We talked to JPMorgan CEO Jamie Dimon about the bank's $20 billion investment in the US, the economy, and why he won't run for office

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We talked to JPMorgan CEO Jamie Dimon about the bank's $20 billion investment in the US, the economy, and why he won't run for office

FILE PHOTO: Jamie Dimon, Chairman and CEO of JPMorgan Chase & Co. speaks during the Milken Institute Global Conference in Beverly Hills, California, U.S. on May 1, 2017. REUTERS/Mike Blake/File Photo

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Jamie Dimon speaks during the Milken Institute Global Conference in Beverly Hills California

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  • Business Insider caught up with the JPMorgan Chase CEO in the South Bronx on Tuesday, where the bank was announcing the expansion of its Entrepreneurs of Color Fund.
  • We asked him about inflation concerns, the bank's five year, $20 billion dollar investment in the US, and its healthcare initiative with Amazon and Berkshire Hathaway.
  • He also talked about the role corporations have to play in their communities, saying that "as long as we're doing [...] well we always participate in the community, just like if you owned a corner bakery store, you would participate in the community."
  • We also asked him why he's said he won't run for office. "I just don't think it's my nature," he said. "It's not what I've been trained to do, I've never run for office, I've never thought of things like that, so I think you have to be a sort of kind of person to be a politician."


Jamie Dimon's pleased with the economic progress the US has made in recent months. But there's still more to do.

Business Insider caught up with the JPMorgan Chase CEO in the South Bronx on Tuesday, where the bank was announcing the expansion of its Entrepreneurs of Color Fund. He talked about the fund, JPMorgan's big bet on brick-and-mortar bank branches, and wages. The bank in January announced it was raising wages for 22,000 US employees who work in its branches and customer-service centers, as part of a $20 billion investment in its US business.

He also discussed the US economy, highlighting faster-than-expected growth and rising wages. But he said there's still a lot more to do, especially around infrastructure and education.

"America is still the greatest country on the planet," he said. "You know I get to travel the world and see all that. That does not mean we don't have some serious issues we have to fix.

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The following is a lightly edited transcript of the conversation.

Matt Turner: You're here to announce funding for an Entrepreneurs of Color Fund here in The South Bronx. Why are these schemes so necessary, do you think?

Jamie Dimon: So, we started this when we went to Detroit, and we were trying to help the city of Detroit. And when you look at what cities need, affordable housing, jobs, work skills, my wife is working hard on work skills under a foundation called Here to Here.

But obviously one of the things is to get small businesses up and running and vibrant. So, a lot of minority entrepreneurs don't have the back up money they need. And sometimes you get a city contract, you get a special kind of loan, to help them grow and to come and grow locally. So, hopefully this funding here will kind of start the process and help accelerate local lending.

Turner: We sat down not far from here in May in The South Bronx when you announced some funding for a skills initiative. A lot has changed since May. What has has changed for the better in that time, do you think?

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Dimon: We went to the Alfred E. Smith School and I hope that people watch it. There are some great schools teaching kids great things, they have jobs when they get out earning $40,000-$60,000 a year.

Jamie Dimon

Business Insider

Dimon at the Alfred E. Smith School in the South Bronx

So since we last met I guess in May, the global economy has been growing faster than people thought. The American economy has been growing faster than people thought. That's a good thing. And it's hopefully leading to wage increases and obviously jobs. I think it's going to entice more people back in the workforce. So I'm a little, people worry about too much low unemployment, I think it's good if you get more people working, I think it's a good thing.

Turner: And what hasn't changed? What are the areas where there's much still more work to do?

Dimon: Well I think, that's a big question. America is still the greatest country on the planet. You know I get to travel the world and see all that. That does not mean we don't have some serious issues we have to fix. And those issues are around infrastructure, we're unable as a community anymore to actually build proper infrastructure on a timely basis.

You know there's a bridge that connects Staten Island to New Jersey, it took twelve years to get the permits, and there's already an existing bridge which could've fallen down and hurt people. So infrastructure, education, I think competitive global taxation was important to get it done. You know, proper regulation.

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If you look at a lot of regulations, we get scored by the OECD, we've gone from being the least bureaucratic nation to one of the most bureaucratic nations. It stifles small business formation. That's one thing. So if you at small business formation, it's lower than it's been in any other recovery. So I think a lot of these things hold back American growth, they've held back wages, they've held back jobs, they've held back incomes. And we have to ignite that to get things going again.

Turner: JPMorgan recently announced a five year, $20 billion dollar investment in the US. Can you just talk me through the thinking behind that? What led to that?

Dimon: So we said when tax reform is gonna happen, it is gonna increase the after-tax profits of US-based companies. It's gonna bring a lot of capital back to the United States, which is a absolutely fabulous thing regardless of how that capital gets used. But we were thinking about what can we do to accelerate growth, both because of tax reform and regulatory reform, and we actually asked all of our people. It wasn't like I did it myself.

