On Thursday I’m releasing my annual letter to
shareholders. Beyond describing the state of our company, I am proposing a vision for how all businesses can live up to their responsibility to spread opportunity throughout America.
As the economy is transformed, government and private companies must collaborate to add jobs, increase wages and help those left behind. We must overcome divisiveness and polarization, and work together on three policies that would help businesses and workers adapt to globalization and technological change.
First, Congress should reform and expand the earned-income tax credit. The EITC rewards work and supplements the incomes of low-paid workers. A single mother with two children earning $9 an hour—approximately $20,000 a year at full time—could get a tax credit of more than $5,000. Last year the EITC lifted an estimated nine million Americans above the poverty line.
Yet it is far from perfect. Each year, about 21% of the people who are eligible for the EITC don’t file for it, likely because they don’t know about it. There also are many fraudulent claims. And the current rules make too few workers eligible. About 21 million Americans earn between $7.25 and $10.10 an hour. It’s hard to argue that this is a living wage, particularly for workers with families.
Converting the EITC into a payroll credit would deliver the benefit to more Americans in need. Automatically calculating the credit for everyone would help, too, while reducing fraud. Eligibility should be expanded to include more workers without children.
Supplementing workers’ wages is an investment, not a gift. It draws more people into the workforce and increases the likelihood they will remain employed. That leads to positive social outcomes, such as more household formation, less crime and better health. The American economy is generating an enormous amount of wealth, and expanding the EITC would allow more people to access it while boosting overall productivity.
Second, business and political leaders—local and national—should focus on better employment training as a way to improve Americans’ productiveness and earning power. The U.S. used to boast the world’s best-trained workforce, but the challenge today is adapting to the labor market’s shifting demands. America’s high schools, vocational schools, technical schools and community colleges should work together with local businesses to train students in skills that match high-paying jobs in growing sectors. Apprenticeships and skill certifications ought to be widely available, giving workers an affordable route to better-paid positions. And such students can still return to college if they so choose.
Right now, Americans are all paying the price for the education system’s inability to prepare students for employment. The U.S. ranks 24th out of 33 advanced countries in math and science, according to the Organization for Economic Cooperation and Development. Making an investment that gets us to the OECD average in the coming decades would significantly boost America’s economic competitiveness.
Finally, as the labor market tightens, helping former prison inmates re-enter society would help fill job openings and heal many lives and communities. Making it easier for people with criminal records to find employment could prevent them from returning to criminal activity. That could break the destructive cycle of crime and joblessness that’s evident in too many Americans cities and towns.
The barriers to hiring citizens returning from incarceration can be high, and some are even imposed by law. For instance, the Federal Deposit Insurance Corp. has rules governing who can work in a bank, disqualifying some people for even minor convictions. But the FDIC has proposed changes to allow banks more flexibility, and JPMorgan welcomes that reform. Our company’s responsibility to recruit, hire, retain and train talented workers extends to this population.
Recently, I visited one of our partners in Chicago, the North Lawndale Employment Network, which gives formerly incarcerated people a path to well-paying jobs. The network also builds a pipeline of trained mechanics for Chicago’s transportation sector. This is a win-win for workers, employers and the economy as a whole.
These are just a few examples of how government and private companies are working together to create inclusive economic growth and a better society for all. By cooperating to address labor challenges, we can solve one of the greatest challenges facing our country. That would be good for everyone—and good for business.
Mr. Dimon is chairman and CEO of JPMorgan Chase and chairman of Business Roundtable.
Appeared in the April 5, 2018, print edition.