NCRC Just Economy Conference 2023 — Recorded March 30, 2023
Deputy Secretary of Commerce Don Graves told the audience about his family’s rich history of overcoming unjust social and economic systems, before drawing connections from those experiences to the key programs and policies of the Biden-Harris administration today.
Speakers: Jesse Van Tol, President & CEO, NCRC; Don Graves, Deputy Secretary, US Department of Commerce
NCRC video transcripts are produced by a third-party transcription service and may contain errors. They are lightly edited for style and clarity.
JESSE VAN TOL: I’m so pleased to have my friend, Deputy Secretary of Commerce, Don Graves with us here today. And Don, you know, I was reflecting back few years ago, you in another role. We were sitting in my office, I was telling you about the office building and how we had acquired it. And you let me go on and then part of the way through, you interrupted me and you said, Jesse, my great, great, great grandfather, owned the hotel that stood on these grounds, the only black owned hotel in the city 100 years ago, more than 100 years ago, and it’s, it’s part of your family’s story. You’ve talked about it before. I wonder if you could share a few words about about that family legacy and his church.
DON GRAVES: Sure. Thank you. And Jesse, thank you for for having me back. It is wonderful to be back at the just economy conference, I think the most important conference that goes on in this city. But you’re right, the thing. That’s right. All right.
And I’ll get to why I think it’s the most important conference in a little bit, you’ll you’ll hear this roundabout way of getting to it.
So we all have families, we all have histories. But we all don’t know our our history. And we don’t celebrate our history, our family history, the way that we should.
Just so happens that my four times great grandparents were slaves. They had been freed. And they found themselves in Washington DC, as a lot of, of freed blacks did back in the day. They came from the South to DC to start a new life. They started a small business ended up being a it was a taxi business hack carriage business. So they had their buggy in their horses. And they bought a piece of land because they needed to stable their horses and raise a family.
The piece of land they bought is today, exactly where the US Department of Commerce sits. So it’s an interesting for me a very interesting through line that I’m running the department are helping to run the department where my where my ancestors started their business.
Now their son, three times great grandfather, James Wormley, was an entrepreneur, just like many of us, I’m a former entrepreneur. And he decided he was going to start some, basically he bought some houses and started renting them out. And he eventually bought a building that he turned into a hotel. And it was the premier hotel, not just in Washington, DC. But it was the premier hotel in the entire United States and members of Congress, governors, Civil War soldiers, you name it, they all patronized his hotel, that hotel sits on the site of the building where in CRCS headquarters currently exists.
His son ended up being the very first graduate of Howard University, a class of one. But the most poignant part about you can say, oh, that’s all that’s great. Wow. We you know about your history. It’s it. But the thing that I think is most important about it is that was what happened in 1877. In the parlor of the hotel, where NCRC sits and it gets back to why this is so the conference is so important and that apologize because I’m gonna get choked up talking about this.
So I told you that members of Congress met they regularly they stayed in his hotel, they didn’t get a not all of them got apartments, they are, you know, let rooms and in houses they stayed in the hotel. So you’ll remember that the the election back then that was Rutherford B. Hayes was the Republican at the time who was was running against the Democrat and I can’t remember right now, who the Democrat was, but you’ll also remember the parties were flipped back then. And they worked out a compromise the the, the legislators were they were put Rutherford B Hayes in the presidency, but they would end reconstruction in the south.
So what does that mean? That means decades and decades and decades of Jim Crow, which led to the systemic racism that we still feel today. led to the homeownership Loan Corporation and in the early 1930s, and the 1935 survey that led to, to the maps that led to redlining.
So when you think about our history, remember, you have to take it all. It’s not just the good things, yes, I had ancestors. And I am able to trace my history and know about all the things that they were able to do despite the challenges. But it’s also the bad things that that happen, and they’re still happening, and that we have to fight for every day, the systemic racism, that has led to challenges across our country that’s preventing so many entrepreneurs, people with good ideas, like my three times great grandfather, who not only ran a hotel, but was also one of the very first black patent holders.
But imagine all of the millions of kids across this country who have great ideas, who can’t turn those ideas, into lives of dignity, because they don’t have the opportunity because of the challenges that they face on a daily basis. So that’s why this conference is so critical for our country, for the people in every one of our communities across the country. So thank you for what you do.
