enthusiast, a student, studying digital marketing through an ISA [Income Share Agreement].

Narrator: By Claire being able to pick up this program, this takes her into the next tiers of her career.

Parascandalo: I found a niche. I found a niche that I like. I like looking at SEO [search engine optimization]. And I like looking at the analytics and this program was like the doorway.

Angel Tate: My name is Angel Tate. I graduated in April of 2020 from General Assembly's [GA] user experience design immersive. I think COVID, to me, revealed that nothing is permanent. Some obstacles I faced were being a woman in the tech field and also having the money to go back to school. And I was like, I don't know where I'm going to get that money from. This feels totally impossible. And when I looked at GA, I feel like I saw people who looked like me in some capacity, who were able to do that same thing. The ability to not have to pay it back until I made a certain amount from a job, a full-time job, was a huge relief. If I think about the beginning of 2020 and the end of 2020, it's been awesome. And that's weird because we're in a pandemic, but I started off excited for school and I'm ending excited for a new job opportunity.

Nicholas Kristof: Hi, I'm Nicholas Kristof, a columnist at the New York Times, but maybe more relevant to this discussion, I'm a farm kid from rural Oregon. I'm speaking to you right now from the family farm. This is one of those places that the issues that we're talking about today that makes it relevant. The stakes here could not be greater. Sometimes one can think of economic mobility or a Workforce Realigned in theoretical terms; here they play out truly in life and death. Let me tell you a little about the area. The nearest town is called Yamhill, population 1,000 on a good day. Traditionally, the economy here had been very vibrant. It was based on farming, and timber, and light manufacturing. The biggest employer was a glove factory. It had resulted in families really doing very well for themselves when I was a kid.

For example, the kids who got on the school bus right after me every morning were the five Knapp kids. The oldest was Farlan, who was my grade. Then his brother Zeelan, his brother Nathan, their sister Regina, their baby brother, Keelan. Their mom drove a tractor. Their dad had a good union job laying pipe, mostly sewer pipe. And they had parlayed that into buying their own home. When Farlan turned 16, the family got him a Ford Mustang. We were all incredibly jealous. Then those jobs essentially went away, and I was covering humanitarian crises around the world. I came back to visit the family farm and I'd see a humanitarian crisis unfolding right here.

Farlan lost his job. He self-medicated and died of liver failure as a result of drug and alcohol abuse. His brother Zeelan died in a house fire when he was passed out drunk. His brother Nathan blew himself up cooking meth. His sister Regina died of hepatitis from IV drug use. And baby brother Keelan died right at the beginning of the pandemic after he lost his job; he overdosed with heroin. And their mom is still alive. She's in her eighties. Every day, she walks by the hill behind her house to visit the graves of five kids. Smart, talented, so much to offer, all dead. And you know, it wasn't that one family, a third of the kids on my old school bus are dead from deaths of despair, drugs, alcohol, and suicide. The walking wounded as these folks are, they also inflicted great damage on the area.

We were really proud of our rural community values, our strong social fabric. This is hard to talk about, but two kids on a bus, both two boys, friends of mine, were both convicted of raping young girls. The trauma and damage that so many folks here not only suffered themselves, but inflicted on others around them, has been just heartbreaking to watch. What went wrong? Back in the 1990s, Yamhill was pretty much lily-white. There's now some Latino presence, but it's mostly white. And back in the 1990s, people here look at struggles in African American communities and point fingers and say, well, it's that culture. It's those deadbeat dads. It's all those bad choices. It's lack of personal responsibility. And meanwhile, there was a great Harvard sociologist, William Julius Wilson, who said, no, it's about job losses.

Professor Wilson was exactly right, because when jobs left lily-white areas like Yamhill, or Kentucky, or northern Maine, the same kinds of pathologies unfolded. What happened to good jobs in Nevada? Raj Chetty, the Harvard economist, calculated it for the cohort born in the 1940s and by age 30, 90 percent of people were earning more than their parent of the same sex that they earned at that age. By the cohort born in 1984, only half were earning as much as their parent had at that age. This has been particularly harsh for people with limited education. Especially those who don't even have a high school degree, which is what has been happening for many of my friends here. And all five Knapp kids, none of them had graduated from high school.

Those folks are pretty much cooked. Another metric of what has gone wrong, you look at nonsupervisory weekly wages, according to the BLS [U.S. Bureau of Labor Statistics], which is one metric of blue-collar incomes. In January of this year, they were lower adjusted for inflation than they had been in December 1972. Two generations that had lost incomes. I think that one thing that I didn't appreciate until my community disintegrated was I thought of a job as sort of an income stream. Somebody loses a job, that's a process for creative destruction, and then we can compensate the losers out of the winners, and that didn't happen. Also, one thing that I've seen here is that a job is so much more than an income stream, especially for men. I think it has often been very much a source of self-esteem, of identity, of purpose. And when those folks lost those jobs, then they self-medicated, they got criminal records, and became less employable, and also less marriageable, in ways that just...the social fabric disintegrated.

All the institutions here pretty much failed those kids. Schools kick kids out. Government didn't adequately help them. Here, I'd say the only two institutions that really served those who were left behind in that way were the military, that those kids who could pass a drug test and get that high school diploma and enter the military, that was a lifeline for them. The other was the Mormon Church, which for whatever reason, seemed to provide immunity from these problems. What has struck me is that this is a rural farm area, but these kinds of problems and pathologies are found all across working-class America in Black, Brown, and white areas. It's particularly striking people with limited education and limited employment opportunities. I think there's often a misperception in the U.S., people say, "Oh, it's about globalization, it's about technology. It's about bad choices."

Well, globalization and technology are real challenges, but these also affect Canada, they affect Germany. Those countries haven't seen, for example, the U.S., America, lost 91,000 Americans, 91,000 to overdoses in 12 months ending in October.

Those countries haven't seen the same thing. They didn't see life expectancy go down for three years in a row, even before the pandemic. Because of suicides, because of overdoses, because of alcoholism.

Our conversation today is in part about new partnerships to advance economic mobility. And it resonates very much with me and with this area because in the past that was what created opportunity in places like Yamhill.

This is a very conservative area, very pro-Trump, and people around here, they say, oh, it's all about the frontier spirit, and pioneer ethic, and self-help. I point out to them, why did the pioneers come out on the Oregon Trail? It was because of a government program for the disadvantaged. It was the Homestead Act and the homestead programs. Of course, they were very discriminatory, but for struggling whites, they made a huge difference. Then you had public high schools, you had land grant colleges, you had the G.I. Bill of Rights.

