Once a symbol of urban blight, Detroit is on the road to recovery — but a persistent racial wealth gap has left many of the city’s black residents behind. JPMorgan Chase, which has invested hundreds of millions in the recovery, pledged on Wednesday an additional $50 million in investment to address racial disparities, upping its total commitment in Detroit to $200 million by 2022.
“Business has to be involved in trying to fix some of our serious problems,” JPMorgan Chase CEO Jamie Dimon told Yahoo Finance Editor-in-Chief Andy Serwer in a conversation that airs on Yahoo Finance in an episode of “Influencers with Andy Serwer,” a weekly interview series with leaders in business, politics, and entertainment.
“This new effort is because there's still a class of citizens being left behind. And it's often minority. And they're, in this case, black Americans,” Dimon said. “So this $50 million is a special effort to help black entrepreneurs, do education, small business, and housing.”
The pledge calls for $20 million made in sustainable loans to community development organizations that help low-income Detroit residents find and keep affordable housing. As part of the effort, JPMorgan Chase will implement a lease-purchase pilot program to help 54 Detroit families take title of their homes within the next three years.
Another $12 million will aim to support black small-business owners in the city, many of whom struggle to gain access to the same level of capital as their white counterparts. The fund will help black entrepreneurs get that capital as well as technical assistance and commercial real estate, the company said.
The remaining funds will go to job training and financial health initiatives, including a lift of the wage floor for entry-level Chase employees in Detroit to $16.50 per hour.
‘Detroit is a good bet’
Since 2014, JPMorgan Chase has invested $155 million in Detroit's economic recovery. Due to support from JPMorgan Chase and other benefactors, as well as the efforts of Detroit Mayor Mike Duggan, the unemployment rate is down from 20% in 2013 to less than 9% in 2018, according to the Bureau of Labor and Statistics.
“Detroit was an example of the plight of one city,” Dimon said. “Its population went from 2 million to 700,000. Civic society, business — people jumped in to try to help.”
“JPMorgan Chase stepped up to support Detroit at a critical time in our history,” Duggan said. “There’s more work to do, and I’m glad JPMorgan Chase is expanding their investment in the Motor City. Their investment has proven to others that Detroit is a good bet.”
Dimon contrasted the success of the recovery in Detroit with the gridlock in Washington D.C.
“Unions working with banks, working with civic society, working with mayors, working with governors — that actually works,” he said. “What we see today happening, like, in Washington, that does not work.”
Max Zahn is a reporter for Yahoo Finance.