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Dear Fellow
Shareholders:
The six months ended January 31, 2010, saw a steadier
economic scene and brought some relief to stock markets around the world. In
many ways the U.S. economy seems to be expanding.
Of course, this is the report of Wall Street. As
investors, we are enjoying stronger returns than we have seen in some time.
But on Main Street, unemployment and the income gap between most Americans
and the top earners has left a bitter taste in the mouths of most.
As of December, the U.S. unemployment rate stood at 10%.
That’s bad enough, but a closer look shows that the worst of the pain was
being suffered by those who are already disadvantaged.
When American households are divided into ten groups based
on their household income, we find that the top group, with household incomes
of $150,000 or more, had an unemployment rate in the fourth quarter of only
3.2%. The lowest group, with household incomes of $12,499 or less, had an
unemployment rate of 30.8% — reportedly more than five percentage points
higher than the overall rate during the worst of the Great Depression.
Who are those hardest-hit? Younger workers with less
education, including African American and Latino high school dropouts,
service workers such as food preparers and building cleaners, and blue-collar
workers — especially those in construction.
One apparent ray of light concerns female workers. The
number of women working is now on the verge of exceeding the number of men.
Women have a strong advantage in education, too. By age 22, the Bureau of Labor
Statistics tells us, there are 185 female college graduates for every 100
men.
Women make up a larger percentage of the “caring” jobs in
education, healthcare, and not-for-profit work, and those areas have held up better
than traditionally male jobs like construction and manufacturing.
Unfortunately, these caring jobs pay relatively poorly.
Many women work not because they want to but because one income is no longer
enough to provide a household with a middle-class lifestyle. And the
significant representation of women in the workforce is not reflected in
leadership opportunities at the top.
In 2009, women
held only 15.2% of board seats at Fortune 500 companies. Sixty-one Fortune
500 companies still do not have a single woman on their boards.
Later in this
report, we take a look at the question of diversity on corporate boards: the
benefits it offers, and progress made by companies around the world. Though
the U.S. lags behind Europe on board diversity, new SEC regulations may help
prod American companies to do better.
Changing
demographics, however, may do more than regulation to improve diversity and
opportunity not just in the boardroom but throughout the workforce. America
is becoming more diverse, and younger people are more welcoming of diversity
than ever.
In America, the Millennium Generation, roughly defined as
those born to baby boomers, will be the most diverse generation the nation
has ever seen. Sixty million people born between 1978 and 1994 are in their productive earning years, or soon will
be.
During the past
eighteen months we have seen the rise of a new, more tolerant generation. They
turned out in force to campaign for an African American President. On the
issue of marriage rights for gays and lesbians, they have declared, “Why
not?”
The changing
demographics of America are a reality that the halls of power and the corner
offices of corporations have not yet caught up with. Those that do will open
their doors to new thinking and new points of view, and benefits not just for
women and minorities but for all.
As socially
responsible investors we can do our part to help ensure that corporations
respond to their stakeholders and take advantage of the best talent and the
best ideas available. Your investments in the Domini Funds help make that
happen.
Very truly yours,
Amy Domini
amy@domini.com
1046
09252
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