New narratives and policy for diverse entrepreneurship

Deeply entrenched public policies have historically kept people of color from upward mobility, including New Deal-era minimum wage laws that excluded farm and domestic workers, as well as redlining that prevented people of color from obtaining mortgages and bank loans.

Today, leaders are exploring ways for policymakers to reduce that opportunity gap by examining the very nature of the entrepreneurial narrative and challenging the prized American ideal of self-made success.

Two such leaders are Chuck Collins, director of the Program on Inequality and the Common Good at the Institute for Policy Studies, and Rashad Robinson, president of Color of Change, a racial justice organization working on criminal justice and representation of race in the media and Hollywood, among other projects. MIT Sloan hosted both of them at “Amplifying Our Voices Through Public Policy” on Thursday, Feb. 11.

Here are four solutions both from their talk and a follow-up conversation.

Don’t ascribe charitable solutions to structural problems

Robinson pointed to public health disasters such as COVID-19, Hurricane Katrina, and the Flint, Michigan water crisis as prime examples of racism without repercussions. These disasters, which disproportionately affected marginalized communities, were merely treated as “unfortunate,” he said, with no real consequences or solutions.

“Far too often, we talk about inequality like it’s unfortunate, and so we end up sending water bottles to Flint and then stopping there and not cleaning up the pipes. We end up doing service days at inner-city schools instead of actually dealing with a tax policy that doesn't actually fund inner-city schools,” he said. “COVID wasn’t racist, and neither was Katrina, but America is. As a result, the inequality was amplified and hit communities in different ways.”

Government, Robinson said, must not see inequality as “either inevitable or an accident,” and instead must recognize how “through choices and decisions, [it] can actually end or reduce inequality.”  

Reframe the minority narrative from rescue to investment

When society frames racial minority communities as vulnerable, it is implicitly “asking questions about what’s wrong with those communities. Vulnerability is a personal trait” that implies that they need to be fixed, Robinson said.

Instead of approaching policy as a rescue mission, Robinson said policy should be reframed as an investment.

“What if we started out those conversations, even from a policy perspective, not thinking about helping those communities — but if we saw those communities as the protagonists in the American story?” he asked. Protagonists are people “you root and fight for,” he said, as opposed to people who need saving.

We should “build policies not because we’re trying to help those communities but [because] we recognize that investing in those communities, removing barriers for those communities, will be a force multiplier for all of us,” Robinson said.

Dismantle the American bootstraps narrative

Robinson referred to the “Oprah-ization” of the American business narrative, wherein people supposedly get ahead through pure hard work and grit.

Collins suggested that successful people need to be transparent about their advantages, from generational wealth to home-equity loans to support from the Small Business Association.

“People tend to tell their story through, ‘I did this, I did that,’ as opposed to, ‘Look at the help that I got,’” he said. Transparency is essential when telling stories of wealth creation, acknowledging — and thereby de-stigmatizing — any public supports that helped.

Collins noted that many entrepreneurs talk about their success in terms of virtue: waking up early, exercising. They’re ashamed to pull back the curtain.But they should be open about that and about societal supports as well, such as tax breaks, loan programs, the Federal Housing Administration program, the GI bill, et cetera — many of which weren’t widely available to some communities, he said.

“It’s not only thinking about your own story; it’s putting it alongside the history of public expenditures and racism in who got subsidies and who didn’t, who got opportunities and who didn’t,” he said. “There’s a certain amount of truth-telling and historical reckoning there.”

Reckoning aside, this could demystify the American ideal of success and stop the stigma of shame around failure in marginalized communities, he said. The truth is, not everybody can become an entrepreneur, and those who do have advantages.

“The cruelest society is a caste society that tells everybody it's all about your own individual initiative,” he said. “The United States doesn’t have social mobility. We have a race and class caste society, but we still are telling people, ‘It’s all about you and your character and your hard work.’ We're not all just born with a clean slate. There’s no such thing as a level playing field,” he said.

Explore new ways to build long-term wealth through a “decency floor”

Collins pointed to mortgage subsidies as a massive driver of the home-owning middle class after World War II, which created a financial domino effect for generations.

“We basically moved a fifth of the population from tenancy to home ownership,” he said.

He cited Vermont’s community land trusts as a current example of a solution, in which aspiring homeowners pay for the structure itself but a trust owns the land, considerably reducing cost, making home-ownership more attainable and building generational wealth. If homeowners do choose to sell, they simply don’t receive the increase in land value.

This way, “You create a third option between renting and absolute free-market home ownership, and you can build a third tier that’s essentially 30 years on now in Vermont. You have several thousand community land trust homeowners. You can pass a home on to your kids,” Collins said.

He also suggested restoring a progressive tax system at the national level and disentangling health insurance from employment — all part of what he called a “decency floor” that guarantees a minimum level of security to allow people to take risks, such as starting a business.

“That’s a barrier for an entrepreneur in this economy: ‘How am I going to pay for my health insurance during the 16 months when I don't have any income?’” he said. “Having broadly available, affordable, universal access to health insurance that’s not tied to a job is a component of a lot of societies that have higher rates of entrepreneurship.”

Instituting mechanisms for lifelong learning and job training, such as subsidies for vocational school, is another way to level the playing field.

Ultimately, Collins said, society needs to acknowledge that the land of opportunity maintains an economic system designed for the few — and then change it.

“I think part of the challenge is the powerful default narrative that justifies inequality and the racial wealth divide. If it were on a bumper sticker, it would be, ‘Everyone is where they deserve to be,” Collins said.

Instead, he said, we need to “demystify and disrupt those narratives by talking about the web of supports and the multi-generational ways in which advantage works to tee things up.”