In 1935, in the New Deal, my old high school was built for $27,000, a federal grant. That hired 90 people, but more important, it invested in the educational capital of this community, and it's still being used.

It's a struggle in communities like this, but there are...we have seen how investments in these kinds of partnerships can advance economic mobility in ways that do so much more, and knit together that social fabric, and keep people alive. Thanks very much for joining us and I'm delighted to pass the microphone on to Tracy Palandjian. Tracy.

Tracy Palandjian: Hi everyone, thank you so much Nick, for that powerful message. And thank you so much to our friends at the Federal Reserve Banks for your incredible partnership over these years.

Before we move to our panel, I want to just talk briefly about the book, how it came together, and the change that we hope it will spark. As everyone has mentioned, the book is called Workforce Realigned: How New Partnerships Are Advancing Economic Mobility. It's the product of a two-year partnership between our team at Social Finance and the Federal Reserve Banks of Atlanta and Philadelphia. But it's a reflection of a much longer, deeper set of partnerships.

The 30 or so authors who've contributed to this book include elected officials, agency leaders, university chancellors, economists, and training providers, philanthropy, employers both large and small. The chapters they wrote call out the common struggles. Many of them Nick just talked about, of students and workers trying to find good jobs, purposeful work in the face of poverty, structural racism, mental health challenges, and so, so much more.

What these stories also tell us is that our workforce system today is no longer working for the vast majority of Americans.

The system that once enabled refugees and immigrants who came to this country with little, and to find a place in the middle class, that's faltered. As a first-generation immigrant, this is a sad injustice that I take to heart. Access to economic opportunity today is just far more difficult and too risky than it ought to be. The status quo isn't working. Not for our public workforce system, not for higher ed, not for business, and most importantly, not for workers.

Fortunately, there are promising programs and innovative partnerships out there. Many of them President Bostic started highlighting. Programs that could help expand opportunity to those who are unemployed and underemployed. Those who've been excluded and marginalized. As President Bostic said, the economy is changing fast and the skills needed tomorrow are hard to predict. But the burden of that unpredictability, that uncertainty, hasn't been shared equally. All too often, we're just willing to accept that an allocation of risks that lacks intentionality, you know. Students take on huge risks, both time and money, to go to college or get a credential with no promise that they'll pay off. Governments take on huge risks, funding job training programs, praying that they'll work, but with little certainty that they are actually delivering results for our communities. Employers are reluctant to invest in training, despite talent gaps in high turnover. We need to re-interrogate the way the system is set up, and a more deliberate approach to risk allocation has huge potential to improve outcomes for all stakeholders.

Ten years ago, I cofounded Social Finance, a nonprofit focused on building innovative partnerships and investments across the public and private in the social sectors. In the year since, we've built tools like the Korean PAC bond, the Social Impact bond, and other tools to realign siloed systems to measurably improve lives.

We believe that uncertainty can actually be an opportunity not to step back, but to lean in and an opportunity to build smart partnerships designed around results. That means structuring government contracts that encourage outcomes over outputs and adaptability over compliance. That means rewiring the talent finance system so that students only pay for that education if it helps them get and keep a good job. That also means helping businesses test out nontraditional approaches to professional development and employee supports and pay only to the extent that these programs are successful at recruitment and retention.

Of course, we're not alone. There's a growing cadre of like-minded organizations developing smart, adaptive cross-sector partnerships that are responding to the changing economy. Together with the Atlanta Fed and the Philly Fed, we decided to hunt down these examples, these great examples of this new breed of partnerships. These partnerships work through different mechanisms and involve different actors in the ecosystem, but they have a few things in common. They expand access to opportunity, they support learners beyond the four walls of a classroom, they carefully balance incentives, they use data adaptively to figure out what's not working and what's working, they are accountable for results, and they pay for success.

The book highlights 19 case studies. They include efforts from pioneering states like Massachusetts and Rhode Island that have linked the state's workforce funding to long-term worker outcomes, releasing payments on the basis of results achieved.

Higher-ed initiatives in Texas and Virginia that have rewritten the public funding formula so that it's no longer based on filling seats, but rather on the college's ability to train and place skilled graduates with local and regional employers.

Cities and counties like Philadelphia and San Bernardino who've partnered with employers to set up funding structures tied explicitly to worker success. And efforts all around the country and San Diego, Indiana, Ohio, and beyond, that have worked to de-risk the cost of education for students and by addressing the 1.6 trillion student loan market with new arrangements that protect learners from downside financial risks.

In addition to highlighting these partnerships in progress, the book also looked at lessons from the past. Former Speaker Paul Ryan's chapter, for example, takes us through the spotty history and unintended consequences of past federal performance-based programs, reflecting on hard lessons learned and how they can inform our work today. There are other chapters that focus on the emergence of ISAs, income share agreements and Korean PAC bonds. Their promise and risks, and how they should be regulated.

There are chapters that look ahead to states building outcomes funds for economic mobility, companies partnering with nonprofits to reduce turnover, a grand challenge for workforce boards to retrain workers displaced by COVID, and rural communities, like in Oregon, working with employers to incentivize investments in broadband and digital access.

All in all, the book and the podcast series suggest optimism about the future. There's no doubt we're in a period of profound change and accelerating uncertainty. But we believe that uncertainty, especially in the wake of the pandemic, represents a powerful opportunity to build back better, ensuring that the workers who are powering our economy are set up to share in its growth.

The authors in the book all have different perspectives, backgrounds, and beliefs, but I think that they would all agree that we need to be more strategic and more thoughtful in rewiring a more equitable and resilient workforce system. That's what Workforce Realigned is all about. We hope that the book, the podcast, the action groups to come will inspire all of you today, so that together we can create an economy that's stronger, fairer, and richer in opportunity.

This is a start of a conversation I hope we'll continue to have together. To kick off this conversation, it is my pleasure to introduce our panelists.

Gina Raimondo is the 40th U.S. secretary of Commerce. Most recently, she served as governor of Rhode Island, during which she brought pre-COVID unemployment to its lowest rates since 1989 and hopes for a record number of new businesses and new jobs in Rhode Island. Having begun her career in the private sector as a venture capitalist, Secretary Raimondo has a keen appreciation of the power of partnership between business and government and expanding economic opportunity.

Darren Walker is the president of the Ford Foundation, a $14 billion global social justice philanthropy. He's the chair of the U.S. Impact Investing Alliance, a member of the Reimagine New York Commission, and served on the UN International Labour Organization Commission on the future of work. Under Darren, Ford became the first nonprofit in U.S. history to issue a $1 billion social bond for proceeds to strengthen and stabilize the nonprofit sector amidst the pandemic.