Everday Express branch JPMorgan Chase

JPMorgan Chase

We're gonna do more affordable housing. We're gonna do more lending, little incremental lending, in LMI [lower and middle-income] neighborhoods and mortgages. So making more mortgage to people, so make housing affordable to people. Small business initiatives. So this small business initiative is one of the ones we're doing. We're announcing today in San Francisco, we've tripled the one we're doing in Detroit. If these things work we might actually do more. So there are more work-skill initiatives.

You know we have this thing called The Fellowship Initiative, we get kind of troubled minority kids in high school who may not get through and we wanna get them through, give them a job, get them training, get them into college, and get them through college. And so now we're doing maybe 120 a year of that. So to the extent we can use some of this to help society, we wanna do it.

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We also very importantly increased wages, minimum wages, in the major cities to $18 an hour. That's $36,000 a year. And remember our folks already get medical, full medical, full dental, pension, 401k. So we try to take care of our people. And we also reduced the deductible for lower-paid employees, those making less than $60,000 a year, because we did all this research and the people don't have the wherewithal to take care of a problem.

That problem could be your car needs to be fixed, but it also very often is medical. And so if you do your wellness stuff now, if you take care of yourself, if you don't smoke, we give you kind of benefits and the deductible effectively goes to zero. So we've kind of really made it easier for folks to get proper medical care.

Turner: In terms of the tax reform and regulatory reform, what was holding you back from doing that before, that investment? Is it that tax reform accelerated it and it was something you would've done eventually?

Dimon: We announced opening 400 branches and the regulators, the regulators weren't actually asking banks to expand. They wanted banks almost not to expand, and therefore, with some regulatory reform, with tax reform, it gives you a lot of reason to say, 'You know what, let's be more ambitious and aggressive when growing.'

Boston Celtics fans

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So we announced we're gonna be opening 400 branches in cities we're not in, like Washington D.C. and Philadelphia and Boston. And when we go into a city, remember, we come in just like you saw here. It's not just that we have a branch, but we have small business lenders there, we usually do philanthropy there, we usually have middle-market companies, private banking, credit card, mortgages, LMI [lower and middle-income]. We put branches in LMI neighborhoods. So expansion's a good thing and we're gonna hopefully expand more in America.

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Turner: You mentioned wages. You chose to do hourly wage increase as opposed to the one-time bonuses a lot of other companies did. So what was your thinking behind that and doing it that way?

Dimon: We already had a one-time bonus. Years ago we put in place, we'd ask how many people don't put money into a 401k and therefore don't get the match. It was surprising, something like 40,000-50,000 people. And they don't do it because they couldn't afford it. It wasn't because they didn't want the match. So when we found out that many, many years ago we started making contributions in their 401k. Again folks making under $60,000 dollars a year. So we're looking at more permanent wages and things that we could afford to do. And remember that opening those 400 branches is also 5,000 jobs.

Turner: I wanted to come to the branches in a moment. Just on the inflation aspect, because you mentioned it a moment ago, the market correction that we had last week was at least triggered by fears around inflation and wage growth that was higher than expected. How much of a concern should that be going forward?

Dimon: If you'd asked me in May I would've told you that, sometime down the road, if we're going a little bit faster than we think, people are gonna be afraid of wages and inflation. And it's kind of so predictable, okay? So the important thing is the higher growth.

wall street trader sad

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You know, now you're climbing the wall of worry. Okay, we have higher growth, wages may be going up, we all wanted it, but the flip side of that is that interest rates may go up and inflation may be a little higher than people think. I think the job growth and the employment growth is more important than that. Of course the markets always readjust to changing expectations, and now the expectations change. You also have central banks reversing the purchase of bonds and those are legitimate concerns but again if you have jobs and wages that's more important.

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Turner: And in terms of the speed and severity of the correction last week was that a concern for you?

Dimon: No.

Turner: Do you just think that's perfectly normal?

Dimon: I know it will shock your public. I spend almost no time worrying about something like that. We serve clients, markets fluctuate. Markets will always fluctuate. Markets have always fluctuated. You know, to me, again, the important thing's the economy. You know if you add inflation and then growth is declining, yeah then you should be much more worried. But it's not about the stock market, it's about the people and their jobs.

Turner: You mentioned the branches. You're opening in 400 new locations. What was the thinking there? That seems like a contrarian bet when a lot of other people are closing branches right now. So what was the thinking there and what will those branches allow you to do going forward?

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Dimon: Branches are still critical to business, okay? Remember, this may be surprising to some but the average branch, 25% of the business is small businesses, literally from the immediate community, who need access to a branch, cash, currency, checks, et cetera.

The branches are getting smaller so the nature of branch is changing. The amount of tellers is coming down so the operational nature is changing. But you have more mortgage loan officers, more small business officers, more investment officers, helping people. So yeah, branches are important to opening accounts. Those are important to serving governments. If you can't take deposits locally, generally you can't serve the government locally, by law.

They're important to middle-market customers. They like to have a branch there for their employees and stuff like that. So, they're still a critical part. These branches we're talking about are in cities where we are not. So we're kind of, you know, we're expanding our wings a little bit and going to places we are not.

