Equity and Economic Development Must Go Hand in Hand

Traditional approaches don’t always work. Cities need to be intentional about targeting their economic development programs at the people and communities that are increasingly distant from the growth sectors of their local and regional economies.

The city of Cleveland is incorporating innovative approaches to economic development like the Evergreen Cooperative Initiative, a new model of equitable economic development that focuses on creating living wage jobs and asset building opportunities in six low-income neighborhoods. (Getty Images)

This is a guest post by NLC President and Cleveland Councilmember Matt Zone. It was first published in the 25th anniversary edition of PACDC magazine.

In today’s rapidly-changing demographic, social, environmental and economic environment, the need for equitable economic development programs is particularly urgent. According to the Brookings Institution, states and localities spend $50 to $80 billion on tax breaks and incentives each year in the name of economic development despite a mountain of evidence showing that tax incentives produce mostly marginal returns. These traditional approaches to economic development by local governments have not benefited all populations — and, in many cases, the policies and programs have particularly neglected or even shortchanged people of color, immigrants and low-income communities.

When cities instead invest in making economies more equitable from the bottom up, or from the middle class out, economic growth is likely to be better for all residents, and that growth is more likely to be sustained over longer periods of times. Cities need to be intentional about targeting their economic development programs, funding and policies at the specific populations and neighborhoods that are increasingly distant from the growth sectors of their regional and city economies.

In my city, we have a nonprofit organization called the Democracy Collaborative that is a national leader in equitable, inclusive and sustainable development. In partnership with the city, the Cleveland Foundation, the Ohio Employee Ownership Center, and major hospitals and universities, they helped to implement a new model of large-scale, worker-owned and community-benefiting businesses. The Evergreen Cooperative Initiative is beginning to build serious momentum in Cleveland, and we’re very proud that this model is being referred to nationally as “The Cleveland Model.” We see innovative approaches to economic development emerging in other cities nationwide to bring green job creation and neighborhood stabilization, and I’m very proud that the National League of Cities (NLC) is working to speed up the learning process in this area.

To that end, and in partnership with PolicyLink and the Urban Land Institute (ULI), NLC launched the Equitable Economic Development (EED) Fellowship last year with the generous support of the Surdna and Open Societies Foundations. Specifically, the EED Fellowship provides one year of technical assistance to a class of six cities to help them pursue more equitable and inclusive economic development policies and programs in traditionally underserved communities — those that have the highest levels of unemployment and the lowest levels of income and educational attainment, and represent the highest needs for job- and workforce-related programs in the city. Through leadership development, technical assistance, peer learning and sharing best practices, the fellowship provides city leaders with insights and tools to make equity, transparency, sustainability, innovation and community engagement driving forces for how they conduct economic development and bring an intentional focus on communities that have been historically disconnected from economic growth and prosperity.

The inaugural EED Fellowship class consists of three fellows each from the cities of Boston; Charlotte, North Carolina; Houston; Memphis, Tennessee; Milwaukee and Minneapolis. The participants in NLC’s Equitable Economic Development Fellowship are tackling unemployment, low income levels, and workforce-related issues in their communities — but each city is employing different tactics.

The EED Fellowship includes a year-long program of working retreats, web-based discussions, site visits and peer exchanges to introduce the teams of practitioners from each participating city to best practices, national experts, and their peers across the country. Throughout the year, the EED Fellowship also offers technical assistance via webinars on different topics identified by the six cities.

Each city in the program has also identified an economic development policy or program that they want to advance with a more equitable approach, and NLC, PolicyLink, and ULI deliver technical assistance to them on that project throughout the year. Some of the topics covered include: inclusive strategies for small business development and entrepreneurship support, best practices in collecting data for equitable economic development, institutionalizing equity in economic development programs and policies, and presenting a framework to incorporate an equity lens in economic development incentive package.

The work of the EED Fellowship cities also serves as a model for a new Economic Mobility and Opportunity Task Force at NLC. Based on years of work that NLC has done on antipoverty efforts and family economic security, I created this task force last fall, and asked Mayor Kasim Reed of Atlanta to chair it. The task force is comprised of 22 elected officials around the country, and Mayor Reed issued a challenge this month that each of those leaders should implement a new policy or program in their city before the task force concludes its work at the end of the year. That charge — to move from talking about innovation to actually acting to bring it about in our cities — is exactly the kind of leadership that NLC wants to bring to the challenges facing cities. We’re very proud to be leading this work with our Equitable Economic Development Fellowship. Please follow the task force’s progress and look for a report on a set of recommendations for local leaders at the end of the year.

Stay up-to-date on the Economic Mobility and Opportunity Task Force and the EED Fellowship by following this blog series. Ready to take action in your own city? Take the Local Action Challenge for Economic Mobility and Opportunity and sign a pledge to increase economic mobility and opportunity for your residents in 2017.

About the author: Matt Zone is the 2017 president of the National League of Cities (NLC). He serves as a city councilmember in Cleveland, Ohio, representing Ward 15, which includes the Detroit-Shoreway neighborhood where he and generations of his family grew up.