In his annual letter to shareholders, Jamie Dimon, longtime chairman and CEO of JPMorgan Chase, said there are only two ways to fix the “broken American dream. Neither of them has anything to do with the banking industry.
In his annual shareholder letter released Tuesday, Dimon wrote that the United States is rife with policy mistakes that need to be corrected. The pandemic has dramatically increased income inequality, leaving millions without a safety net and ultimately killing the American dream for some. But Dimon argues that a shift to skills-based hiring and paying more minimum wage workers could solve these problems.
Providing new workforce entrants with practical skills that lead to better-paying jobs, he writes, noting that some industries – advanced manufacturing, networking, data science and technology, and health care – could be ideal starting points. That would be good for economic growth, he wrote, “but it would also make us miserable.”
Dimon has long supported skills-based hiring, and in 2019, JPMorgan invested $350 million in a program called New Skills for Work, which aims to help people in underserved populations develop critical, much-needed skills.
“The new world of work is about skills, not necessarily degrees,” Dimon said at the time, explaining that there is a skills gap between those stuck in low-skill jobs and businesses that can’t find the skilled workers they need. “We must remove the stigma of community college and vocational education and find opportunities to upskill or reskill workers so that those who are left behind have the opportunity to compete for higher-paying careers today and tomorrow.”
Four years later, his new shareholder letter echoed that earlier sentiment.
In a country with 10.8 million job openings and 5.9 million unemployed workers, Damon wrote, schools should partner with local businesses on skills-training programs to prepare graduates for specific jobs. Generation Z, the fastest-growing group of workers, echoes this sentiment, saying the U.S. is failing to provide them with the digital skills they need to enter the workforce.
It is critical that companies – especially Fortune 500 companies like JPMorgan Chase – engage in this process, and that the programs they design be offered in the various local communities where the actual jobs are located. Many companies – including LinkedIn, IBM and General Motors – are placing a renewed emphasis on skills-based hiring. They are meeting the demand.
Dimon: Pay people
Then there’s a second solution: raise the wages of low-wage workers. Unskilled workers are barely making ends meet on what’s called a living wage. “It’s hard to make ends meet on $15 an hour, especially for families – even with two family members working,” he says. “Work and a living wage bring dignity, more opportunities – in housing, education, child care, health and overall well-being – and also help rebuild communities because those earnings are used to improve people’s lives. ”
It doesn’t help that inflation makes frugal living nearly impossible. More than eight in 10 middle-class workers report needing to tap into their savings to get by.
In response, Dimon says the earned income tax credit should be reformed and expanded to supplement the EITC (EITC) for low- and middle-income workers. Many people who qualify for the credit don’t even know about it and therefore don’t receive it: “Proper reform …… could increase entitlement benefits and reduce fraud and improper payments.”
He added that the EITC money would undoubtedly lift up low-income communities because the money is used exclusively to lift up families: “I also have no doubt that it would increase GDP – because most of that money would actually be spent on”
2022, Damon said he favors raising the minimum wage and encouraging job seekers with minimal education or criminal records to get a second chance.
“Give people a chance and you’ll get dedicated people who want to do those jobs,” he said at the time, adding that some regulations make it unfairly difficult to hire workers. “It’s shocking what you have to go through to hire somebody.”
