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Update to Treasury’s Efforts to Foster a More Inclusive Economy

On his first day in office, President Biden called upon federal agencies to do everything in their power to remove persistent structural obstacles that have held too many businesses, neighborhoods, and families back from achieving their full potential.  For Black Americans in particular—who have been impacted by acute legacies of racism and policies that still result in disparate outcomes across indicators of health, education, and financial security, and more—this work remains urgent. The Treasury Department is galvanized to unlock the economic potential of underserved Black communities, an endeavor which ultimately means a stronger economy for all of us.  As we reflect on Black History Month and the importance of this work, I want to highlight some of the progress made and to affirm our commitment:

Equitable Recovery

During the Great Recession of 2008-2011, the emotional and financial toll of foreclosure, particularly on underserved families, was devastating.  According to Treasury staff calculations, Black families lost 44% of their wealth between 2007 and 2013 and had not fully recovered it when COVID-19 struck.  The potential for such economic scarring commanded swift, decisive action by Congress and the Biden-Harris Administration.  Through President Biden’s historic suite of legislation, starting with the American Rescue Plan, Treasury and other federal agencies were able to put supports in place for economic recovery, including Black economic recovery, to happen quickly and more equitably, the results of which are showing up in meaningful ways: 

  • Black unemployment has not only dropped to and remained close to historic lows, wages have also risen faster than inflation.  Real earnings increased by 5.0% for the median Black worker between the fourth quarter of 2019 to the fourth quarter of 2023.
  • Thanks to a historically strong labor market recovery and additional support, such as President Biden’s expansion of the Child Tax Credit,  Black women 25-54 years old have seen their labor force participation rates climb by approximately 1.5%, compared to pre-pandemic levels.
  • The number of Black workers that were self-employed—a key indicator of entrepreneurship—increased by approximately 30% from 2019 to 2023, while the number of White workers that were self-employed increased approximately 1% during the same period.

Still, these results were not a foregone conclusion. Treasury took specific actions to help make this recovery particularly equitable.  For example, Treasury has:

  • Helped Black families stay in their homes during the pandemic.  According to the most recent data, more than a third of Emergency Rental Assistance Program recipients self-identified as Black, and 35% of Homeowner Assistance Fund participants self-identified as Black.
  • Delivered small business and community finance capital to Black communities.  Through the Emergency Capital Investment Program (ECIP), Treasury has invested $1.4 billion in Black-owned and majority Black shareholder Community Development Financial Institutions (CDFIs) and Minority Depository Institutions (MDIs).  Treasury projects that ECIP investments across the portfolio may drive an additional $80 billion in lending to Black communities over the next 10 years.  In addition, Treasury is administering the State Small Business Credit Initiative, which provides nearly $10 billion to states, Tribes, and territories to support small businesses and empower them to access the capital needed to invest in job-creating opportunities.  That includes $2.5 billion in funding and incentives to directly support underserved businesses and to jurisdictions that are successful in reaching underserved businesses.
  • Increased federal business with Black businesses.  In fiscal year 2022, Treasury awarded over $188 million in government contracts to Black-owned businesses, an increase of $75 million over fiscal year 2020.
  • Partnered with the private sector to extend our investments.  Working alongside Vice President Harris and the Treasury Department, the Economic Opportunity Coalition raised $1 billion in deposits to support CDFIs and MDIs, and has pledged to reach $3 billion in deposits in 2024. 

As Deputy Secretary of the Treasury Wally Adeyemo described in his fireside chat with Spelman Chair Emeritus Roz Brewer at Spelman University, Treasury recognizes that our investment in Black communities is an investment in America. By intentionally designing policies and programs to account for the needs of the most marginalized, we’ve seen strong economic results for all Americans.

Looking ahead, our goal is to make sure these recent achievements are not a one-time attempt but embedded in Treasury’s mission to drive a strong and secure economy in the long-term.  This month, we have two major announcements that reinforce and advance this vision:

Hiring Treasury’s Inaugural Chief DEIA Officer  

Recently, we welcomed Dr. Rhianna C. Rogers as the first Chief Diversity, Equity, Inclusion, and Accessibility (DEIA) Officer, signifying a strategic move towards transformative leadership.  Dr. Rogers is renowned for her expertise and transformative impact at RAND Corporation and brings a unique background that aligns seamlessly with our commitment to diversity and inclusion.  In her new role, Dr. Rogers will continue to build a Treasury team that empowers all communities, embodying the principles of equity and inclusion.  Her appointment is a testament to the Treasury Department’s forward-thinking approach, ensuring that inclusivity is not just a goal but a lived reality.

Charting our path forward

On February 14th, our dedication to an inclusive future was affirmed with the release of the Department’s Equity Action Plan. This comprehensive roadmap charts the course forward, outlining six strategies to tackle persistent barriers to economic opportunity that have marginalized underserved communities throughout our nation’s history.  Key strategies include:

  • Repairing the economic damage of COVID-19 by ensuring access to modern infrastructure and critical services;
  • Scaling capital delivery and technical assistance to support small businesses and community assets;
  • Improving financial health of underserved individuals and communities;
  • Ensuring all Americans receive income-boosting tax credits for which they are eligible;
  • Increasing procurement with underrepresented businesses; and
  • Ensuring the environmental and economic benefits of the Inflation Reduction Act reach underserved and Tribal communities.

Our goal is to implement these policies with the same intentionality we brought to the American Rescue Plan.  The American people are counting on us to foster an inclusive economy where we invest in the economic potential of our underserved communities.  This is how we will build an economy that truly works for all.