Brian Moynihan is the chairman and CEO of Bank of America [BofA] and leads a global team of more than 200,000. Like Darren, Brian is an outspoken advocate for stakeholder capitalism and serves as chair of the World Economic Forum, International Business Council, and as a member of the Business Roundtable, and the Vatican Council for Inclusive Capitalism, among others. Brian is widely known for his deep commitment to diversity and inclusion for which the bank has received numerous best places to work awards.

We're delighted to have you all here. Welcome, welcome. As we get under way, I'll be asking a mix of prepared and audience questions, and our team will also be watching out for Slido questions. To our audience, please do share your thoughts and your questions and keep the conversation going.

To get us started, I'd love to turn to each of you. What do you see as some of the key challenges we're facing around economic mobility in the country? Let's start with you Gina, Secretary Gina Raimondo.

Gina Raimondo: First of all, thank you for having me. Second of all, I think everyone should know that Tracy and I have known each other for 35 years and have been friends that long, because we met like our first day of our first year of college, and I have followed her around and admired her since. It's a great pleasure for me to be here with you.

The key challenges when it comes to economic mobility...there are so many. Look, there are inequities across America that hold people back, inequities in our public education system. A third of people who live in rural communities don't have access to high-speed broadband...lack of access to affordable job training.

This isn't political, but I would say one of the reasons I'm so proud of the president is that he's put forth a very bold plan. Whether or not you agree with all of it, he's calling for big investments to finally close the digital divide, close the training divide, and take an equity lens to everything that we are doing, which I think is vital. And catch up for some of the investments that we have been lagging and make sure that they are equally distributed. I think there's so many things to identify, but I think it's important that we're real about the barriers, real about the barriers to opportunity, and take an equity lens to everything that we do.

Palandjian: Thanks so much, Gina. Yes, smart investments aren't political, just like the Fed is simply, as Raphael said, an economy that works for everyone. Darren, can I turn to you? What do you see are the greatest challenges?

Walker: Thank you, Tracy, my friend, it's so great to see you. And of course, Brian Moynihan, one of the most admired CEOs in America, and my friend and the great secretary of Commerce who I have known and admired, and so delighted that she is leading this important role for the president in our country.

I believe there are many challenges, but I don't want us to be overwhelmed because I think the larger challenge of the structural inequality that exists in America today is significantly a function of the way our economy is organized. The fundamental labor capital quotient, that calculation needs to be reconsidered. And we need to think not just about the future of work, but the future of workers. If we are to see the kind of economic mobility that allowed someone like me to go from the bottom 1 percent to the top 1 percent in this country, then we are going to have to deal with some of these fundamental, structural issues.

It's true, there are lots of things that we need to do tactically, like think about and implement a smart redesign of the workforce development system. But if that system operates within a larger economy that is structured to extract most of the economic benefit to people like me, to people like Brian, to people like you, Tracy. All of us are high-income people. We have assets. This economy works for us. Over the past year people like us have benefited tremendously in the midst of a pandemic when most Americans have fallen behind. We have to think about the structural reforms, and that is why we have to think not just about workforce policy, but about economic policy because that is the foundation that makes it possible for us to have shared prosperity and economic mobility.

Palandjian: Thank you so much, Darren. Brian, on to you.

Brian Moynihan: Thank you. It's a pleasure to be here. Darren, we have the pleasure of working on many things together, and Secretary Raimondo and I've had a long working relationship going back to some of the times I've spent in Rhode Island in my past lives.

Let me just start the opportunity. I'm going to come at this a little differently because I got to connect with what Nicholas was talking about just before this. We in Charlotte, when Raj Chetty and the team produced those results, found a city which is a dynamic wonderful place that was 50th out of 50 on the rankings of opportunity. That sort of shocked the community, so what they did is they put everybody in a room and said, so what do you think the factors and outcomes are? They came up with a series of factors, housing, and education, and different types of things. And in the questions, what can the business community do about it?

We took a business system approach. We sat there and said, OK, if you take a kid that's born through pre-K, and read by third grade and middle school STEM, and educate high school principals in all the ways we could do it, but more relevant to this thing is we also identified in the city of Charlotte, likewise in other cities, we've been looking at this, that there are around 40,000 people between 18 and 24 that were exactly what you described earlier in that day. They've sort of gotten detached, but never really attached. They went to high school and graduated, maybe went to lower community college, or move into jobs. Those people with the right skills could be moved.

And so the barrier was find them and identify them, and then focus on them, and frankly get the big companies in Charlotte to agree that we would identify jobs which we ought to be able to build the skills and then go find programs to build those skills, not the other way around, to go into your point about some of these programs work and some don't. What are the jobs that we could do and aim at that group of people, and start just bringing them in and then attach them to great companies like those companies are, which have great work career attitude toward hiring, which have great college benefits?

Instead of the kid go into community college and spend a lot of money and never kind of graduating, you're saying, no, come work for us, we'll train you, we'll get you working here. And then tuition reimbursement, you go to community college, you can just study with $500 a year of our money to do it.

You can learn the skills are real to this job. I'd say that distinction that the barriers are A, finding the people, and B, taking a business sense...have the private sector business sense to say, let's solve this problem in incremental and measurable parts. The barriers are built by society at large, we contribute to them as parts of that society, as Darren said, but our duty then is to figure out a straightforward way to fix it. And work and business make a difference and where it's really up to policymakers, and that's what the business community tried to do.

Walker: And Tracy, I have a question though for Brian, for you, and also for the secretary, because I think we hear these stories and Brian is absolutely right. The story of what BofA has done and to mobilize in the region in Charlotte there is remarkable. But we have a lot of one-off stories like that. And I think a really important challenge, and I know the secretary is focused on this, is how do you weave together a systemic response that moves us beyond each CEO? Because when you talk to Ginni Rometty [former IBM chairman, president, and CEO], she has an IBM story, like Brian's story. When I talked to Chuck Robbins [Cisco chairman and CEO], he has a Cisco story, like Brian's story. What we haven't done is moved to scale, to do what the Germans have done, to do what other nations have done, that has made it possible to have this kind of success, be not just a group of anecdotal one-off stories.

Moynihan: There's two parts to that. One is that's the focus on where we can help the education system. If you think about how do you truncate this from happening in the future? We couldn't fund in Charlotte the pre-K, because that's the responsibility of the government. That's where the government came in to the legislature, but we did help them build infrastructure, so it had more probability of success. And then we found out that infrastructure was much more about pragmatic things.

