Robert Johnson, founder of RLJ Companies is the first African-American billionaire. We also know him as the founder of Black Entertainment Television, but since selling that company to Viacom in 2000, he has become a powerhouse in the business community. In addition to being the first Black owner of a Major League sports franchise, the Charlotte Bobcats, his RLJ Companies have interests in entertainment, financial services and real estate, just to name a few. Today, he is using this power to engage the business community in a plan to — to decrease the Black unemployment rate, but also increase the presence of African-Americans in corporate America.
Big news on Friday. The Labor Department reported that the unemployment rate dropped four tenths of 1 percent to 8.6 percent. 140,000 private-sector jobs were created in November. It’s a good number, but Black unemployment at 15.5 percent, up four tenths of 1 percent, continues to be disproportionately high. Joining me with a plan to address that disparity among other issues when it comes to jobs in corporate America is Robert Johnson, founder of RLJ Companies – Robert Johnson, of course, the first African-American billionaire. We also know him as the founder of Black Entertainment Television, but since selling that company to Viacom in 2000, he has become a powerhouse in the business community. In addition to being the first Black owner of a Major League sports franchise, the Charlotte Bobcats, his RLJ Companies have interests in entertainment, financial services and real estate, just to name a few. Today, he is using this power to engage the business community in a plan to – to decrease the Black unemployment rate, but also increase the presence of African-Americans in corporate America.
Bob, welcome to “Washington Watch.”
MR. ROBERT JOHNSON: Roland, thanks a lot. Glad to be here.
MR. MARTIN: First of all, le- — let’s first deal with the – the unemployment rate.
MR. JOHNSON: Um-hum?
MR. MARTIN: You’re one of the folks Republicans love talking about – “job creator.”
MR. JOHNSON: Yeah.
MR. MARTIN: What do you make of the unemployment rate going down, but we also see when we look at it people stepping out of the labor market, starting businesses at home, realizing that this whole economy is changing?
MR. JOHNSON: Yeah, I think that’s the point – that the corporate structure in the United States is looking at the global situation. Many jobs are going overseas. There’re structural changes in the types of jobs that – that are being created: more professional management, more professional technicians. And African-Americans who are not positioned, or not in the pipeline to receive those jobs, are not being considered. So, with the flow of jobs overseas, changing in the economic structure of the United States, it’s exacerbating the already disproportionate jobless rate between White Americans and African-Americans; and unless we do something to address this, Roland, we will have a situation where minorities are principally consumers and not creators of wealth and creating a problem where people who don’t want to write entitlement ta- — checks to support minorities who are not productive begin to create this kind of tension we have already between the Republican Party and the Democratic Party, based on haves and have-nots.
MR. MARTIN: So, as we sit in the nation’s capital, and we have this – all this political bickering, you’re constantly hearing Republicans say, “Mr. President, what are you doing to create jobs?” Look, you hire people. You buy businesses. You start them. You invest in them. Can government actually create jobs?
MR. JOHNSON: No. Government can create an environment for jobs to be created. Government can create work. I mean a construction project. Infrastructure projects by the –
MR. MARTIN: Right.
MR. JOHNSON: — government can be stimulated by government expenditure. But a job is really long-term productivity, long-term security, an ability to move up within the employment structure. Those things come out of the private sector, both small businesses and large businesses. Government has to create that kind of stable environment to do that.
What I’ve been focusing on is something I call the “RLJ Rule,” which was based – if you reme- — know, in the football league – the National –
MR. MARTIN: The NFL.
MR. JOHNSON: — Football League – the NFL has the Rooney Rule. [The] Rooney Rule simply said before you interview a Whi- — a coach in a vacancy –
MR. MARTIN: For general –
MR. JOHNSON: — for general –
MR. MARTIN: — manager –
MR. JOHNSON: — manager –
MR. MARTIN: — or higher-up positions –
MR. JOHNSON: — you must interview a qualified minority candi- —
MR. MARTIN: — at least one.
MR. JOHNSON: — -date. At least one. The result of that changed the numbers in 2003 from three, Black coaches to eight now and five GMs – and, of course, two of those coaches, Lovie Smith and Tony Dungy, took teams to the Super Bowl.
