President Joe Biden and Vice President Kamala Harris ran for office making the case to “build back better” from the COVID-19 pandemic. Biden has begun to fill this promise by introducing a comprehensive infrastructure plan.
While the plan is not law, it sets the stage for a redefinition of the role of American government to use tax dollars to support American infrastructure, create jobs and make America stronger. This plan is a shift in the trickle-down economics of the last 40 years that has led to climate change, growing wealth gap and – as we have seen during the pandemic – an atrophied social net for all Americans. Biden has defined infrastructure in a more holistic way to acknowledge that the most important part of Americas infrastructure is its people
Going Beyond Roads and Bridges
First, the administration’s definition of “infrastructure” extends way beyond roads and bridges. We are talking about broad investment in sectors that comprise the fabric of healthy communities and economies, including tax credits and new spending to support affordable housing, childcare, education, clean energy, manufacturing, workforce development and in-home care.
Biden has made it clear that his administration has applied a racial, gender and economic equity lens to policymaking, using investment to build the infrastructure that create pathways out of poverty.
“Trickle-down economics has never worked,” he told Americans in a national address as he approached his 100th day in office. “It’s time to grow the economy from the bottom and the middle out.”
Second, the administration talks about moving “from crisis to opportunity.” We’re in the midst of global public health crisis, an economic crisis for service workers and many small businesses, a climate crisis and a national reckoning on racial injustice. The pathway out of these crises, Biden argues, is strategic investment – investments in businesses and programs that build a more resilient and inclusive economy. Biden has earmarked funding to make buildings and homes more energy efficient, to support workforce development and retraining and to increase access to early childhood and college education.
The Opportunity for Bankers
So how should the banking and investment community respond? Strategic investments focused on these broader definitions of infrastructure offer an opportunity to grow shareholder value while also strengthening communities. Smart investments made today can also position banks to take advantage of new programs that are part of whatever version of the infrastructure bills makes its way through Congress.
There are local businesses addressing critical issues at the heart of Biden’s infrastructure plan. And they’re doing so by putting low- and moderate-income (LMI) communities and people of color at the center, with models that have the potential to create jobs and savings that put money back in people’s pockets.
Sunwealth, a clean energy investment firm based in Cambridge has helped community banks and private wealth managers put money to work in community-based solar projects that create jobs, energy savings and local and regional resilience. Sunwealth is partnering with the city of Cambridge, local housing groups and environmental justice advocates to bring energy savings to LMI households through community solar projects. A solar parking canopy on an office complex on Route 128 will deliver long-term, meaningful savings to Boston-area LMI residents, for example, as well as local social service providers and affordable housing nonprofits. Through a low-income community shared solar agreement, the system will provide $225,000 in lifetime savings to LMI offtakers – enough to provide 50 income-eligible households with $200 in savings a year on their electric bills.
Dorchester-based Maven Construction is focused on energy efficiency and energy retrofits for educational, multifamily, medical, research, municipal and infrastructure facilities. The minority– and woman-owned firm also works to create career pathways in construction for women and people of color.
CareAcademy offers workforce development training that aligns with the administration’s focus on in-home care for aging seniors and persons with disabilities. CEO Helen Adeosun founded the company to empower caregivers to learn how to deliver the best care to their clients, and then to “upskill” and continue their education over time to better serve clients and advance their careers. Today, the company provides home care and home health agencies with a best-in-class online education platform that delivers video-based classes and real–world scenarios that walk through aspects of the caregiver experience, training thousands of caregivers a month.
Biden is proposing investments that help us chart a path forward as a nation. The fact of the matter is that if America wants to remain a world leader it has to invest in its people. With banks looking for ways to show they are committed to diversity this is an opportunity to not just balk at the price tag, but look at it as permission to get creative with responsible investments.
Malia Lazu is a lecturer in the Technological Innovation, Entrepreneurship and Strategic Management Group at the MIT Sloan School of Management, CEO of The Lazu Group and former Eastern Massachusetts regional president and chief experience and culture officer at Berkshire Bank.