Then if you looked at the read by third grade, that was more volunteer and getting tons of our teammates, not Bank of America's, I'm taking all these companies in. Then it was middle school STEM, how can we fund that? Then it was this thing called, for example, Road to Hire, skills-based training for technical at the high school, and getting through the educational system to make that happen.

No one company could do it. It took all the companies working together. That's what we've seen in some of the dialogues we have with OneTen or with the other groups, MACP [Massachusetts Competitive Partnership] in Boston, and John Fish and I are working on it with a group. What you see as a commonality is it's going to take all of us to bring it to scale, because otherwise we end up with a bunch of philanthropic charitable events that are done. And then secondly, you have to think about all the parts of the equation. In Rhode Island, as the secretary knows, we helped build a training program for principals. Because if you listen, the great business writer, Jim Collins, his new study is saying it's all about the principal rule. Urban, rich, poor school district, it's all about the principals. We started on that and that's taken off and more people have gotten funded. It takes the business community to scale it because they have the mindset about scale, but it takes some working among community together, because no business is going to carry a community. Those days are gone.

Palandjian: That was great, Brian, but before we go back to Rhode Island, Gina with your secretary hat, how do you make this more systemic so it's not a one-off?

Raimondo: It's interesting. As it relates to job training and education, most of the money comes from the federal government, or state governments, but mostly federal government, and I will say much of it hasn't been historically well spent. In my estimation, there's too much of a focus on compliance, like compliance with all the rules, and not nearly enough of a focus on performance, outcomes, are people actually getting jobs?

That's what we tried to do in Rhode Island, and we partnered very closely with Brian. The government has to change the standards and change the programs so that success isn't compliance, success is how many people got a job, or got a raise in a job. Sometimes it's not just taking an unemployed person and employing them, it's taking someone who's maybe underemployed or in a lower-skill, lower-wage job and upskilling them to get a different job in the same company. The point of it is, I think that the emphasis has to be from the beginning on outcomes. Government has to set the table that way. We should be held accountable that way, frankly; programs that don't yield the outcomes shouldn't be continued. Then, bring business to the table. I think that whether it's a governor or whether it's the federal Department of Labor or the secretary of Commerce, the government can be the convener, can put the strings attached to the money. Then the business community has to come to the table at scale. Darren mentioned the German system. We need to move in that direction. Half of kids who go to college in America don't graduate. It is a broken business model. You'd be out of business, Brian, if that were your business model. Half of them drop out, no degree, with debt, maybe no job. We have to provide people an opportunity to get the skills, to get a job that isn't four-year college. I think the federal government has a huge role to play in scaling, by using the money we currently allocate to job training in a different way, with the focus on outcomes in greater partnership with business.

Palandjian: That's great. I would just do a quick plug that Gina coauthored a chapter in the book talking about this experience in Rhode Island, how do you actually buy outcomes instead of just spending money on compliance and outputs? Let's go back to this theme of how we can make this more systemic, more scalable, business and government working more holistically together. I'll go back first to the secretary and then ask Darren about his recent efforts in Connecticut with the state treasurer, and then Brian, your incredibly exciting $1.25 billion program. Gina, where you sit, and you started touching upon this, this idea that there is workforce development and then economic development under commerce. This kind of bifurcated way of looking at the world is no longer the way of looking at the world in the future, right?

How do you think about jobs of the future as part of the equation inextricably with industries of the future, so that we can actually train people into offshore wind, and industry 4.0, and IT, and health care, and all these great jobs? How do you set up a system so that you're activating all of government, all of the sectors coming together so it's not just the Department of Labor's job or the Department of Education's job in really thinking about industry competitiveness, worker success, and all the things that we care about? I'll first go to you, secretary.

Raimondo: I think there's a growing recognition that investments in people yields economic development. What is economic development? Jobs. Investments in people and in human capital... People are starting to realize that that is economic development. It shouldn't be separate from economic development. It is economic development, so certainly, that's my focus here. Actually, that's a good part of the reason I took this job, was to take that mindset into this administration, to work hand in glove...commerce, labor education, hand-in-glove government with the business community to set up the structures. Like Darren said, we need structures, whether it's community college or workforce development boards, on-ramps for everybody to be able to get the training they need.

I would love to hear Brian's view, but almost every CEO that I talk to these days says that in their top three concerns is workforce. It doesn't matter the industry. They can't find people. They're holding positions open. Their existing workforce is pretty exhausted. Clearly, the system is broken. Meanwhile, there's so many people who want to work and can't find a good opportunity. A long-winded way of saying, if you think about where we're going to go in terms of American competitiveness, competing in AI, competing in technology, competing in semiconductors, competing in big data, talent is the name of the game. This is, as you say, economic development.

Palandjian: Darren, do tell us more about your exciting announcement with the Connecticut state treasurer and this corporate call to action to this last point that the secretary remarked.

Walker: The corporate call to action has a very specific agenda around diversity. I want to be clear, it's not a broad-based workforce. It specifically emerged from treasurer Shawn Wooden's conversation with some of their investees, who the Connecticut state treasurer wanted to demonstrate in the wake of last year's racial reckoning in corporate American society, more broadly, how corporations could ensure that the pledges that were being made last summer were actually followed through on and implemented. This call to action is 18 major financial services companies, including Bank of America, who have committed to a number of concrete steps and actions to diversify, and to build wealth, and to provide mobility for African Americans and BIPOC [Black, indigenous, and people of color] employees, and to work with the communities that have historically not benefited from economic opportunity. It's a really exciting pledge, but it is again nested within a larger challenge.

Yes, if you look across every indicator for workers and you look at Black workers, the indicators are worse. The indicators of well-being across any of those issues, African Americans generally perform more poorly. The benefit now, as we think about how to rebuild, as the secretary has said, certainly this administration has made equity and opportunity critical ingredients for program and policy. I think it's an exciting opportunity. I think, though, we can't lose focus on the fact that all workers have lost ground. All nonsupervisory workers have lost ground. This can't be seen as a Black, white, Brown, but this is all workers in this country who are not of the managerial class have lost ground and continue to lose ground. As Americans, as capitalists, as business leaders, we should be deeply worried about that fact. That fact is manifest in every Gallup and Pew poll of the public and of workers and their satisfaction...that vulnerability, insecurity is felt increasingly. The way we are going to deal with that, I think, is to recognize the sense of urgency that is needed here, because this is an urgent crisis in this country. We have for the first time in American history a generation of downwardly mobile white Americans. Workers. The implications for our politics are profound. This is much bigger than talking about workforce development.