VAN TOL: You know, I’m so glad you told that history done, because, you know, you can fast forward to today, and the racial wealth gap, as well as the gender gap, can continues to be a significant issue in the US. And I think when you hear our history told sometimes it’s like, well, there was slavery, and then sort of civil rights. Right. And, and really what you’re getting at is, even if the legal owning of people in the form of slavery was ended, we saw all kinds of policies that were really about controlling and exploiting people labor, and land in ways that were deeply unfair. And I think that history that history of, of ending of reconstruction, really gets at it. But but to fast forward to today, you know, what policies or initiatives is the Department of Commerce pursuing to work on this issue, and promote economic equity for communities of color, and underrepresented members of the American workforce?
GRAVES: It is a great question. And how much time do you have today? So we all know that this has been a challenge that the country has faced. And you can you can look at it from one perspective where it’s it’s been a winner take most approach, where the haves continue to reap the benefits and have nots don’t have the opportunity to even realize that they’re missing out on on opportunities.
One of the things that we’re doing that is different from the past is thinking about a new industrial strategy, one that recognizes that there are systemic challenges that are going on, that really questions the way that we’ve done things and forces folks to work in different ways.
So you may ask, What’s he? What’s he talking about? So let’s think about the ways that economic development, for instance, and community development has happened. Previously, think about the Amazon HQ to race. That’s because that’s what it was, it was like, who can throw the most money, the most incentives at Amazon so they can build a headquarters and maybe create a few jobs or I think about Foxconn. In Wisconsin, basically, it was a race to the bottom of who can who can spend the most money to attract a company that would say that they were going to build something and bring some jobs.
That’s not the way that we are building our economic strategy for the for the future. Our industrial strategy, right now has to be placed based. It has to be one where we’re holding folks accountable. It has to be one where we are forcing the applicants for these resources. And I’ll get into the programs in just a second for asking them to show us show. Don’t just tell us what you’re going to do. Show us how you’re going to do it.
And this is something that that I know NCRC has done for a very, very, very long time thinking about things like community benefits plans. That’s essentially what we’re trying to do is so you have historic programs, the American rescue plan, bipartisan infrastructure law, the chips and science Act and the inflation Reduction Act. We have never seen the likes of these programs in most of our lives, maybe a few folks saw some of this out of the Great Depression with the New Deal.
But it’s unlikely that we’re ever going to see these types of programs, again, almost $4 trillion worth of investments at one time to rebuild our infrastructure to rebuild our communities to build pathways to the future. So let me go into a few of these very, very quickly. The chips and science act, so many of you heard about this, it’s the most of it is focused on rebuilding our semiconductor industry, we know that we need semiconductors, because we use them in our cell phones, we use them in our appliances, in our cars and our equipment in our businesses. All of us need them. And we only produce 12% of the world’s chips here in the US, none of the most advanced chips. Great.
So we’re gonna focus on investing so that we can build more of these plants here in the US. But how we invest, where we invest, the ways that we get companies to invest and crowd in private capital is critical. We can do it one way where we just throw dollars out to support these fabrication facilities. Or we can say, we will give you an investment, but you have to show us how you’re going to get private capital also did the table, how you’re going to build a plan that supports workforce development. That creates pathways to folks who don’t have opportunities that incorporates not just the local community.
So I’m not to pick on Intel, but it’s an easy one for me, because I’m in Ohio, and they’re building a $20 billion fabrication facility outside of Columbus. It’s actually an it’s a Greenfield, it’s a it’s a farming community. They’re going to wipe that farming community out, basically and build a new fabrication facility. Well, how are you going to get folks in Columbus connected to that farming? That that fabrication facility out in, in rural part of of Ohio? How are you also going to connect to the suppliers, the manufacturers, the broader ecosystem in Akron, in Youngstown in Cleveland and Toledo, in Dayton. And in Detroit, and Pittsburgh, and Indianapolis and East St. Louis, how are you going to do that?
So that’s one of the things that this administration is doing is holding, is getting them to provide us with their plan.
And if they can show that they can do all of this in a reasonable way, and that they include local communities and organizations in their plan, then maybe they can get some of this funding. But if they can’t do that, why should they get any of the funding? Similarly, we have other programs like our build back better regional challenge, our good jobs challenge. Now our tech hubs program, and our re competes program. These are all through our economic development administration, all focused on building pathways on making sure that we have roadmaps that include local communities that include community leaders that in cute include local community development, economic development organizations, that that include universities, community colleges, training centers, and unions into everything that we do, because it’s it’s critically important if we don’t build in a comprehensive, holistic way, if we don’t have the plan. If we don’t see the roadmap, then we’re not going to be able to build the types of, of communities and economic opportunity that we all need. Probably more than I should have thrown out, but I know you would get it.
