Economics In Brief: Patagonia CEO Gives Away Wealth To Fight Climate Change

Plus, a look at transportation insecurity and poverty.

(Photo by Patrick Hendry / Unsplash)

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Patagonia’s “Reluctant Billionaire” Founder Uses Wealth To Fight Climate Change

Patagonia founder Yvon Chouinard has formulated a way to use his family’s net worth, currently valued at $3 billion, to fight climate change – by donating all of it. The New York Times reports the Chouinards are transferring about 2% of overall shares into the Patagonia Purpose Trust. The other 98% company ownership has been donated to the 501(c)(4) Holdfast Collective, a nonprofit branch of the company, ensuring the company continues to use its profit to combat climate change.

Next City’s Senior Economic Justice Correspondent Oscar Perry Abello notes such perpetual purpose trusts are not a new solution for mission-driven companies. As he reported in 2019, the Oregon-based Organically Grown was amongst the first pioneering companies to go beyond employee-ownership into steward-ownership in its effort to protect mission in perpetuity.

“Hopefully this will inspire a new type of capitalism that doesn’t end up with a few wealthy people and a lot of impoverished people,” Chouinard told the Times. While the Times notes that the Chouinards will not receive a tax benefit for the donation, Bloomberg’s analysis concludes that the donation means the founder would avoid paying an estimated $700 million in federal capital gains taxes that he would have owed if he had sold the company.

A New Report Shows Combating Poverty Doesn’t Have To Mean Displacement

According to a new Brookings Institute’s report, there is a way to make investments in low-income neighborhoods without displacing current residents – and we already have examples. Researchers found that, between 2000-2015, 193 U.S. neighborhoods have found a large decrease in poverty without displacement.

This phenomenon was largely due to inclusive prosperity, researchers say, which allowed local residents to grow their wealth and property values right in their own neighborhoods. The report finds eight total key indicators of inclusive prosperity: External indicators include lower homicide rates, low-risk displacement and positive economic growth, and internal indicators include high homeownership rates, lower residential vacancy, increased housing density, greater self-employment and the presence of community organizations.

Over Half Of Impoverished Adults Face Transportation Insecurity

One in four U.S. adults experiences transportation insecurity, or the inability to efficiently go to and from work, school and other activities, according to data collected by the University of Michigan. And that experience is closely linked to income, with more than half of people living below the poverty line facing such insecurity.

Researchers found that the largest demographics affected by transportation insecurity were Black and Latino people, at 33% and 29% respectively. Transportation insecurity was also more likely in urban areas, at 39%.

“Transportation security is an essential element of economic mobility, individual well-being and understanding how to address poverty,” says co-author and University of Michigan assistant professor Alexandra Murphy. “If people don’t have the ability to move from place to place, they’re going to struggle to get to work, health care appointments, school, grocery stores and social services.” The study involved over 187 interviews and used the team’s transportation index, a survey inspired by the food insecurity index.

Study Finds $15 Minimum Wage Would Lift 7.6 Million Americans Out Of Poverty

Though high-cost living states like California are currently mulling over a $22 per hour minimum wage for fast-food workers, most other states are still fighting for a $15 per hour federal minimum wage. That’s more than the double current federal minimum wage of $7.25, which has remained stagnant for over 13 years.

A new analysis by Urban Institute is now adding weight to the argument. As Business Insider’s reports, the institute’s paper concludes that across all demographics, 56 million workers could be impacted by a $15 minimum wage, with an average income increase of $5,600.

Such a policy would also lift 7.6 million workers out of poverty, with the greatest possible gains for Hispanic families, the Urban Institute finds. The group could see a $5,900 average rise in earnings, with family resources increasing by approximately $4,500.

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Marielle Argueza is Next City’s Equitable Cities Reporting Fellow for Racial Justice Narratives in partnership with Triad City Beat in Greensboro, North Carolina. Formerly Next City's INN/Columbia Journalism School intern for Summer-Fall 2022, she’s a journalist with more than a decade of experience reporting on education, immigration, labor, criminal justice, climate and more. Her work in K-12 education is award-winning and she was recognized multiple times by the California News Publishers Association. She is a recent graduate of Columbia Journalism School, where she was Toni Stabile Investigative Fellow. Her work includes a story on Harlem’s last assisted-living facility for people living with HIV/AIDS; a profile on New York State’s first Farmers Union; and a database of deaths within the Milwaukee County Jail. She is also a recipient of other fellowships and scholarships from several notable organizations within the news industry including the Asian American Journalists Association, Association of Alternative Newsmedia, ProPublica, and the Journalism and Women Symposium.

Tags: climate changeminimum wagetransportation accessperpetual purpose trustspatagonia

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