Palandjian: It's about our democracy, which you've so beautifully talked about, Darren. Brian, in the same lines of what Darren was starting to talk about, the corporate call to action and the worker experience, tell us about the two extraordinary initiatives at Bank of America, the $25 minimum wage. That's incredibly bold.

Walker: Yes! Yes!

Palandjian: That announcement you made last month. It's awesome.

Walker: It is awesome.

Palandjian: And requiring new vendors, all of them, to have a $15 minimum wage, too, as well as the $1 billion announcement. It's actually $1.25 billion announcement. Brian, tell us more about that.

Moynihan: Darren put his finger on something, which we're meandering between two points. College-educated unemployment, it's been low, stayed low. Those American citizens have somewhat won already against the world. They're competitive. They stay employed in the greatest country in the world with the greatest opportunity ahead of them. When we talk about opportunity the way we think about it, Darren, and the work we're doing, was how do we get these big companies to employ more diversity? Because bringing those people in these big companies, when you start at $40,000 a year plus full benefits, our company moving to $50,000 a year for a high school grad, that's a pretty good place to start. That ties into what you said. That's the challenge. Some of it's opening up the eyes of the employer that these citizens have the skills. We can train the skills to these citizens. You can hire them and they'll be great employees. We said over five years, we'd hire 10,000 people from low- and moderate-income communities to work in our company. We did it in three years. Last year in America, we hired 15,700 people, 51 percent women, 17 percent African Americans, 24 percent Hispanic, 12 percent Asian, very diverse population. Every one of those people came in at our current S40,000 or above, and some of them were above that, obviously, in more senior positions, with a full 401(k) match with health care that costs them far under what the Affordable Care Act ever meant to have, with premiums that haven't gone up in 10 years. By the way, if you joined our company in any year of the last 12, and you joined below $50,000 to $75,000, you've had annual double-digit increases in compensation.

By the way, we have a turnover rate. People who leave our company are not going to X. They're going to better jobs for more pay. I think if we get the big employers to aim their hiring potential to the right place, starting with jobs, to skills, to the programs, which then frankly makes Secretary Raimondo's job easier, is that it's given. If we say we'll take 500 people, she's won. They're already hired. Now the question is, what do we need for skills and how do we get the program to do that? If we do that in diverse populations, to Darren's point, you win there, then you have the broader opportunity question. That leads to a different question, which we focus on a lot in the billion-quarter program, which is about how do you create opportunity, entrepreneurial opportunity? We saw a couple of holes. We saw the holes in venture capital funds geared at Blacks, Hispanics, women, Asian Americans, Native Americans.

We said to our market presidents who exist in all the markets, go out and find us funds. We're now through invested commitments to 90 of them; $250 million is committed to. We're going to $350 million. We thought it'd be two. That's going to create two things. For the managers of funds who are Black, Hispanic, women, et cetera, they're going to have the chance to be more successful. You can see them reference to various places. For the companies they invest in, 3,000 companies just funded so far, they'll be companies that are getting three $500,000 investments who are run by Blacks, Hispanics, women. That's going to create an opportunity set for that entrepreneurial wealth that has been a hole that we've got to do. Who they'll hire? My guess is their diversity will be far better than the average in America.

We saw that hole. That was part of the billion-dollar program. We did the MDI [Minority Depository Institutions], 17 of them, to help them lend to their communities and businesses. Then we went to the community colleges and HBCUs [historically Black colleges and universities]. Those are two different questions. HBCUs, the successful college graduates...the gift was really to help them have better career development. Then we did an entrepreneurial center in Atlanta with Morehouse to basically build an entrepreneurial center, much like the entrepreneurial center called the Nelson Center at Brown that Gina and I are familiar with. We did that between Morehouse and Spelman. On the community colleges, it's much more about jobs development. We did 20-some grants, and you've got to think that's going in two different directions, because people blend them. They're completely two different tasks. If you think about all these initiatives, it's can we get the big companies to open our eyes to talent that will help on a diversity and earned wealth opportunity? Can we get more people put money in funds that are focused on BIPOC entrepreneurs and are run by BIPOC entrepreneurs that will create entrepreneurial wealth? Underneath that, they'll create earned wealth. Then the question is, do we have the people ready to take those jobs? That's the skills building, et cetera. That's how we think about it. It's a tied system. Then we turn to Gina and say, like we did in Rhode Island, Secretary Raimondo, then governor, spend your money to support this specific program because we'll hire the people. You don't have to worry about whether it's going to work. We guarantee you the takeout. If we do that, Hasbro did it, and CVS did it, et cetera, suddenly she's got 5,000, 2,000, 3,000 jobs we can look at. That is far different than saying, "I'm going to teach these skills in STEM and see if I can win against the world for a group of people." That's a harder accomplishment.

Over time, we got to win against the world for people with two-year to four-year degrees. That's the Germany question, the Austria question, and things like that. Right now, we just have to get people moving in the right direction and we attach these big companies, they'll do better. Then we'll figure out how to solve the other problems.

Raimondo: I couldn't agree more. Just to pipe in, when we set out to do the Back to Work Rhode Island Initiative, we said, and I thought I was hitting an aggressive goal, we said we were going to put 5,000 Rhode Islanders back to work over, I think, five months. People who had been put out of work by COVID. I called Brian and others. It has grown, other companies, and they all committed. By the end of the year, we exceeded 7,000. We blew through the 5,000 goal. More than half were women. More than 25 percent were people of color. These were a lot of the people, because they were folks who had lost their job in COVID, they were noncollege-educated service workers, bartenders, waiters, waitresses, et cetera. A lot of them had some college, but not a degree. We were able to be there for them and provide the training and then the immediate on-ramp to a job. So many people—one of the best things about being governor is you get to meet people—said, "You know, I was a waitress and it's not that I wanted that job. It's just what I could get. Now I have a job at Bank of America, Salesforce, Microsoft, whatever." They're going to be great employees...they're on their way. They got on their way. Once they're in the system, then they have a chance.

Walker: I think the thing that's important here is both the secretary and Brian talk about their partnership and it's really very powerful. I think part of the key to unlocking the success of that is having companies and CEOs like Brian who will advocate that in terms of the allocation of the company's capital, that prioritizing, that investing in this way, increasing the minimum wage, paying employees better, will actually rebound to EPS [earnings per share]. Because Brian and his peers are in a tough spot because they are being judged by some by simply a single metric of how much capital do you return only to shareholders as quickly as you can. That actually militates against doing some of the smart things.

