Columnist: Economic Rejuvenation Rx: Skills Plus Equity

June 24, 2013

By Neal Peirce

If 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 pays 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 had conducted -- that metro areas with higher income equality are actually 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 actually co-chaired by a MacArthur Foundation vice president, Julia Stasch.

Several examples of economic strategy to benefit all economic groups get 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 with its century-long history of providing services for immigrant and low-income families. Working in challenged neighborhoods, its leaders see their 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 now seeking to break with old habits and shift to strategies they believe will grow the economic pie more sustainably. One key will be to tap skills not just at Arizona State University, the Phoenix area's major educational institution, but also in the region's community colleges. The timing is crucial, 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 there's a 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 both on economic growth and shared opportunities, are close to indispensable for making the right decisions for people's 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.

Neal Peirce's email address is nrp@citistates.com.

(c) 2013, The Washington Post Writers Group

The opinions expressed in this column are not necessarily those of the National League of Cities.