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Economic Rejuvenation Rx: Skills + Equity

Neal Peirce / Jun 21 2013

For Release Sunday, June 23, 2013
© 2013 Washington Post Writers Group

Neal PeirceIf the national economy isn’t stimulating enough jobs for millions, how can mayors, business and other metro area leaders figure out routes to decent-paying jobs for more of their people?

A bunch of “scholars with a heart,” looking for the opportunities in a project on building resilient regions funded by the MacArthur Foundation, recently appeared at Washington’s Urban Institute to release papers focused on multiple regions’ economic challenges.

One key finding: Fairness, along with decent wage levels, pay off. People assume companies are drawn to regions where they can hire workers for low pay. (A prime example: call centers).

But California-based scholars Manuel Pastor and Christopher Benner, reported – based on U.S. and international surveys they’d conducted – that metro areas with higher income equality are more likely to sustain growth over time. Big pay inequalities, they noted, actually dampen growth while generating social tensions and suspicions.

In Chicago, there’s a new “Plan for Economic Growth and Jobs,” sparked by Mayor Rahm Emanuel and developed over five months by a steering committee of business, labor, civic and community leaders led by World Business Chicago. Its headline objectives, as you’d expect, include enhancing Chicago’s position as a key transportation hub, becoming a leading center of advanced manufacturing and a top exporter.

But what sets Chicago’s effort apart is how community grounded it is – all the way to a specific call to “develop and deploy neighborhood assets to align with regional growth.” Its steering committee isn’t just big business moguls, it’s also unions, civic leaders, educators and the Urban League, with a range of subcommittees including one on neighborhood assets co-chaired by a MacArthur Foundation vice president, Julia Stasch.

Several examples of economic strategy to benefit all economic groups are examined in a new Brookings Institution book, The Metropolitan Revolution, by Bruce Katz and Jennifer Bradley. The case studies range from Denver’s multiyear campaign to build support for regional rail to Northeast Ohio’s remarkable effort to pull all hands – including veteran industrial factory workers – on deck for a new generation of science-based development.

Also included is Houston’s remarkable Neighborhood Centers Inc. with its century-long history of providing services for immigrant and low-income families. Working in challenged neighborhoods, its leaders sees its mission akin to a “new Ellis Island” helping residents overcome obstacles and prepare a better life for their children.

And opportunities aren’t lost, even in today’s difficult economic times. Another new Brookings report trumpets the potential of high-tech “STEM” industries – based on science, technology, engineering and math. STEM opportunities abound in such fields as manufacturing, health care and construction, even for workers with less than college degrees, the report asserts.

Yet in too many regions the view of economic development is far too narrow, suggests Amy Liu, co-director (with Katz) of the Brookings Metropolitan Policy Program. “There’s frequently an addiction,” she notes, “to the wrong kind of growth – real estate, consumption, moving jobs around – and not enough on focusing on high-quality job growth that will lift boats, and create sustained economic activity.”

Leaders in Phoenix, for decades a poster child of the real estate-consumption model, are seeking to break old habits and shift to strategies they believe will grow the economic pie more sustainably. One key will be to tap skills not just in Arizona State University, the Phoenix area’s major educational institution, but in the region’s community colleges. The timing is critical, Liu suggests – for Phoenix to start moving up the value chain to embrace innovation and broad wage gains before real estate recovers from its recession lows and brings temptation to return to the old status quo.

What’s important, she adds, is to remember that metro areas “are at heart places of commerce,” that the central cities “are what makes regionalism happen,” and that forward-looking business-civic-government coalitions, keeping an eye on economic growth and shared opportunities, are all but indispensable for making the right decisions for peoples’ well-being.

New York City provides a key example. In 1977, President Jimmy Carter visited the South Bronx and viewed blocks of burned-out, abandoned buildings. But Mayor Ed Koch mounted a major subsidized housing program – eventually $5.1 billion for a quarter million units in such neighborhoods as the South Bronx, Bedford-Stuyvesant and Harlem. Nonprofit community based developers worked in partnership with the city, which was doing what virtually no other ever had: Use the city’s capital budget, through bonding, to pay the bill.

Hope returned, low-income New York stabilized, the city’s international star rose. All because a mayor – and then the city’s leaders, businesses and nonprofits – stepped in. If Philadelphia, Detroit, Baltimore, Newark and other hard-hit cities followed the same course, they’d be materially stronger today. Foresight – and equity – that’s the model.

(Note: Neal Peirce’s column will be on vacation next week. His columns will resume with the one for release July 7.)

Neal Peirce’s e-mail is

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One Comment

  1. Michael Koetting
    Posted June 22, 2013 at 7:32 am | Permalink

    Well…okay…..let’s assume I take the above at face value. It silll doesn’t address the fact that at the huge and growing base of the pyramid, the game is rigged. I defy anyone to show how someone with kids making $11/hour can set aside enough money to actually fund upward mobility in today’s society. The human arithmetic simply doesn’t work. The only hope for a change in the next generation is either very substantially higher wages at the bottom or mega-investment by government in making up the difference (e.g. education, transporation, housing). Neither of these seem likely at this point. So, while adding a bunch of middle-class jobs is a good thing, the kind of approaches described here aren’t even in the same zip code as doing something to equalize opportunity. That would require serious structural changes, and I don’t see leaders willing to take it on–much less voters willing to accept it. The kids are screwed.