One of the things we should all be doing, not only because we like Brian, but because we want as investors, each of us, the secretary invests trillions of dollars, the Ford Foundation, all of us sit in a place where we can speak as investors and say, actually we want investment, as the secretary said, in human capital. We want the company to invest in people. We at least want the company when government policy incentivizes to not instead invest in a robot over investing in a person. How do we actually think about the bringing together, which the book deals with, of all of the three pieces of the puzzle, to invest smartly, to get the best outcomes?

Moynihan: Let me just follow in that. I think what Darren and I have experienced in treasurer Wooden's sessions, and we've experienced in the OneTen sessions with Ken and Jenny, and others by the way, in the CLC [Charity League of Charlotte], which is the Charlotte group, or the MACP [Massachusetts Competitive Partnership], which is the Boston group of the Partners for Ryan, which is the Ryan group we started. The exchange of this idea gives CEOs more courage to jump because there's a natural [way] in... If I'm saying we've got to hire 15,700 people, I turn to Sheri Bronstein, our brilliant HR executive, and say, "Hire them." There's a natural thing to go the path of, I've got to get those people in here. Let's go do it. As opposed to saying, let's work 10 percent harder, 20 percent harder, to take a group of people, and then support it in the right way in the company. I think the ideas, and the courage, and the exchange of ideas is very powerful. Then it becomes all local. It's really what jobs do you have in Atlanta, or Boston, or Austin, or DC? What other people have. Can we get common skill sets? They do it together because frankly, the scale of any one employer can't carry it. The first is just get the top of the house to look at it and say it happens. I will give Darren...he's been very nice to me by saying we're doing all this good stuff. I'm going to tell him it worked for the shareholders, too.

Walker: Exactly.

Moynihan: Because the turnover rate in these so-called, agreed to, these are high-turnover jobs, this is what we're always up against, branch employees, or call center employees, or production. The turnover rates dropped by two-thirds.

Walker: Right, but that's the story that needs to be told. Of course, it works for the shareholders. We know it works for the shareholders. A lot of the gatekeepers and analysts who cover your stock aren't always prepared to accept that. When you say as a CEO, "Trust me, if we allocate capital this way, it will read down to earnings per share. You may not be able to model that perfectly, but I can tell you and you hold me accountable for that." That takes courage in this environment.

Moynihan: Going back to the IBC metrics, the human capital report we put out, the IBC being the International Business Council, that's what we're trying to get people to see. If you look at the metrics of companies on a simple, straightforward, we're not 8,000 metrics you can do. You can judge companies and then you can bring the capital support, the companies that are not all perfect. They're above a bar. Things are going to bump in the night. If you get above a bar, then investors like Darren and this foundation and then the big investors will come after that, that then adds to the equation. I think it does work and you see, but a lot of it is just knowledge that you can actually make this happen and adding together incremental scale, build scale.

In other words, call center people in Charlotte working for us, or Wells, or Duke, and others that we put this program. Yes, we're different once you get in it, but the actual basic skills aren't different. You can go to, in that case, the community college and create a program just designed that we gave them the curriculum. You teach it, we'll give them to you, and we'll hire all the graduates. That's a pretty compelling offer to someone. It took us all saying, "Here's some." Visiting nurses across the hospital, not visiting, starting nurses across the hospital platforms, aggregate it, get it, and then aim it to the Title I schools and stuff. You'll get that diversity content on top of it. What you will get is an economic diversity, no matter what. You'll get people who otherwise wouldn't get that opportunity coming in. By the way, it will have racial and other makeup diverse.

Palandjian: It's extraordinary. Like you said, Brian, you're really seeing change at the top of the house, not just in corporate America, but also in Washington and throughout. We spent a lot of time talking about kind of the macro picture, the structure of the economy. I'd love to go to the other end and talk about the micro. Maybe this is a question for you, Darren, because you've really focused not just on the future of work, as you said, but the future of the worker. One of the chapters in the book is focused on the perspective of the worker and in particular, how important wraparound supports are actually to getting people jobs and finishing their educational journey, things like emergency funding to cover childcare, transportation, rent. Like life, right? How do you think about that and how do you think about the future of workers in that context?

Walker: I think the thing, again, it's a micro issue, but it can only be addressed at scale through macro-focused policy. We're the only industrialized nation that does not provide every worker with a set of support services to ensure that they work and that they are paid well. I think it is no surprise that we are being outperformed by some of these economies because they have the kinds of support, whether it be paid sick days, or whether it be support for time off to care for parents, longer periods of maternity, paternity, parental leave, if necessary. Of course, the fundamental issue of childcare, which we know is a barrier and is having an impact, on the slower take-up into the workforce post-COVID for women, because childcare is a major barrier, if we can't address it, for getting women back on the job.

Palandjian: Gina, you've spoken a lot about the care economy. You want to chime in?

Raimondo: Yes. My answer to your question is it's absolutely, totally vital. Again, we do have to be honest about this. This economy, Darren said, this economy is working for some and not for others. If you are a college-educated person, have never spent time in prison, never had a drug problem, have a great care infrastructure around you, you're going to get a job. Chances are, multiple job offers. Chances are a good paying job and then have an opportunity to get another one. But if you don't have a perfect record, you're living in recovery, you don't have an opportunity to have good childcare, you are already living in poverty, and are low or just about poverty, and don't have reliable transportation, or reliable housing, it's going to be very hard to get a decent job. Which means if we want these job training, apprenticeship, community college efforts to be successful, they're only successful to the extent that people can graduate from them and get the job. They will only be able to do that if you meet them where they are and provide transportation, childcare. Be receptive to accepting folks that might have been formerly incarcerated. Be receptive to accepting folks that might be in recovery and give them the support they need to get through the job training and get that job.

We did this in Rhode Island, and it was...I love what you said Brian, about sharing ideas gives people courage, because initially when I started to say, "We ought to pay for transportation, we ought to pay for some amount of childcare out of our labor and training money," that was a little controversial. But, not surprisingly, when you do that, it increases, this is my point, it's not compliance, it's outcomes. People have to graduate to get the job. So one of the simplest things we did that made a huge difference was we located our job training effort at a bus stop or right near the bus stop, so it was very easy for people to take the bus reliably and go to the job training, and we gave them a bus pass. So anyway, I think this is essential, it's not a nice to have. If the purpose of these initiatives is to help folks who don't have the college degree and everything in place in their life to get a job, then these have to have robust support around them.

Palandjian: Well said.