VAN TOL: Yeah, absolutely. Yeah. And how do you think about, you know, all of that, in the context of inequality, you know, one of the things that, you know, the COVID pandemic really hit black communities, minority communities, underserved communities hardest, Jelani Cobb was here yesterday, and and he said, wasn’t his words. He said, how the virus nowhere the hood was. And the point was really obviously, not that that’s true, but but that communities that that are vulnerable to begin with are often the first impacted, the most impacted. And so in the context of, of infrastructure in the context of thinking about an industrial policy, how do we think about the problem of inequality already in that context, how do we create jobs locally, that are not just in a place, but also that sort of equally benefit underserved communities in those places?
GRAVES: Well, I don’t have to tell you all the the numbers, I don’t have to tell you all the challenge that we have in communities, and they think about our our business community, and that 25% of the, the gap in inequality is as a result of the gap it between the majority of businesses and, and black and brown businesses. So the challenge that we face, whether it’s well, and let me throw one other number out at you, because this is important, this is not about this is this is not just about doing good, because we have to do good. And because some of us feel like it’s important. This is about economic opportunity. This country, if we had that gap in business opportunities, erased, this is the this is the Fed, this is not some crazy left wing outfit, I won’t name any left wing outfits.
But the the Fed says that we would have $6 trillion more in our economy, if we could eliminate that gap just with our businesses. And the Kellogg Foundation has found that if we could eliminate systemic inequities, we could grow our economy by I think it’s 2050 by $8 trillion. So when you’re talking about a 22, or $23 trillion economy, $8 trillion dollars is not chump change that’s meaningful for every part of this country.
So what we’re trying to do is take a very systemic approach to eliminating these these inequities through industrial strategy. And the like, I’ll give you one example. A lot of people paid attention to the the billions and billions of dollars that’s going out as part of the bipartisan infrastructure law, a massive program that is going to change our communities in ways that that I don’t even think all of us recognize at this point. But the thing that no one paid attention to accept for those of us at the Commerce Department was that it created statutory authority for the one agency in the entire federal government that’s focused on the support the long term success of minority businesses and other disadvantaged businesses.
That’s the Minority Business Development Agency. It’s been around since Nixon was created in the executive order. But every year, that has to be reappropriated. And and, and, you know, the last administration kept zero out that that budget, thankfully, our friends and in Congress kept fighting for it. Well, now we have statutory authority. So not only is it that’s exactly right, not only is this organization here to stay, but it has the mandate, not just the something that we’re hoping to do, but the mandate to go to every single department in the federal government and say, What is your plan for utilization of minority businesses and other disadvantaged businesses, we want to see your plan, don’t just tell you tell us what you’re going to do. Show us the plan.
And then we’re going to say, Okay, we think you need to change it, and they have to make some changes based on on that, that sharing of the plan, then, not only are we going to ask you to tell us what you’re going to do and show us what you’re going to do, but then prove it over time where you’re going to keep track of your your performance, we want to see the dollars, show us where the money is going. So we’re going to track them.
And this is all part of our mandate. This isn’t Don saying something I want to do. Yes, it’s something I want to do. But we are going to track it. And then we’re going to be able to go back and say, Well, you didn’t perform. And more importantly, the companies and grantees that said they were going to do something didn’t perform. So we can hold them accountable. Again, something that that Jesse, I know you you know, all about.
So it’s these types of of efforts that I think are going to be a game changer for communities of color. And so we’re doing this all across the federal government, whether it’s the our efforts with with with Justice 40 Our efforts in building equity the President has signed, I think it’s eight executive orders on equity, all focused on making sure that we’re creating opportunities for all Americans. And that’s something that we did at the Department of Commerce, we changed the mission of the Department of Commerce, the the mission was to create economic growth. growth and, and competitiveness in the United States, I may be off a little bit on the on the exact language. But what we did was we added three words, at the end of the mission for all communities, because we are the Department of Communities and people, not the Department of Business.
VAN TOL: And I think a lot of people don’t really know all of the things the Department of Commerce does. And it turns out, you do many diverse things. You know, you have jurisdiction over NOAA, the National Oceanic and Atmospheric Administration in the sphere of administration, but you also play a really important role in data. And, you know, part of this too, I think you cited some statistics in terms of the wealth loss to GDP loss and the economy, because of inequality. You know, it’s estimated that will be a non majority minority society within 20 years, 100% of the net new household formation over the next 20 years will be people of color. Those are the future homebuyers of America. But we also know that women and and minorities are starting businesses at a faster rate. And so you play a really important role in terms of the census, and generally on data issues like data privacy, cybersecurity, and the role of technology in the economy, what, you know, what is the Department of Commerce doing around these issues, really, first of all, sort of tracking the data that helps us know and understand what’s going on demographically. And with our country, and then And then secondarily, like this threat of of cybersecurity, how other people are using data of their own accord to really threatened and harm people.
