Making DEI the Cornerstone of the Public Finance Workforce
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Connecting state and local government leaders
COMMENTARY | There is an opportunity to create a more diverse public finance sector with the expected increases in employee turnover in the coming years.
Diversity, equity and inclusion is a central tenet of Black History Month. As president of the National Association of State Treasurers, a bipartisan group of state treasurers and public financial officers from across the nation, one of my key initiatives this year is to facilitate a bipartisan discussion about how we can create a workforce that is inclusive.
Prioritizing diversity, equity and inclusion is sound fiscal policy and key to creating sustainable economic growth. A 2019 McKinsey study concluded that addressing racial economic disparities and closing the racial wealth gap can help grow our economy by $1 trillion to $1.5 trillion, or increase GDP by 4 to 6 points by 2028. As this research shows, there is a direct correlation between diverse investment talent and enhanced performance.
Diversity leads to better investment returns, improved business strategies and stronger organizations as a whole. NAST, one of the nation’s foremost authorities in creating responsible state treasury programs, recently created a bipartisan Special Committee on Diversity, Equity, and Inclusion to discuss how we can plan for the future of the public finance workforce.
Creating a more diverse public finance workforce is imperative. The NAST Public Finance Workforce Study released last fall confirmed that the sector, like many others in state and local government, will face serious workforce shortages. With these findings in mind, state treasurers and public finance officers, like me, must prepare for the “silver tsunami”, as many public sector employees become eligible for retirement. This retirement wave is projected to peak this summer in my home state of Connecticut when close to a quarter of the state’s total public workforce—roughly 13,000 employees—will be eligible for retirement. While daunting, it gives us the opportunity to diversify our state workforce and hire people who more closely represent the diverse communities we serve.
The Public Finance Workforce Study shows that while the public finance field is more diverse than the U.S. finance private sector workforce, we can and should do better. Out of the 850,000-plus Americans working in the public finance sector, 15% are African American. In the private sector finance field, the number of African Americans is less than 11%.
Similarly, when it comes to gender diversity, the number of women working in finance in the public sector is 5% higher than in the private sector. Meanwhile, the study reflects that Hispanic individuals are statistically underemployed in public finance relative to the national average.
In addition to increasing racial diversity within the public finance sector, we must also work to increase diversity when it comes to gender, ethnicity, national origin, culture, age, sexual orientation, subject-matter expertise and more. Diversity of thought, perspective and lived experiences leads to enhanced performance that benefits the work in the long run.
At NAST, we are working on following up on the study’s findings by providing resources for more than 11,000 state treasury and network employees across the country. The findings will help us improve training, recruitment and retention in the public finance sector, and provide better benefits, services and training going forward.
For years, NAST has been a leader in creating opportunities for people and economic growth. However, being able to reach a consensus in acknowledging that we have a problem with workforce shortages and building bipartisan support to make progress on diversity, equity and inclusion in the public finance field, is a significant step forward in creating solutions for this challenge. Our newly minted Special Committee on Diversity, Equity and Inclusion is ready for this challenge and will take our ongoing conversations to the next level of effective action.
I look forward to working with my fellow NAST members and other public sector leaders as we combine our diverse perspectives and backgrounds to develop plans to meet the unique needs of our states and communities. With this focus, we hope to position the public finance sector as a leader in diversity hiring efforts. By strategically engaging those in the labor force that we may have overlooked in the past, we can unlock the doors to provide rewarding careers in the public sector, while also generating more opportunities for economic growth and financial stability.
Shawn T. Wooden is the Connecticut state treasurer and president of the National Association of State Treasurers. He is the only Black elected state treasurer in the country and the only Black official elected statewide in New England.
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