Moynihan: Let's just try to follow it up quickly. When the group that was put in place by the mayors and governors and did the opportunity assessment in Charlotte they went right after this, which it took your childcare and training, and all this aligned in the location, and stuff, and the transportation. It's absolutely critical to think about it as a holistic thing. In the OneTen initiative, Ginni Rometty talks about the need to care for the people when they come into your company who don't have the college education, college degree brand, because the people are going to start spitting them out because they're going to be different. And how do you do that? So, it has to be very micro, as you're saying. I'll give you an example on the Road to Hire program. There's a fellow named Ric Elias. He's terrific. He runs a company called Red Ventures. Ric got this program started all on his own nickel and then brought in this group of CEOs and we've been expanding that program from 50, to 100, to 150, to 500 kids. But his insistence was, they didn't need the period in high school or whatever the last period was because of Gina's point about the transportation. When you required those kids to leave that school and get on a bus, your yield of people just went down. If he did it...and he was able to convince the principals because they're cooperative and now we're scaling that program up, to Darren's point. But it came down to a simple determinant of alpha success was don't let them leave until they get through the program for the day. And then they can go about their daily life and stuff like that. That comes back to your micro point. This is a bunch of micro, best ideas, [Treasurer]Wooden's initiative, the OneTen initiative, BCG [Boston Consulting Group] has done a lot of work here. There's all these people. I get more packages from people about it. But the question is none of them work unless you sit there and say, "OK, in Rhode Island, it took this bus stop and this building behind it to do this thing, to make sure that people could attend and give them a bus pass or take care of their kids," because that's what they need. They need the training, but the training is easier to understand. What people don't understand is that if their kids aren't taken care of, they're not going to attend. And we take that approach.

The last point I'd make is there's a lot of talk about equity in workforce practices and even college practice and all the stuff we're talking about. I'd encourage all employers to go back and look at their benefits through the eye of things like childcare cost as a percentage of income, health care as a percentage of income, make sure that you're stratifying your costs over benefiting the lower part of your pay scale. Because, as you look at this, we got our eyes opened on medical [benefits] a number of years ago when everybody was paying the same, which sounded fair. But then everyone said, "This doesn't make sense." And we dropped it in half and have it raised for people. On childcare, we took the same look. During the pandemic we said $100, hire someone in your home, whoever you are. You could make a million dollars a year. We give you a hundred dollars to hire people to take care of your kids. We were in triage mode. As we came through it, we recognized that we went to think it's $275 per kid per month.

You start to think about that net of the actual cost. And you think about that as a percentage of the income, you have to test the metrics that way, which is different than what we've traditionally done, which is everybody gets the same benefit. And, I'd encourage everybody to go back and look at all their benefits to say, "Is this?" It's not necessarily racial or ethnic. It's actually social economic strata. And, are you thinking about this and after-tax dollars that people are spending for these things, and if you'd made it a little bit easier on them, that would change, of course, the history of their employment.

Palandjian: Totally. You've got to have all the micro tactics. I am told that we have a few minutes left, and before I ask my last question I do want to turn to one audience question, which I think is very interesting. It goes, "Why are these kinds of partnerships only emerging now? What took so long and what's different now?" Anyone?

Moynihan: Yeah, I think it comes down to the capitalistic system is the only system that's going to have the money and bring the talent and energy to make it work. And the 50 years of stakeholder capitalism and the great debate, you've seen it shift to where it is becoming mainstream from the investors, from the customers, from the employees. Everybody expects companies to both deliver for their shareholders and for society. That's what you're seeing as stuff comes out, is people have been working on this stuff and then they said, "This is hard. We need to partner, and we need to do more." That's why you're seeing the partnership. And then frankly, the events of last year this time with George Floyd, just accelerated it all in a way where people said, "We have to do something in our house and together with the nearby houses to make this work better." I think it comes from many years of people understanding how to aim the capitalism gun in the right way, because it's the only system that's going to work. Despite what we think about some of these other economies, they're going up 1 percent, at the best of times, they're going up 1 or 2 percent. They weren't working that well in our overall perspective. What we got to do is aim the capitalism gun so it's fair across dimensions, as Darren talked about, not change the system. And I think CEOs are saying, "If we don't re-aim it, it's going to get changed in a way it won't be constructive."

Palandjian: I am going to go to my last question, but yes, Brian, I couldn't agree with you more. It is the change in mindset and as the saying goes, "The right time to plant a tree was 10 years ago, but the second best time is to do it now." The last question for everyone, it's been just such a great conversation. So briefly, we'd love to hear from all of you. There is so much to worry about when it comes to the world of work. For your closing thoughts, what makes you hopeful about the future of work and the future of workers? Darren, why don't I have you go first? Then the secretary and Brian.

Walker: What makes me hopeful is when I think about, specifically to me and my family, to the workers who have been Black and poor for most of the history of this country, African Americans have provided the backbone of the American economy. And for most of America's history that was done without compensation. I think if you look at the continued belief in this country, and this is what gives me hope generally about this country, as I think about the experience of African Americans. We have believed in this country. Fannie Lou Hamer, James Baldwin, Martin Luther King, John Lewis, Frederick Douglass. They believed in this country, even knowing that in their lifetimes, they would not see justice. They would not live in a fair country. Frederick Douglass knew this. Fannie Lou Hamer, she was being beaten in Mississippi, knew that, but she still believed in America and was hopeful. Why today could any of us, and particularly African Americans like myself, be anything but hopeful? It would be a dishonor to their memory and to all they worked for for us to get to this point, to give up, to become cynical. I am hopeful and I'm hopeful in part because of people like Brian, Secretary Raimondo, and of course you, Tracy. The fact that the trains are moving and we just have to move at an accelerated pace. It's urgent. The time is now.

Palandjian: Gina.

Raimondo: I'm hopeful because we know this works. Sometimes you have a problem and you don't know how to solve it. This is more about scale. We know this works. We've all been talking about it. Darren has had experiences, Brian, I've done this in Rhode Island. Lots of small initiatives all around the country. We know how to do this, and it works for small companies as well as big companies, and it works in urban areas, in rural areas, in the whole thing. So, I'm hopeful because we have the solution. We just have to have the will and determination to make it happen. And to your point, I'm glad you asked about the micro, because this really isn't magic or rocket science. This is yeoman's work. The details matter, but we do know how to do it. If we commit ourselves to doing it, and that is why I like to set particular goals, we're going to put X number of people to work in a certain period of time, we'll get it done. As has been said, thankfully, I'm hopeful because there is a growing awareness that the inequity and racism that exist in America, it's time to take action. There's a growing awareness to how much women bore the brunt of the economic dislocation in COVID. People's eyes are open. We know what the solution is, and we just have to get to the business of getting it done and hold each other accountable.

