Remarks by Rockefeller Foundation President Dr. Rajiv Shah on U.S. Jobs and Economic Opportunity at the Detroit Homecoming IV
September 15, 2017
As delivered in Detroit, Michigan on Friday, September 15, 2017
Good morning, everybody. I’m super excited to be here in what I understand is an old sock factory converted into this super cool meeting space, right next to a racing facility where you see the race car on the roof there. That feels like the kind of thing that only happens in Detroit. So it’s really exciting to be here.
I want to thank Representative Dingell here, who’s been a friend for a long time – thank you for being here. And I do want to say that the Rockefeller Foundation has had this great history working in cities around America. We’ve had a more modest presence up until now in Detroit, but we’ve been a proud partner of the Civic Commons project, and I know the mayor spoke about that in some detail during his presentation to this group. So I’m excited that we have the opportunity to build on an already serious existing commitment to Detroit with the Rockefeller Foundation.
Now, like most of you, at least – how many of you here are what they’re calling here, “ex-pats?” I don’t know about that term, but – oh cool – well, welcome back. I see many friends in the audience that fit that bill. And perhaps, like me, you’ve been taking a few walks down memory lane. It’s kind of Nationals’ baseball season in the town that I live in right now, and so the “Roar of ’84” and the 35-and-5 Tigers are something I’ve been thinking about. The Pistons’ back-to-back championships around that time. The huge turnout for Pope John Paul II. Probably my first exposure of global leaders and global leadership outside of America was when Nelson Mandela visited Detroit. I don’t know how many of you remember that, but he came to a Ford factory where he spoke to assembly line workers there, and he went to the Tigers’ stadium, and spoke about some of the common values that we all hold dear.
So with all of that in the back of my mind, it’s exciting to be here. But I do have to say that one of my favorite memories of Detroit is more recent. I was serving in the Obama administration at the U.S. Agency for International Development, and we had the task of taking on global poverty and suffering in some very tough places. During my tenure our very largest program was in Afghanistan and, frankly, for less than 2 percent of the cost of the war, we got 3 million girls in school, we had the fastest reduction in under-five child mortality child death anywhere in the world, trained 17,000 civil servants including 8,000 women, and worked with the government to create some opportunity for our troops to come home and that country to maintain some degree of stability without putting American lives on the line every day. And as a result I had to spend quite a lot of time in Afghanistan. We had almost 600 American staff working all across that country.
I think it was February 2011, I had to go out there and I had to actually miss the Super Bowl that year and I was on a flight during the Super Bowl. I landed, and was driven, you know you get those incredible military escorts from Kabul airport to the ambassador’s residence where they have a guest room and I was able to stay. I got on wi-fi and downloaded my emails, and half of my emails were about this commercial, that I just had to download and watch for all my friends from Detroit. So I clicked on the link and it was, in fact, a Chrysler 200 ad from 2011 – which I hope many of you all remember – but I was jetlagged and exhausted and I watched that ad probably 12 times with those great images of Detroit. Hearing Eminem say, “This is the Motor City,” and “this is what we do,” gave me strength and enthusiasm and encouragement. So you know, it’s fun to sit in Kabul, exhausted, getting fired up by Detroit.
And I feel the same spirit of enthusiasm and resilience in this conference and this community. I know you guys are four years into this. And I think there’s a magnetism that expats feel for Detroit, and it’s probably because Detroit represents so much of what we’re dealing with as a country.
Detroit gave America the automobile – the trucks that help farmers be productive, the station wagons that carry families to national parks, including my own. In some ways the institution I now lead, the Rockefeller Foundation, exists because of the extraordinary demand for gasoline and oil that was created by the modern auto age more than a hundred years ago.
Detroit also gave America security, during World War II through the famous “Arsenal of Democracy,” as mostly women stamped, riveted, and welded the thousands of bombers and tanks needed for victory.
Detroit gave America a northern home for the civil rights movement. And I don’t have to say anything to this group about Rosa Parks, and Martin Luther King, Jr. rehearsing his “I Have a Dream” speech right here in the city of Detroit.
And I know last night you got a little bit of this and I assume you’ll get more later, but Detroit obviously gave America the soundtrack we have – but I’ll leave it at that.
What’s more, is Detroit gave America the notion of what makes a good job and good life, and the American Dream in this country. And as I have started at the Rockefeller Foundation, we have made it a determination to focus on cities and communities that have an opportunity to grow and rekindle the spirit of the American Dream in our economy. And that’s really what brings me here today.
