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Robin Hood CEO Wes Moore on wealth gap and racial injustice

Robin Hood CEO Wes Moore talks with Yahoo Senior Writer Zack Guzman on a wide range of topics from philantrophy to racial injsutice and the wealth gap for minorities.

Video Transcript

- Wes Moore is the CEO of the Robin Hood Foundation, which is one of the largest anti-poverty organizations in the US. For over 30 years, Robin Hood has lifted families out of poverty in New York City. Moore is the author of the acclaimed best-selling book, "The Other Westmore." He's an entrepreneur and a decorated US army combat veteran.

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ZACK GUZMAN: All right, Wes Moore, the CEO of Robin Hood, thanks so much for joining me.

WES MOORE: My pleasure. Great to see you, Zack.

ZACK GUZMAN: Out of everybody we're speaking with today, I feel like you have the most impressive resume by far. I don't have the time-- we don't have the time to go through it, because if I read it, we'd be out of time. But I want to start with your current role of [INAUDIBLE] Robin Hood at one of America's largest charitable institutions, giving more than $150 million out the door to those in need.

And we know philanthropy is so great in these times. So first off, I just want to get your take on what the dependency on philanthropy here in 2020 is looking like historically, as everyone grapples with the pandemic.

WES MOORE: Well, I think one of the things I'm really proud about the work of Robin Hood and the work we've been able to really get done within Robin Hood is the fact that we really don't even view the work of Robin Hood, our philanthropy, at all, really, as a charity. But that we really see ourselves as a change organization.

And we see ourselves as a change organization because we think that the reason that these organizations even have to be in existence is because there are frailties within the system that need patching, that they need fixing. And actually, if we're looking at what's happened this year, I think COVID-19 has just been a primary example to that.

Because when people talk about the impacts of COVID-19 and the damage that COVID-19 has done, both on health and economics, it's actually really important for people to look to ask the question of what was going on before COVID-19, though? It's not like things were great, you know, when you consider the fact that 23% of people who have lost their jobs due to COVID-19 were actually living in poverty prior to COVID-19.

So this is the working poor, people who are working jobs, in many cases, multiple jobs, and still living below the poverty line. Over 40% of people prior to COVID-19 could not afford a $400 shock with cash. And we have now seen that shock, and it's very much in living color.

And so I feel like the role for all of us in this moment is to actually not just to focus on how do we respond in this moment, but also how do we make sure that the frailties and the gaps that existed well before this time, that this is not just about how can philanthropy help to fill in spaces or deal with emergency needs, but how does philanthropy actually focus on changing the structures of society to make sure that all people feel that level of support and that level of opportunity.

ZACK GUZMAN: Yeah, and I mean, you raise a good point. I mean, it's not like these inequalities or this level of wealth inequality or economic need wasn't there before this pandemic hit. It just kind of shines a light on the problems now.

But it's something you've talked about before in your work, which focuses mostly in New York City here, about the way that this has been a problem and the way that it's a bigger problem than people might expect. Talk to me about the numbers in terms of how this is a rolling issue for people who are already at or below the poverty line and who can't really break past that.

WES MOORE: Yeah, and I think it's a great question, Zack, because I think it's important for people to understand when we're talking about people who are living in poverty or living under the weight of poverty, it's important for people to understand who we're talking about. Because oftentimes, people think when a person is in poverty, oh, that's a person I-- I pass a person on the street. And that person's in poverty. That person is in poverty, yes.

But here's the reality. And this is just New York City. Half of New York City, before COVID-19, half of New York City was in poverty for at least a year over the past four years. Not half of a borough, not half of a demographic. Half of the city was in poverty for at least a year over the past four years.

So when people say, well, I don't know anybody who lives in poverty, the reality is, is that you are probably passing people and interacting with people who are living in poverty every single day. And you just don't know it. The people who are serving you your coffee in the morning. You're staying in a hotel, the person who's changing your bedsheets. The people who you see doing even city and state functioning jobs that are still below the poverty line. These things are real.

And so I think what's important for people to understand is not just what does the horror of poverty look like for people who are living in poverty, and oftentimes, it's very predictable in generational poverty, this lack of economic mobility, this lack of economic opportunity that people are [INAUDIBLE].

But also to understand that it's not something that's foreign. It's not something that's separate. It's not something that's away. It's not the others. But that, in many ways, there are people who are completely around us, and actually that line between them and where we are is remarkably thin.

ZACK GUZMAN: This level of poverty doesn't exist because philanthropy hasn't done its job. You said it's because we have structures and systems that allow this level of inequality to take place. So in your mind, what are the biggest drivers of systemic poverty here in the US right now?

WES MOORE: Well, I think we have to be able to be honest to think about everything from the way we think about wages to tax infrastructure systems to the way we think about who then has the ability to be able to target supports in the correct mechanisms. You know, I think that we still very much have policies that are both putting people and keeping people in poverty.

And frankly, we have policies that are actually increasing the type of gaps that we've seen. So for example, you know, if we look at things like the wealth gap that exists within the United States, you know, income inequality in the US is the highest of all the G7 nations. The gap between Black and white income in the US has persisted over time, where median Black household income is 61% of the median white household income.

That's not just because one group has failed. These are policies, and this is a lack of reinforcement of other policies that we need to be able to have in place. And so when we're talking about things that we can and should be thinking about on a policy level, it is about how are we thinking about things like child tax credits, and where we can make basic adjustments on a child tax credit that could literally, in the stroke of a pen, be able to address issues of deep child poverty overnight and almost halve child poverty within a matter of years.

How are we thinking about, especially right now in this stage, how we can create more and better supports for our states, where, right now, we've seen where state revenues take a long time to recover from economic shocks of this kind of magnitude. Where after the 2008 recession, state tax revenues overall did not return to prerecession levels for five years.