Turner: And you mentioned healthcare. JP Morgan's announced an initiative with Amazon and Berkshire Hathaway. How did that come about and what are you hoping to achieve there?

Dimon: Look, America has an issue, okay? We spend 17% of our GDP in healthcare. You know we have the best of all worlds, some of the best healthcare in the world. And the worst of all worlds. We don't do very good preventive medicine. It cost too much. Warren Buffett calls it the tapeworm of Corporate America.

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Jeff Bezos Amazon

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Going into deductibles was important to get you to shop a little bit but hasn't really worked really well. So I tell people, JP Morgan Chase already buys a billion and half dollars of medical, and we're self insured. Think of this, we're already the insurance company, we're already making these decisions, and we simply wanna do a better job.

And in conversation with Warren, and someone who works for him called Todd Combs, who's one of my board members, who's exceptional, and Jeff Bezos, we said we know we can do more. We know we can do more just thinking through every single part of it. Both the customer-facing part so you might be able to get look at more data on your phone and stuff like that, getting you do wellness.

I mean 20% of our medical expense is at end of life and a lot of people don't wanna go through it, they go through it in a hospital. So maybe we need a legal change of that. A lot of people over-utilize certain medicines, but they also under-utilize it. And, it's also silly they have no wellness. Like if you take care of yourself, I think smoking and obesity, I forgot the number, account for 25% of all medical expenses. Well that's us!

So you know, there are ways that when you face this maybe we can change things to make it much better for everybody. We want happier employees, better medical outcomes, and I do think at the end of the day that'll actually be cheaper.

Turner: There's a lot of talk right now about the role that corporations have to play in their communities, their responsibility to stakeholders beyond just shareholders, and to quote Larry Fink, the need for corporations to benefit society in some way. In what way are businesses stepping up? I know about JPMorgan's efforts here, but more broadly in the conversations you have with CEOs elsewhere, how are they stepping up?

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Dimon: I think honestly these big companies have been doing this my whole lifetime. So I remember I worked at American Express when I was 26 years old, and all these companies take care of their people, they educate their people, they've been philanthropic.

If you go to back to Chase and JPMorgan, you know 50 years ago they were among the first to do things like that, and to support medical benefits for employees, the first to support medical benefits for gay partners, those are wonderful things. So of course you want to be a good community citizen.

And so I think all the companies do it, I don't know any big company who isn't pretty extensively involved in communities. They all do it their own way. We're experts in financing and affordable housing and things like that, but other companies are experts in technologies or drugs where they can bring different things to the population. I'm the Chairman of the Business Roundtable, and there's booklet we put out about all the things companies do on work skills initiatives, technology initiatives, and it's pretty extensive.

Turner: Is there a perception gap there then? Just earlier Bronx Borough President Ruben Diaz said he wishes that what JPMorgan here was doing was contagious.

Dimon: Yeah. I think he means here. I think he means right here in the South Bronx, and sometimes, you know one company can accelerate something in one place and yes, yes we should do that.

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So I've never been conflicted between shareholder value, being a good community citizen, and I tell people if I don't run a good, healthy, vibrant company, all other bets are off. I mean that is the number one thing. And that is the number one thing we do even here. Small business, consumers, loans, we finance companies and I have to do that well.

But as long as we're doing that well we always participate in the community, just like if you owned a corner bakery store, you would participate in the community. You know, you might help your local synagogue, your local church, your local mosque, you might help the local Little League team, you might employ a couple kids over the summer to help restock the store or repaint it, that's, we all do that. That's called humanity.

It shocks me that people think that's a surprise that we should do that. Of course there's some businesses out there who're rapacious and you know it's all about how much money you're gonna make but that's, people are that way. There are some people, that's the way they are. It's all about the money. But most big companies aren't quite that way.

Turner: And you've mentioned the need for infrastructure investment. You mentioned it again earlier. The administration has come out with it's plan, how confident are you that something gets done now?

Dimon: You know first of all, let's talk about how bad it's gotten. If you analyze American infrastructure we've gone from, I'm talking about 20 years ago, from among the best to among the worst of developed nations. And it's around regulations, bureaucracy, approval processes, financing processes.

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My God, how did we like get like that? America, the can do, wonderful nation of America? So we've got to fix it. It is a wide variety of things. So it's not just a budget, it's the permitting that needs to get done, its the regulations around it, it's all these various things. So it's a big deal.

Studies have come out that literally say we need, I forgot the number, $3 trillion? But if we don't do the $3 trillion it'll cost us more. Okay, it's costing us more. And then if you believe in, you know, carbon pollution, the FAA, we don't have the system most other countries have where your flights will be 20 minutes less, and CO2 pollution would be 20% less. We can't seem to have the political will to do that. I mean, shame on us.

Turner: You've said repeatedly you don't want to run for office. Why do you think the question keeps on coming up, and why are you so insistent that the answer is no, that you don't plan to?

Dimon: I see the question come up with hundreds of people. I have lots of friends where it's come up for them too, and look, I just don't think it's my nature. It's not what I've been trained to do, I've never run for office, I've never thought of things like that, so I think you have to be a sort of kind of person to be a politician.