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Understanding ‘Economic Justice’ with Max Vargas from Latino Community Foundation

Understanding ‘Economic Justice’ with Max Vargas from Latino Community Foundation

You may recognize Max Vargas as Deputy Director of First 5 California or as Senior Policy Advisor to former Stockton Mayor Michael Tubbs. Vargas has been a long-time advocate for underserved communities, addressing housing access and environmental justice, in addition to his work in the Latinx community. I recently spoke with Max Vargas, who was recently named Director of Economic Justice at the Latino Community Foundation, about the plans for his work at LCF. This interview has been edited for clarity. 

Would you please define “economic justice” and explain “equitable economic policies”?

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When looking at economic justice, we think about ensuring that folks have real opportunity, real access, real results containing economic mobility, economic prosperity. And on the Justice front, that we move away from systems that have been predatory on one end, exclusionary to a large extent [and] getting them to not just be inclusive in their practice, but in their results. For example, the Latino community, which is such an important community for everybody, for the economy. When we talk about essential workers, we’re talking about, in many regards, a long-standing injustice in that a community has to work harder for themselves at that much more risk and still be trailing significantly in wealth gap, in wage gap, and in overall prosperity. So, I think that’s a little bit of where the root of the injustice lies.

Since the 60’s plus, every single economic crisis that has befallen the city, whether it be inflation, housing bubble burst, or recession, the fallout always disproportionality affected the Latino community. I think, on the equitable economic policies piece, it really is about reaching our community where the needs are highest, where there are historically less resources, less investments, even disinvestments in the past, and finding ways to leverage those opportunities.

There’s that line that ‘talent and intellect are universal, but resources and opportunity are not’ and haven’t been. Equitable policies make-up for that. They provide more to account for that difference. 

Would you please give me one specific example of equitable economic policy?

We saw over the last year when there were efforts during the pandemic to support small businesses. It’s a noble effort. Small businesses needed the help, but what ended up happening was that dollars didn’t reach really small businesses, the smallest businesses had no means of really accessing those dollars. Communities of color and the Latino community were disproportionately left out of those funds all together. Even though the spirit of the program was well intentioned, tactically it didn’t actually apply that way because the barriers were too high.

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The equitable approach would have been to actually fund and support these dollars making their way to the smallest of organizations and not requiring the most established and largest budgets for businesses to be eligible. Frankly, even looking at vehicles outside of some of those entities and finding ways to fund CDFI’s, Community Development Financial Institutions. That’s one sort of vehicle where CDFI’s are designed to support businesses that are so small or so new or not as professionalized as others that otherwise wouldn’t get the lending or access that a larger business might with a traditional loan at a traditional bank.

Businesses that are often left out are micro-entrepreneurs and street vendors, that may face more lending challenges, may not be as liquid, they may not have seasoned an established banking relationship with traditional loans. There are other models in different spaces of economic policies that can relate to how we get to empowering workers in the economy.

There has been a lot in the news as of late around unionization efforts in different industries at different companies. That’s one example of workers coming together fighting for their own equity. There are models where that’s less of an issue; some novel approaches where folks are pushing for worker owned-cooperatives. The workers actually own the means of production and own the company. There’s real ownership and not just an approach that puts them at odds with management and puts them at odds with the progress and prosperity of the company. There’s not that tension point, but there’s actual gain on both fronts. 

How do these concepts guide the work you do at Latino Community Foundation?

For me, they outline the fact that we have a Latino community that is just so driven to be active, to be engaged, to start a business. It’s a very entrepreneurial community. There are all these drives that are there and the question is, how do we make sure that we’re providing the necessary supports and investments, at the very grassroots level, at the community level, neighborhood level, that is [going to] reach them and be worthy of the work they’re already doing? Because they’re working very hard, contributing a lot, they’re paying taxes, they’re being essential workers. Having them be the reason that the economy is doing well is one thing, but the economy should be the reason that they’re doing well.

