By Louise Anderson and Eli Dile, International Economic Development Council
Since the Great Recession ended in 2009, the United States has experienced one of the longest economic growth cycles in its history. Yet for many Americans, the years since have not been kind. In communities across the country, some residents are thriving while others experience declining household incomes, low labor force participation and increasingly concentrated poverty, trends that often have been in place for years. Individuals may face barriers to prosperity due to low education and skill levels, lack of transportation or child care, persistent discrimination, or other reasons.
The issue of economic opportunity is one of increasing concern to economic developers, both because it hinders their ability to improve their economies and because they have an important role to play in potential solutions.
IEDC and its Economic Development Research Partners program have taken on this issue in a new research paper, “Opportunity for All: Strategies for Inclusive Economic Development” (PDF). Released at IEDC’s 2016 Annual Conference in Cleveland last month, the report explores evidence and consequences of economic inequality, defines “inclusive economic development,” and contains nine case studies showcasing EDO-led programs that are promoting opportunity in their communities. Complementing the release of the report was a full slate of breakout sessions and keynote speakers that both underscored what is at stake and discussed best practices.
A moral and economic imperative
“It’s not just inequality. In and of itself, inequality is something you expect,” said Angela Glover Blackwell at Monday’s plenary session. Glover Blackwell is CEO of PolicyLink, an Oakland, California-based nonprofit that researches and advocates for economic and social equality. “It is toxic inequality that has hollowed out the middle class and is stalling economic mobility.”
If the United States achieved equality in wages for women and minorities, she explained, GDP would be $2.1 trillion higher. In Cleveland alone, this would amount to $13 billion. Therefore, Glover Blackwell concluded, “Equity is the superior growth model.”
She also cited a study by the Federal Reserve Bank of Cleveland which found that a 10 percent decrease in inequality would lead to a 50 percent increase in economic growth for the region. She mentioned Cleveland’s Evergreen Cooperatives as a promising local program for other communities to emulate. (More information on the Evergreen Cooperatives is included in the case study section of the report.)
Economic developers: The “face of opportunity”
“Often, economic growth is confused with economic development. Growth and disparity can coexist. Do our strategies target the full spectrum of residents?”asked Anne Roise, CEcD, MCP, of Savannah State University, who moderated a session titled “Addressing Economic Inequalities in Your Community.”
“If we don’t close that gap, there are going to be significant ramifications. And there already have been ramifications,” said Jonathan Morgan of the University of North Carolina-Chapel Hill, citing unrest in suburban St. Louis, Baltimore, and most recently in Charlotte. Morgan went on to discuss some equity-centric policies that are gaining traction, such as community benefits agreements, local minimum wage ordinances, and local- and minority-owned business contracting quotas for governments and anchor institutions.
Clarence Anthony was one of those minority business owners who got a leg up from municipal contracting policies. Now the executive director of the National League of Cities, Anthony reminded economic developers at Monday’s plenary session of the immense influence they hold over the lives of millions of people.
“Parts of our cities are not living the American dream. You are the face of opportunity in cities throughout America,” Anthony said.
King County, Washington, is one place that has embedded equity throughout its governing structure. It is guided by the King County Equity and Social Justice Strategic Plan, a six-year plan that has led to demonstrable outcomes. For example, to encourage upward mobility, the county mandates that its lowest-paid public employees attend professional development courses. Matias Valenzuela, director of the county’s Office of Equity and Social Justice, explained that by explicitly laying out goals and objectives, the plan influences public spending decisions by giving the county’s budget committee a compass by which to operate. Another new policy inspired by the plan is ORCA LIFT, a reduced-fare program for Seattle’s low-income bus riders.
“Be explicit about making it a priority,” Jonathan Morgan said. “Embed it deep in your work. Without that, it’s not likely to happen.”
“Opportunity for All” was presented to a standing-room-only crowd. The session featured a panel of representatives from five of the EDOs featured in the report’s case studies. The session led to a lively discussion on what others are doing to fight inequality in their communities. One common challenge expressed by attendees was a lack of “soft skills;” many unemployed and underemployed individuals lack basic knowledge of what to wear to an interview or how to behave in the workplace. This was one priority item all EDOs should have on their radar screens, attendees agreed.
Though every community faces unique equity challenges, the paper identifies several things that economic developers can do to help:
- Understand the state of economic inclusion in your community.
- Focus on the business case and economic impact of inclusion.
- Tie inclusion initiatives to growing sectors, clusters or industries.
- Involve target populations, when appropriate, in the research and planning of inclusion initiatives.
- Harness the purchasing and employment power of anchor institutions.
- Examine the state of inclusion within your own organization.
- Take a broad look at the work that needs to be done.
- Accept the charge of convener, catalyst or gap-filler when appropriate.
In sum, the economic development profession now faces a new challenge: Disparity in incomes and opportunity is rising, and not only does it harm the quality of life for many of our communities’ residents, but it is increasingly recognized as harming the economy as well. The goal of “Opportunity for All” is to provide practical information to economic developers by offering a snapshot of a range of initiatives, across different community sizes and locations, that public and private EDOs have undertaken.
Ultimately, to bring economic opportunity to all, economic developers must continue to “learn from others – innovate, be creative, and take risks,” said Jonathan Morgan. “And don’t forget to measure results.”