And frankly, we're looking at a crisis right now that is going to have even greater shock levels to not the markets, but to the economy than we saw in 2008. And so these are things that philanthropy can do a really powerful job of being test capital, [INAUDIBLE] capital, risk capital. But if we're not having true and genuine policy conversations about ways we can adjust and structure those systems, then none of us will have the weight to be able to address the levels of economic injustice that still very much exist within our society.

ZACK GUZMAN: Yeah, I'm glad you mentioned the race wealth gap there, too, because it's something we've seen play out in 2020. Obviously, unemployment rate still very high for communities of color, whether you look at Blacks or Hispanics here in the US.

But even before then, when you talk about some of these systemic issues, the other big story in 2020 has been a story year after year here in the country, but it has to do with criminal justice reform and police reform.

And it's something that has been noted by you and other researchers out there focusing on the issue, noting that lifetime earnings for those who do get arrested or go to prison take a big, big tumble in what you expect to see for the rest of their lives here. So talk to me about how that issue is not just a social justice issue, but increasingly, an economic issue tied to this as well.

WES MOORE: Yeah, I mean, we can't adjust-- we can't address the racial justice and the racial wealth gap without also confronting this generational harm that was created by the criminal justice system. And you know, we are very proud to be part of a [INAUDIBLE] report recently just came out. And this study, the report, really shows how the system is extracting hundreds of billions of dollars from communities of color, the system that we currently have in place.

And it's both about showing the fact that there is a distinct difference in the disparity between basic contact with the criminal justice system. I mean, if you look, there is a overrepresentation of Black and Latino people amongst formerly incarcerated population, overrepresentation when it comes to basic touch points within the criminal justice system.

But we also see, exactly as you point out, Zack, you know, the lifetime impacts of it, where formerly in prison Black and Latino people, they suffer lifetime earning losses, you know, $358,000 and $511,000, around respectively, than their white counterparts who have losses of around $260,000. These are massive disparities when we're talking about people who were there for the exact same issues and are still coming back.

You know, the reality that-- and it shows right now that, you know, that for people we know that for a Black person-- for a white person with a criminal record, has a higher probability of gaining entry level employment than a Black person without any criminal involvement. And so you see how it's both about the impact and the racial lines in the criminal justice system. But it's also about the fact that in all of these conversations, we just know that race matters. And race is still the most reliable predictor of life outcomes that we have in this country.

ZACK GUZMAN: Yeah, I want to unpack that issue, too, because I cover cannabis here at Yahoo Finance. And that's something that we've seen, you know, the inequality there for a Hispanic male who applies for a job, who has an arrest tied to marijuana, might be a criminal past, to a white guy applying, it could be a nice resume boost. Because we've seen this play out in the data. You look at the arrest rate for Blacks in this country versus whites. It's more than three times as high likely than white people to get arrested on that front.

And on the focus of cannabis, I know you're a board member at [INAUDIBLE] Industries, a Chicago-based marijuana company here. And I looked at board members across the 10 largest cannabis companies. Last year, you were-- two of only 65 board members at those companies, two of 65 were people of color. You were one of them.

And when you look at the issue itself, in Illinois, the latest state to legalize marijuana, they set up a system where millions of that revenue goes back to communities of color, communities impacted by the war on drugs. How do you look at that as maybe a system or an example that other states, or perhaps, the nation can learn from, and maybe trying to solve some of those issues?

WES MOORE: I think it's a good first step. And I think it's a good first step. And I'm very clear on it being a first step for a few different reasons. The first reason is because we can not talk about the benefits of-- you know, the benefits of legalization without also, at the same time, talking about the consequences of criminalization.

We have seen how cannabis and the war on cannabis have had not just disproportionate, disastrous impacts on communities of color-- disastrous impacts on communities of color, where we are now even at this, today, watching states and corporations that are gaining massive revenue, billions of dollars of revenue, while we still have people who are sitting in prison because of it.

And this is an issue that's very personal to me and my family. And so there was this hyper criminalization of this issue that was used and very much targeted on communities of color, that we have to be able to have a conversation about everything from expungement and the way we're thinking about that, to also the way we're thinking about pipelining and job opportunities. Because you're absolutely right.

Right now, as it stands, if a person has a felony record, they can come back, come back home, and apply for certain jobs in the cannabis industry. Versus a person who has a misdemeanor or a felony record in the cannabis industry, they cannot apply for a job because their arrest record is because of cannabis, which makes no sense.

The second piece, though, that becomes equally important is on this issue of the wealth divide, where we cannot have this be a platform where it is creating a massive amount of new wealth and new opportunity, and not have there be a conversation about, well, what does that mean for communities of color? Where, right now, the wealth gap between America's richest and poorest families more than doubled from 1989 to 2016. Where, in 2016, the top 5% held 248 times as much wealth at the median.

And so we now are on the cusp of something that not only a very real conversation that this country needs to have, but also something that is a real moonshot opportunity for wealth creation and supplying opportunities for people that have been historically left out of this.

So it needs to be everything from the way we're thinking about distributors, to the way we're thinking about producers, to the way we're thinking about the large scale owners and the board memberships and the C suites of these companies that are growing and scaling and becoming very profitable on this. That cannot happen without real inclusion as being one of our core principles.

ZACK GUZMAN: Yeah, and again, it speaks to kind of the idea of all these issues that are still underlying the problem you guys are trying to solve here, at least playing a part in making it a little bit easier. But the CEO at Robin Hood, Wes Moore, appreciate you taking the time. Thanks again.

WES MOORE: My pleasure. Thanks so much.