In Detroit, we created the concept that if you work hard and play by the rules, you’ll have an opportunity to have a middle-class life, characterized by mobility and opportunity. Generation after generation, that’s what drew so many people from all over the world here to begin with. They saw Detroit as a place where they’d have stability, and their children would have a chance to get ahead. That’s true for my own family. I was born in Michigan, in Ann Arbor, thanks to the promise of a good job for my father – first at Bendix Aerospace in Ann Arbor, and then at Ford Motor Company, where he worked for over three decades.
In those days Detroit did in fact embody the American Dream. The Big Three sold 9-out-of-10 cars nationwide. Hardworking families – including immigrant families like my own – could expect a multigenerational career with one employer, and good public schools, which I went to, for their kids. It wasn’t perfect – and I know even later today we’ll talk more about the 1967 uprising, and the deep-seeded structural racism that still exists today. But it did afford the chance at upward mobility and opportunity.
I’ve thought about this a lot since I joined the Rockefeller Foundation. We’re living at a time of great economic insecurity and inequality. Some call it America’s second Gilded Age, as we’ve seen since the 2008 recession, the great majority of income gains just go to the top 1 percent. For many, work is in fact losing its value as a source of pride, identity, and basic human dignity – the absence of work is now proven to be closely correlated with increase in challenges around mental health, anxiety and despair, thanks to research done right here by University of Michigan researchers.
Through our foundation’s 104-year legacy, we’ve had some incredible wins through and around the world. We’ve helped invest in science, in public health, in medicine that led to the creation of the Yellow Fever vaccine that saved millions of children from disease and unnecessary suffering. We actually brought modern agricultural research to Latin America, Southeast Asia, and parts of Africa, and over the course of decades, helped nearly a billion people avoid starvation and move into a modern and productive economy. Today, as we look forward, we see one of the fundamental challenges we’re facing around the world as rekindling, understanding, and recreating better opportunities for a genuine American Dream – right here at home in Detroit but all over the United States of America.
And to us, there are three basic pillars we’re trying to think about to invest in that lie at the heart of the American Dream – each with strong roots here in southeast Michigan.
The first pillar is jobs that afford people a real middle-class wage. More than a minimum wage or a living wage, a wage that enables workers to share in the profits they create; that allows them to be active consumers; that lets them save for a comfortable, secure retirement; and leads to greater upward socioeconomic mobility for more people.
Henry Ford invented that concept a century ago when he doubled worker’s wages and created the now famous $5 wage. His motivation here was of course, turnover, and more stability in the workforce. But another result was that workers could suddenly afford the same Model T’s they were building. And that balance of consumer opportunity became key to Ford Motor Company’s incredible success.
Many employers, including Ford sometimes, and Standard Oil Corporation for that matter, didn’t always apply labor-first lessons in their day-to-day work, but the modern labor movement grew out of [events like] the 1937 Battle of the Overpass at River Rouge, and did in fact lead to basic labor standards, both for those who were formally part of labor unions and for the rest of our country, as those labor standards and protections proliferated through public policy.
That we see as the second pillar of opportunity underpinning the American Dream: policies that ensure that if you work, you have the opportunity to be compensated fairly and benefits that allow you to have healthcare and retirement taken care of, so that you can have a more productive future. Today, the Rockefeller Foundation is making policy investments to help usher in those types of benefits and policies.
The third pillar emerged out of the policies and programs that comprise America’s public social safety net – all intended to make sure no one who works hard has to suffer just because they lose their job, get sick, have a disability. This too has deep roots right here in Detroit – a Wolverine named Wilbur Cohen was actually instrumental in developing many of the New Deal and Great Society-era programs that millions of Americans count on today, from Social Security to Medicare to Medicaid.
Because of these pillars of opportunity, today we think of a good job as one that can lead to a middle-class lifestyle, and are generally optimistic about the opportunity children in those families might have for a brighter future.
In my years at USAID, working with countries around the world, and one of the world’s great experts on this is of course right here, Dr. Jeff Sachs, I observed that economic growth can take place with very uneven benefits to its population. Some countries used a growing GDP to lift millions out of poverty and into the middle class. Others concentrated the wealth and power that was represented by that income in the hands of just very few, leading to corruption, inequality, and in many cases – despite rapid growth – very, very modest, if any, gains in the kind of core indicators of human welfare and opportunity. One lesson we take away from that – and it bears repeating in Washington today – is that not all economic growth is equal, and that if we really want people to have opportunities, we have to have more active leadership and partnership from government, the private sector, philanthropies, and civil society, like we’re seeing here in Detroit. While Detroit has such leadership today, it hasn’t always in the last 50 years. And as you know, it’s become the experience of our country.
