Economic justice

Understanding “Economic Justice” with Max Vargas of the 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 is a longtime 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 appointed Director of Economic Justice at the Latino Community Foundation, about plans for his work at LCF. This interview has been edited for clarity.

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

When we look at economic justice, we think about making sure people have real opportunities, real access, real outcomes containing economic mobility, economic prosperity. And on the justice front, that we are moving away from systems that have been predatory on the one hand, excluding to a large extent [and] lead them not only to be inclusive in their practice, but in their results. For example, the Latino community, which is such an important community for everyone, for the economy. When we talk about essential workers, we are, in many ways, talking about a long-standing injustice in that a community has to work harder for itself at much greater risk and still faces a significant lag in the wealth gap, the wage gap, and in overall prosperity. So I think that’s kind of where the root of the injustice is.

Since the 1960s and onwards, every economic crisis that has befallen the city, be it inflation, the bursting of the real estate bubble or the recession, the always disproportionate fallout has affected the Latino community. I think when it comes to equitable economic policies, it’s really about reaching our community where the need is greatest, where there’s historically been less resources, less investment, even divestment in the past, and to find ways to take advantage of these opportunities.

There is this phrase that “talent and intellect are universal, but resources and opportunities are not” and have not been. Equitable policies compensate for this. They provide more to account for this difference.

Could you give me a specific example of fair economic policy?

We have seen over the past year efforts have been made during the pandemic to support small businesses. It is a noble effort. Small businesses needed help, but what happened was that the dollars didn’t reach the very small businesses, the smaller businesses had no way to actually access those dollars. Communities of color and the Latino community have been disproportionately excluded from these funds. Even though the spirit of the program was well intentioned, tactically it didn’t apply that way because the barriers were too high.


The fair approach would have been to actually fund and support those dollars that make it to the smallest organizations and not require the most established and largest budgets for corporations to qualify. Frankly, even looking at vehicles outside of some of these entities and finding ways to fund CDFIs, community development financial institutions. It is a type of vehicle where CDFIs are designed to support businesses that are so small or so new or not as professionalized as others who otherwise would not get the loan or access that a large business could obtain with a traditional loan in a traditional bank.

Businesses that are often left out are micro-entrepreneurs and street vendors, who may face more loan problems, may not be as liquid, they may not have seasoned an established banking relationship with loans traditional. There are other models in different economic policy spaces that can be linked to how we manage to empower workers in the economy.

There has been a lot of news lately about organizing efforts in different industries and different companies. This is an example of workers coming together to fight for their own fairness. There are models where this is less of an issue; some innovative approaches where people push for worker-owned co-ops. The workers actually own the means of production and own the company. There is 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 business. There is not this point of tension, but there is a real gain on both fronts.

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

To me, they underscore the fact that we have a Latino community that is so motivated to be active, to be engaged, to start a business. It’s a very entrepreneurial community. There are all these efforts that are there and the question is how do we ensure that we provide the necessary supports and investments, at the very grassroots level, at the community level, at the neighborhood level, that is to say say [going to] reach them and be worthy of the work they are already doing? Because they work very hard, contribute a lot, they pay taxes, they are essential workers. That they are the reason the economy is doing well is one thing, but the economy should be the reason they are doing well.

I even think of my own personal story as an immigrant myself. When I think of people like me and my family and the sacrifices that so many have had to make, that we stand on so many shoulders and wonder to what end? How do you make sure that all of those sacrifices are honored and that you shape the system so that there aren’t systems that dishonor all that hard work and dishonor all that passion?

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

I was born in Lima, Peru and emigrated when I was five years old. In fact, I was an unaccompanied minor. We were fleeing Peru, as today many families in Central America are fleeing violence and danger. We were running back then [of] terrorism and coup attempts in Peru, not to mention the severe economic instability. We were lucky to get political asylum, [then later] residency, and possibly citizenship. I know it’s not a path that everyone has access to; not everyone has this advantage. I would say that if I had applied for asylum four years ago or less, I know that I probably would not have obtained it, and we would be in a different situation. I’m sharing this only to say I got lucky.

From this experience, I learned that I was unaccompanied but not alone.

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I had family that I was able to reconnect with and eventually our family was reunited. When we arrived there were programs, community 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 designed. The reason why we have certain things in certain countries and not in other countries. Or in a postal code in a city and not in another postal 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 effects of rising costs, whether it’s gas, food, housing, etc. From what you’ve heard, what are the biggest challenges for our Latinx communities here in the Bay Area?

Location matters. The Bay Area was already a higher cost of living area. You add to that the fact that a lot of our Latinx communities play different roles and do different jobs, but there are a lot of Latinos who are also in the service industry. Some of this work is one of the highest skilled jobs, but it is not the highest paying job. The Latino community already bears a lot of costs in the Bay Area, and even faces the cost of having to be evicted from the Bay Area due to housing, rising housing and rental costs.

On top of that, a significant portion of the Latino community as a whole is unbanked or underbanked. In many cases this means they can have more money, not putting their money to work for them. Maybe that means money under the mattress or money stored somewhere at home, like a rainy day fund that is depreciating as we speak. The price of commodities, everything, goes up, and the value of those dollars that’s left there goes down. Those dollars are losing value as we speak, as the economy begins to recover for some communities more than others.

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

We just announced that we will be supporting a number of organizations across the state that are serious about leveraging federal investments. The US bailout is fast and it’s a $1.9 trillion US bailout. We talk about how it actually reaches communities, as I mentioned in an earlier example of the P3 program. Some of those dollars won’t go into the community unless we’re very intentional about this work.

We funded $1.4 million in grants [to] 35 Latino-led organizations across the state to ensure there is equitable distribution and implementation of these federal funds. Several organizations in the Bay Area, Silicon Valley, Northern California and Central Valley, as well as across the state, receive funds from this award. It is a system-level approach we take to support grassroots organizations [and] community organizations in communities across the state so that communities are not left out of this upcoming awards list. The next tranche of money comes from the federal government. Like I said, it’s actually their money, it’s money they contribute. It’s money we all pay through taxes [from our] work. It’s money that the Latino community should take advantage of so that there are programs and investments that actually reach them and 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, those who stayed in the workforce were essential workers. It was a double whammy to tackle these issues through local level investments. As part of the economic justice portfolio that I lead, I am very interested in how we ensure that the long-term wealth gap for Latinos is closed.