Business leadership needs to become more diverse and the tax code should be rewritten for the sake of the U.S. economy, Elizabeth Warren, the U.S. Senator for Massachusetts, said Wednesday during the CNBC Institutional Investor Delivering Alpha Conference.
The wealthy keep finding loop holes to avoid taxes and use their powerful influence in Congress to write laws that benefit their own interests at the expense of average workers, Warren argued at the online conference. “We’ve got to break the influence of rich folks,” she added, as “they make their voices heard in Washington louder than anything else.”
Warren pointed to the Trump administration’s tax cuts for millionaires, billionaires, and giant corporations, saying they drove down revenues for the government to keep the U.S. running.
“Folks who’ve got power, don’t give it up easily,” she said. “If you’re part of the club, you keep that power close and that means we have a lot of white men who are holding on to the power they’ve got and they don’t plan to share it.”
Warren, who has proposed a $7 billion small business equity fund for minority entrepreneurs, said that diversity makes businesses stronger and countries benefit from that, as well. Black-owned businesses need seed money, which tends to come from accumulated family wealth that is often tied to home ownership, according to Warren. But African Americans have been cut out from that sort of wealth building as they were kept from buying homes through redlining for decades, she said.
Meanwhile, Covid-19 has exacerbated inequality in the U.S., with communities of color hit particularly hard by the pandemic, Warren said.
“Just peel back that layer just a little bit,” she said. “This has to do with generations of systemic racism.”
Millions have Americans have lost their jobs during the Covid-19 crisis, with joblessness spiking to 14.7 percent in April. The unemployment rate remained elevated at 8.5 percent in August, up from 3.8 percent a year earlier, according to a statement Wednesday from the U.S. Bureau of Labor Statistics.
The health of the labor market is mixed, according to Bank of America economists.
“Small business employment remains stagnant,” with initial jobless claims running at “recessionary levels,” they said in a research note Wednesday. “The economy continues to recover, but the next few months will be crucial to monitor as stimulus fades and more activities are moved indoors.”