I think about, even, my own personal story as an immigrant myself. As I think of folks like myself and my family and the sacrifices that so many people had to make, that we stand on a lot of shoulders, and question to what end? How do we make sure that all those sacrifices were honored and that we shape the system so that we’re not having systems that dishonor all that work and dishonor all that passion?

Please tell us about yourself, your previous work experience, and how that will help you in this new role.

I was born in Lima, Peru and I emigrated at age five. In fact, I was an unaccompanied minor. We were fleeing Peru, like today, many Central American families are fleeing violence and danger. We were fleeing at the time [of] the terrorism and attempted coup d’états in Peru, not to mention severe economic instability. We were lucky enough to get political asylum, [then later] residency, and eventually citizenship. I know it’s not a path that everybody has access to; not everybody has that benefit. I would say if I’d have been seeking asylum four years ago or less, I know that I probably would not have gotten it, and we would be in a different situation. I share that only to say that I’ve been lucky.

From that experience, I took away that I was unaccompanied but not alone.

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I had family I was able to reconnect with and eventually our family was reunited. When we arrived, there were programs, community based organizations, food programs, food stamps, and a number of other things that made the transition easier. I noticed as an immigrant, from that experience, that everything is by design. The reason we have certain things in some countries and not other countries. Or within one zip code in one city and not in another zip code in another city [is] because it was designed that way by people. People can play such a big role in it, we can shape society and change the systems around us and we don’t have to be nihilistic about it. 

Many of us have felt the impacts of rising costs, whether it be gas, food, housing, etc. From what you have heard, what are the greatest challenges for our Latinx communities here in the Bay Area?

Place matters. The Bay Area was already an area of higher cost of living. You add to that the fact that a lot of our Latinx communities are in different roles and doing different work, but there are a lot of Latinos that are also in the service sector. Some of that work is some of the most skilled work around, but it’s not the most high-paid work around. The Latino community is already bearing a lot of costs in the Bay Area, and even facing the cost of having to get pushed out of the Bay Area because of housing, rising housing and rental costs.

In addition to that, a significant portion of the Latino community overall is unbanked or underbanked. In many instances, that means that they may be more cash-heavy, not putting their money to work for them. That means maybe money under the mattress or money stored at home somewhere, like a rainy-day fund that is depreciating as we speak. The price of goods, everything, is going up, and the value of those dollars that are sitting there is going down. Those dollars are losing value as we speak, while the economy starts recovering for some communities more than others. 

What programs or policies are in the works to assist our Latinx communities?

We’ve just announced that we’re going to be supporting a number of organizations across the state really looking at leveraging federal investments. The American rescue plan is fast and it’s a $1.9 trillion American rescue plan. We’re talking about how that actually reaches communities, as I mentioned in a previous example of the PPP program. Some of these dollars won’t get into the community unless we’re being very intentional about that work.

We’ve funded $1.4 million in grants [to] 35 Latino-led organizations across the state to ensure that there’s equitable distribution and implementation of those federal funds. Several organizations in the Bay Area, Silicon Valley, throughout Northern California and Central Valley, and statewide are receiving funds from this award. That’s a system-level approach that we’re taking to support grassroots organizations [and] community-based organizations in communities throughout the state so that communities are not left out of this next slate of awards. This next bit of money is coming down from the federal government. That, like I said, is actually their money, it’s money that they pay into. It’s money we all pay through taxes [from our] work. It’s money that the Latino community should see a benefit from so that there’s programming and investments made that actually reach them that address things like housing insecurity, food insecurity, [and] the fact that when the pandemic first hit, Latinos were twice as likely to lose their jobs.

All the while the ones that did stay in the workforce were essential workers. It was a double whammy to address those things through investments at the local level. As part of the economic justice portfolio that I’m leading, I’m very interested in how we make sure we address the long-term wealth gap of Latinos. 

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