JPMorgan has 'a responsibility' to recruit ex-cons, Dimon says
Jamie Dimon on Thursday published his annual letter to shareholders, setting the industry abuzz with his comments on big economic issues, such as interest rates, immigration and trade policy.
Less noticed — but nonetheless important — were his unlikely comments about recidivism in the criminal justice system and the responsibility banks have to hire employees with minor records.
The chairman and CEO of JPMorgan Chase called attention to a little-noticed proposal by the Federal Deposit Insurance Corp. that would allow banks to hire employees who have been convicted of small-dollar theft or certain minor drug crimes. The proposal, issued in January, would also give banks the authority to hire employees who were convicted when they were under 21 years old.
Currently, banks are prohibited from hiring anyone who has been convicted of minor crimes, such as small-dollar theft, without the approval of the FDIC.
In calling attention to the proposal, Dimon said JPMorgan, the nation’s biggest bank by assets, has an obligation to hire those who have spent time in jail.
“Our responsibility to recruit, hire, retain and train talented workers extends to this population,” Dimon said, citing research showing a relationship between joblessness and incarceration.
“The overwhelming majority of Americans who are incarcerated return to their communities after they are released,” Dimon said. “Reducing recidivism is not only important to returning citizens and their families — it can also have profound implications for public safety."
Describing the importance of skills training for people who have been incarcerated, Dimon praised a nonprofit group, called The North Lawndale Employment Network, that trains job-seekers as diesel mechanics for the Chicago Transit Authority. According to the group's website, mechanics at the CTA earn around $42,000 per year.
“This is a win-win for workers, employers and the economy as a whole,” Dimon said.
The FDIC issued its proposal in January. In addition to JPMorgan, the agency received letters in support of the policy change from Independent Community Bankers of America and several advocacy groups.
The comments were part of Dimon’s highly anticipated annual missive to shareholders. In the letter, at 46 pages long this year, Dimon touched on a wide range of subjects, from the importance of international trade agreements to the “giant waste of time” of many corporate meetings.
The outspoken CEO also likely did little to tamp down speculation about his political ambitions, as he weighed in everything from entitlement reform to the need for a path to legal citizenship for so-called Dreamers who arrived in the country as undocumented children.
"We need to resolve immigration — it is tearing apart our body politic and damaging our economy,” Dimon wrote. “Immigration reform is important both morally and economically. Immigration has been a critical part of America’s economic and cultural vitality. "
Throughout the letter, though, Dimon also focused on the importance of job training for people from disadvantaged communities.
He criticized the nation’s vocational and high schools for not preparing students to get well-paying jobs. Schools should be working alongside local businesses, he said, to properly train students so that they have marketable skills when they graduate, he said.
“We should be ringing the alarm bell, signaling that inner-city schools are failing our children — often minorities and mostly lower-income students,” Dimon said.
Additionally, Dimon reiterated his call for policymakers to overhaul the Earned Income Tax Credit. The refundable tax credit program is one of the nation’s largest antipoverty programs.
Many people — over 20%, according to Dimon — are eligible for the program, but don’t receive the credit, either because they don’t know about it or they simply don't file their taxes.
In the letter, Dimon called on lawmakers remake the program into a "negative income payroll tax," so that more workers have access and could receive the credit through their regular paychecks. He also called for expanding the program so that more workers are eligible, and also increasing the benefits for those who are unmarried or don't have children.
In advocating for the policy change, he noted that over 40% of American workers make between $7 and $10 per hour, making it hard for many families to get by.
“Decades ago, workers with very limited skills could earn a living wage to support themselves and their family,” Dimon said. “In this new highly technical world — where work skills are so greatly valued — the ‘natural wage’ for unskilled workers may no longer lead to a living wage.”
It's an area, he added, that “deserves mores study.”