Palandjian: You have the final word, Brian, before I pass it on to our final speaker.

Moynihan: Hard to follow those two eloquent...not as a hope, I'd say just to follow on, I'd agree with everything they said. But I think you have to be hopeful, because I think what you're seeing in all these conference rooms in these activities is a group of people who are working with these large organizations, both philanthropic, business, and government who are saying, "We just can't let this go on." About the racial equity, they're just saying, "We have to figure this out. We can't have people as successful as Darren still feel what he feels about America, knowing that he's an optimist in Boston." We know that, we've got to fix that.

But on the other hand, there's also recognition we have to win against the world, and we have to show America's capabilities, because in that process, we actually bring the world toward a better place. I think it's a universal understanding of the two parts of the equation we're talking about here. One is around racial, social justice, and equity, and that other is about skills and jobs. They do run into each other. They do have a lot in common, but the idea is we've got to win both. I've been doing business now 30-plus years, I've never seen people sit down and you don't have to explain why anymore it's, "Okay, what are we going to do?" It's, "What are we going to do? How are we going to do it?", not why to do it. That's just different. That means that energy, billions of dollars of spending, our vendor management practices, and other people do it. You just see that grind forward. That gives me hope because that means you're going to do it, because it's part of the core business model, not, "Here's some charity. Let's try to do that and this." So, I think it's the CEOs and the major organizations are committed. So, now you've got colleagues, you have got to keep us honest and push us.

Palandjian: Let's do it. Thank you so, so much, Darren, Gina, and Brian for such a rich conversation. And to use a line from Darren, he often says, "Hope is the oxygen of democracy." And in many ways, economic mobility underpins that hope. The hope that our hard work can pay off, the hope that the next generation can have a better life. So, it's been such, such an honor to have the three of you join us. With that, it is my distinct pleasure to turn it over to Pat Harker, president of the Philadelphia Fed and our wonderful partner throughout this work. On to you, Pat.

Pat Harker: Tracy, thank you so much. And thanks everyone. Wow. What an incredible panel. I feel like I should just say, "Amen!" This was an incredible message that was sent out and I appreciate everything that the people did to be here and what they provided us all. And it's a tough act, or really acts to follow, but I'll try. I'll try to keep it short, too, because I know we're at the end. Again, I'm here to close things out. First, there's a bit of housekeeping that I have to do as a standard Fed disclaimer; it's what we do at the Fed. The views I express today, and I'll keep them short, are my own and do not necessarily reflect those of anyone else on the Federal Open Market Committee or in the Federal Reserve System.

Today's event, the book we're releasing, and so much of the work we do every day at the Federal Reserve is really motivated by the same central insight. Declining economic mobility is one of the defining challenges of our time. Indeed, not only is it an economic challenge that needs to be solved, it's also, in my view, a direct challenge to our nation's highest ideals. One of the animating creeds of our country after all is that no person should be held back by the circumstances of their birth. But as we all know, far too many people's paths to success have been blocked. Intergenerational mobility has fallen in recent decades. Income inequality has remained stubbornly high. That can clearly breed frustration. At times, even complacency. It's natural for people to feel hopeless in the face of monumental problems. They can feel insurmountable, and that's why today's program has been so inspiring to me and I hope to you as well.

What this program's presentations and the stories we have read about in the book demonstrate so vividly is that these problems can be solved, as we were just talking about. The case studies we highlight here are special. They are not aberrations. The ideas and tools they develop are practical, and in many cases replicable. I'm an engineer by trade and a pragmatist by education and disposition. What I think is really great about these programs is that they are focused on what works. Part of recognizing what works is being clear-eyed about what doesn't. As we were talking about through the panel, the train-and-pray model, where people are trained for skills without a guaranteed job at the other end, has not historically been particularly effective. Neither are training or educational opportunities that are unaffordable and thus unattainable to the very people who need them most.

That's crucial, because we know that to have a decent shot at earning a family-sustaining wage, people need some form of post-high school training or education. Experimentation and bold innovation are key to determining what works and central to what we do at the Philadelphia Fed's Economic Growth and Mobility Project. We believe in exploring how our research can be applied to real community problems. That's why a couple of years ago we partnered with stakeholders in Philadelphia to advance a one-of-a-kind pay-for-success, job training model that links Comcast, clearly a major employer here, with Philadelphia Works, our local publicly funded job training board. Now, while the program is still in its early stages, the lesson from the model can be applied to partnerships between employers and training organizations, really, I think across the country. The way it works is that the workforce board, Philadelphia Works, pays for training for new hires right up front. The employer then reimburses the board if certain benchmarks such as staying on the job successfully for six months are met.

Now, this is really good for both parties. It's a win-win. Workers get the skills the employers need, and the workforce organizations know they are training for real job opportunities, real opportunities. You can read more about this exciting, important model in the book, of course. The exciting truth is that there are innovative and important programs taking shape all over the country. The book describes many of them, like career impact bond programs that enable workers to upscale affordably, as well as groundbreaking higher-ed initiatives in Texas and Virginia that link payment for programs to student employment and income after graduation. What these programs have in common is they also represent a mindset shift away from old models and toward planning around, as we're talking about outcomes, outcomes, outcomes, outcomes. Building flexibility into contracts, sharing risk, and paying proportionate to impact.

Now, we certainly know that a book won't do all those things on its own. It can't. This book is instead a jumping-off point, a way to highlight an emerging set of principles that define a more nimble training ecosystem that works better for all workers and that truly charts a way to an equitable workforce recovery. As the speakers just said, the task is truly urgent. Despite the improving economy, we still have 8 million fewer jobs than we did prior to the pandemic. Actually, closer to 11 million, if you assume we would have been creating around 200,000 jobs a month without the pandemic, that was our history. Many millions more stuck in jobs with only limited opportunities. Now is the moment for bold action. In the coming months, we will be convening and supporting you, local communities, through a spotlight series to bring ideas from the book to their situations.

If one of the case studies in the book speaks to you, and if you think you could assemble a local team to help adapt to that idea and test it, we want to help. Now, the plan is still evolving, but the team behind Workforce Realigned, along with our partners, will support your team with technical assistance, relevant, nationwide expertise, and connections with others pursuing similar initiatives. If you want to learn more, please check out our web page. We really want to hear from you. So really, again, thank you for joining us today and now, let's go out and let's make this happen. Thank you.