GRAVES: So it’s a great question, let me quickly in 15 seconds, or 30 seconds tell you what the Department of Commerce is. So we’re the I talked about the Minority Business Development Agency, the Economic Development Administration, NOAA National Oceanic and Atmospheric Administration, which includes the National Weather Service, that’s our climate data agency for the entire federal government, Census Bureau, the Bureau of Economic Analysis, the National Institutes of Standards and Technology, the National Telecommunications and Information Administration, which by the way, is connecting every household, every family, every street, every community in the country with high speed internet that is affordable. We’re doing that. It includes the Bureau of Industry and Security, the International Trade Administration, the National Technical Information Service.
Anyway, just a few, just a few things going on. But to your point, census, BGEA your economic analysis at NOAA and other parts of the department are focused on data. Because information as you all know, is power. And the way that we track information, the way that we use information is absolutely critical. So in addition to trying to make sure that in the next decennial census, which will be here in no time, that we’re adequately counting every single individual in this country in every community, not just some communities, we’re also thinking about the ways that we share data, that, that we use data in all of our programs. In fact, our our the undersecretary, who leads both the Bureau of Economic Analysis and census has built a is building a new effort focused on how we do regional economic development, which I think would be a great tool for many of you in the work that you’re doing. So you can see the impact of programs and see how it’s affecting people directly.
The NOAA is tracking climate data and the impact working with HUD working with transportation and the Department of Energy working to track the on the impact of climate on communities of color. Thank you for for instance, we now have a new program. That’s I think last summer it was operating in about a dozen cities. I think we’re expanding it this upcoming summer tracking, heat impact its heat mapping. So the impact that heat has in our urban course in particular, on especially people of color and and underserved communities, because we know it has a disproportionate disproportionately harmful impact. act on those communities anyway, these are all the things that that we’re doing tracking data is absolutely critical. It helps us build out the science and then make programs that are science based and that recognize that equity, and inclusivity have to be at the core of everything that we do.
VAN TOL: Thank you, Don. And it’s so fascinating. I just do want to give a shout out to one of our researchers, Dr. Bruce Mitchell, who wrote his thesis on, on the effect of, of really urban heat concentrations effect on health. I talked last night about, you know, how our issues really interconnected, we have to think not just about redlining, in terms of the bank, but really redlining in terms of land use policy, the impact that it has on people, a lot of communities of color were built with more concrete and less trees, leading to greater levels of heat, which which has an impact on health. Last question, Don, I remember, you were a chair of, of the transition team for, for the Treasury and, and bank regulatory agencies. I remember, you know, we were talking Don, and you were like, well, you know, the President might want me to do this. Might want me to do that. I think I think commerce was kind of there was a kind of a list of things. It was like in maybe commerce. And, and, and obviously, given your background and history, there’s there’s a real natural connection there. But it’s Is there anything you’ve learned that you really didn’t know or didn’t appreciate? About the Department of Commerce, before you took the job?
GRAVES: The Department of Commerce is probably the most important department that folks don’t know really think about. It’s everyone thinks about Treasury. Treasury is a fantastic department, a lot of power, a lot of tools, you can do a lot to support communities. And if you build these tools the right way, but the Department of Commerce is under appreciated. But it’s at the core of the President’s agenda right now. You think about industrial policy, you think about supply chains, you think about the challenges that we face, around the globe, from our adversaries. You think about the rise of AI everyone’s been paying attention to to AI chat GBT and the like, we’re the ones who who actually work on on artificial intelligence, quantum computing, and the like. So there are so many tools at the Department of Commerce that I’m learning still even two plus, well, two years into this.
I’m still learning every day, something that I didn’t know about it before. But how we harness those tools, I think the Department of Commerce is the is the agency that can have the most impact on the communities that you all represent and serve. Because we have all these different tools all in one place. So if we do this the right way, we partner with you all. And that’s something that I’ve made as a top priority is partnering with stakeholders that the department hasn’t always listened to. We can actually have a massive impact, to be a more competitive country to create opportunities for everyone in every corner of the country, not just some corners of the country.
VAN TOL: Wonderful. Another round of applause for the deputy secretary. Thanks so much.
GRAVES: Thanks, Jesse.