MR. MARTIN: And Mike Tomlin –
MR. JOHNSON: And Mike –
MR. MARTIN: — as well –
MR. JOHNSON: — Tomlin –
MR. MARTIN: — and won.
MR. JOHNSON: — and – right. Right – and won.
And so, to me, if – you can do that in corporate America. So, what I’ve done is what I call the “RLJ Rule.” It’s simply this: before you hire a vice president candidate or above, you must interview two, qualified, minority candidates for that position; and before you issue a new contract that a minority supplier could be considered for, you must – “must” being voluntary – you must interview two, minority contractors for that job before you let that contract.
The whole idea is enhanced best practices. The NFL rule has a fine. We’re asking companies to engage in enhanced best practices, so it’s voluntary.
MR. MARTIN: What has been the response?
MR. JOHNSON: I’ve gotten great response. I’ve – I got a great response from Dupont. I’ve got a great response from Comcast. I’ve got a great response from a company called Strayer, which is a – a for-profit education company. I’m – and I’m hoping to get a full endorsement from the Congressional Black Caucus; and I’m hoping that the President’s Jobs Council will endorse this, because this is something that’s so important to close that gap, because that gap from eight to six- — 15 or 16 – it’s probably higher than that – is not just blue-collar workers. That means a lot of African-Americans walking around and [with] MBAs and college degrees [who] are not working either. And it also means that there’re not a lot of African-Americans in the decision-making pipeline that can cause procurement jobs to go to minority businesses, or to cause minorities to be considered when jobs come open – because they’re not in the pipeline of decision-making.
MR. MARTIN: It’s sort of – look. I look at the criticism that I and others have made when it comes to broadcast networks, as well as cable news networks, when you g- — la- — lack of African-Americans who are in executive positions, but al- — also on-air hosts. When you talk about wealth creation, same thing. If you’re in a position where you have one of those contracts that’s a four-year, $28-million contract, you’re able to create wealth, pass it on to children, also be able to acquire other businesses with the amount of money that you make. But when Black folks are only at those 100,000, $150,000 jobs, you’re never going – going to get to that position to be able to do that –
MR. JOHNSON: You know, Roland –
MR. MARTIN: — and then become a CEO.
MR. JOHNSON: — you’re absolutely right, because here – here’s the thing that people should understand. If small businesses create most of the jobs – and I believe they do – then if sm- — if Black businesses were created, and most people who start business[es] hire people they know and like in the neighborhood, then you create more Black employment by creating more Black businesses.
And, to me, if I were focusing on how to decrease the Black unemployment rate? Create more small, minority-owned businesses.
MR. MARTIN: But you’re also talk about the opportunities, and – and the gentleman who is running your hotel piece, if you will, [was] working for corporate America, wasn’t considered for the top job.
MR. JOHNSON: Yeah.
MR. MARTIN: But then all of a sudden, now he’s running more than a billion-dollar entity. Just tell our li- —
MR. JOHNSON: You’re –
MR. MARTIN: — viewers about –
MR. JOHNSON: — you’re – you’re –
MR. MARTIN: — about him.
MR. JOHNSON: — you’re talking about Tom Baltimore. Tom Baltimore was a senior vice president at Hilton Hotels when I was on the board. I started buying hotels with my own money. Tom came to me and said, “Bob, I’d like to be your partner in this business.” I brought him on. We started a hotel private equity fund. I started buying hotels, and then we decided to take that hotel company public.
Tom Baltimore now is heading up a $3 billion hotel re- — publicly traded company on the New York Stock Exchange. Ask anybody in the hotel industry, whether it’s the guys at Marriott, the guys [at] Hilton. This guy is considered one of the best and brightest CEOs in the hotel space.
MR. MARTIN: But wouldn’t get a shot –
MR. JOHNSON: Wou- —
MR. MARTIN: — anywhere else.
MR. JOHNSON: — was never on the short list to be the CEO at Hilton, or the short list to be the CEO at Marriott. By giving him a chance, by giving him an opportunity, I’ve now created a wealth creator, a job creator, and a visible role model to African-Americans who’re looking at opportunities to head publicly traded companies.
MR. MARTIN: Well, Bob, I certainly want to see more of us in jobs in corporate America and getting jobs as a whole, so I certainly appreciate what you’re doing with the RLJ Rule.