Perhaps the most powerful statistic I’ve seen since joining the Rockefeller Foundation, was the work of the economist Raj Chetty, out of Stanford, that shows if you were born in 1960 or 1970, you were almost certain, frankly – unless your last name was Ford or Rockefeller – you were almost certain to do better than your parents economically. That has started to change, and 1980 is the first year where the people born in 1980 and beyond now have less than a 50 percent chance of doing better than their parents across the entire income space in the United States.
That’s a huge shift in the nature and opportunity of our country, that I think has led to the nature of our politics in our country getting more coarse and more difficult. And if we’re going to do something about our politics and our society, how we interact with each other and how we expand opportunity, we have to deal with that fundamental constraining of economic opportunity across the country. And in my view, Detroit is very much leading the way in showing our country how to do better.
[But] it used to be that if you spent your day creating value for America’s top companies, they paid you for it. Today, if you spend your day online creating terabytes of data that marketing companies sell for profit, it may be unlikely – you may get free services – but it might be unlikely that you ever see a cut of that. These modern technology-oriented companies also have much smaller workforces. Think of this: in 1979, General Motors’ $50-billion-dollar market cap, that rested on the work of 850,000 Americans. Today, Facebook’s market cap, adjusted for inflation, is nearly 10 times the size, but with only 17,000 employees – more than 90 percent less than GM. Faced with fewer big-company job prospects, more and more Americans are choosing to be self-employed, whether as an Uber driver, a housecleaner, contractor, or freelancer. And that creates all kinds of challenges as folks try to build productive careers, especially young people, who often spend a lot of their early career in those types of roles.
Our safety net is under attack, and I’m not going to get into that in great detail, but today, nearly 60 percent of Americans can’t cover an unplanned or emergency expense like needing new brakes on their car or taking a family member to the emergency room or a medical service center.
If nothing changes, it will only get worse for more people. [That’s why] employers need to show more responsibility, as so many here in Detroit are doing. Unions need to add to, and rethink their roles, in an economy of the future, as I hope many are considering right now, including trying to help members recognize – sooner, not later – that work itself is changing, which may require new and sometimes very different skills. Meanwhile workers themselves – and perhaps some politicians – need to recognize that some jobs just aren’t coming back, and need to be more open-minded about how their talents can be applied to the good jobs that actually exist.
For philanthropy’s role, we know we can’t be the engines of job creation in America or Detroit. Nor is it our place to swoop in and claim we have all the answers. But I think Detroit has shown that philanthropy can play a tremendous role in helping governments, and government and businesses, be successful. I’m extraordinarily proud of the partnerships between so many philanthropies led by Ford, J.P. Morgan – not a philanthropy – and others, as a grand bargain to put the city back on its feet.
At the Rockefeller Foundation we’re eager to learn from those examples and apply that kind of new thinking as we go forward. In fact, economic opportunity has long been one of our animating principles. In the early 1900s we fought to eradicate hookworm in the South after learning it was the single greatest obstacle to people holding down work. During the Great Depression, we seed-funded the American Public Welfare Association, a critical organization that helped get Social Security passed into law. More recently we’ve helped large-scale employers from Walmart, to many other retailers create what’s known as impact hiring – the idea that companies can address their entry-level talent needs while also improving job outcomes for specific communities that may face greater barriers to being employed by those companies. Over the last two years our work in the impact hiring space has helped five of the 10 largest employers in America, which together represent a workforce of more than 5 million people. [And it’s helped with hiring] more than 100,000 jobs for otherwise disaffected communities and cities all around our country.
For 104 years our foundation’s mission has been to promote the well-being of humanity throughout the world. That’s why as we begin to try to tackle these problems, we will always be mindful of what work does for a person’s well-being.
Because for a lot of people, their job is more than a paycheck. I’ve seen this in my dad and I’ve seen this in my family. That job is about feeling pride and self-worth. It’s what makes someone feel independent and important and that they’re contributing in a productive way to their community, their family, and their children. It says to everyone we meet that we have something to offer and something to contribute to society, and that no matter what our faults, flaws, or failings might be, there is somewhere we belong, where we have a role and our contribution is valued. It tells us that our lives have meaning beyond our own.
That’s what a job has meant to generations of Detroiters, and generations of Americans. It’s what my dad’s job meant to him, and to our family, for more than three decades here in Detroit. We’re confident that we, the Rockefeller Foundation, can work with partners here in Detroit through this great conference and through many other vehicles, to expand access to those kinds of jobs, right here in southeast Michigan, and to create a bright, shining example for the rest of the country as we try to deal with some of the fundamental challenges that are taking place in our nation.
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