By Sarah Treuhaft, Angela Glover Blackwell, and Manuel Pastor
Written to frame the conversation among 2,300 equity advocates and practitioners at the fourth national PolicyLink Equity Summit 2011 in Detroit, our paper America’s Tomorrow: Equity is the Superior Growth Model presents a new framework for thinking about equity and America’s economic future. In it, we argue that as the nation witnesses new extremes of inequality alongside the emergence of a new people-of-color majority, equity has become more than a matter of social justice or morality and is now an economic imperative. We suggest some policy directions for building an equitable economy and call for broad-based social movement to advance this agenda.
The summary of the paper below incorporates relevant data on California’s demographic shifts alongside the national statistics. The complete version of the paper can be found at http://www.policylink.org/EquityIsSuperiorGrowthModel.
America Needs A New Growth Model
The nation’s current economic model is broken. Over the past several decades, economic growth has slowed, racial and income inequality has spiked, and the middle class has withered. America needs a new strategy to bring about robust growth that is widely shared by all who live within its borders.
The new growth model must embrace the nation’s changing demographics, and make the investments needed to allow the next generation to reach its full potential. The U.S. is undergoing a major demographic transformation in which the racial and ethnic groups that have been most excluded are now becoming a larger portion of the population. By 2042, the majority of the population will be people of color.
California is in the vanguard when it comes to this demographic shift. The state became majority people-of-color in the late 1990s and will continue to grow larger and more diverse. By 2050, nearly three-quarters of the state’s population will be people of color and more than half of Californians will be Latino.
Because youth are at the forefront of the nation’s demographic transition, there is a growing racial generation gap between America’s oldest and youngest. Nationwide, 80 percent of seniors are non-Hispanic white, compared with 54 percent of those under age 18. In California, seniors are more diverse (62 percent white) but youth are also much more diverse (27 percent white), creating a wider gap between old and young.
Too many elders and decision makers do not see themselves reflected in the faces of the next generation, and they are not investing in the same educational systems and community infrastructure that enabled their own success. This racial generation gap does not only put youth of color at risk, but is a threat for all children and for the nation as a whole.
Racial and Economic Inclusion Will Help America Grow and Compete
Reducing inequality, growing the middle class, and turning today’s youth and workers into tomorrow’s skilled workers and innovators are critical to restoring America’s growth and competitiveness. Given the nation’s demographic transition, the nation’s leaders must address the wide racial disparities in educational outcomes, income, health, wealth, and employment that drag down the economy and hold back its potential.
Reducing inequality is good for growth
Increasingly, economists are finding that inequality is not only bad for those at the bottom of the income spectrum; but also places everyone’s economic future at risk. Recent studies suggest that inequality hinders growth and that greater economic inclusion corresponds with more robust economic growth.
A diverse population is an economic asset
America’s transformation into a world nation inside its borders can help it connect to—and succeed in—the global economy. Diverse perspectives help teams solve problems and can foster the innovation needed to grow the economy. And diverse communities also create new markets: developing new enterprises and providing a significant consumer base for existing businesses.
Building a skilled workforce is critical to securing our economic future
The jobs of tomorrow will require ever-higher levels of skills and education, but our educational and workforce systems are not adequately preparing people for these jobs. Forty percent of California’s jobs in 2018 are projected to require at least an Associate’s degree, but only 16 percent of Latino Californians and 16 percent of black Californians have achieved this level of education, compared to 51 percent of white Californians. Closing the wide and persistent racial gap in educational attainment is the key to building the strong workforce that is the backbone of the state’s economy.
Implementing an Equity-Driven Growth Model
An equity-driven growth model would grow new jobs and bolster long-term competitiveness while at the same time ensuring that all—especially low-income people and people of color—have the opportunity to benefit from and co-create that growth.
America’s Tomorrow highlights promising strategies that link vulnerable populations to good jobs and career pathways while strengthening their local and regional economies within three key arenas:
1) Rebuilding Our Public Infrastructure
High-quality public infrastructure—roads, transit lines, schools, bridges, sidewalks, etc.—is an essential ingredient for fostering competitive regions, and public investment in infrastructure projects is one of the best strategies available to create jobs and get dollars flowing in the economy after a downturn. By choosing infrastructure projects that maximize job opportunities, targeting infrastructure jobs and projects to the people and communities most in need of jobs, and creating opportunities for local- and minority-owned businesses, communities can achieve equity and growth at the same time.
Example: In St. Louis, Metropolitan Congregations United and the Transportation Equity Network got the Missouri Department of Transportation to agree to devote 30 percent of the workforce hours on a $500 million highway project to low-income apprentices, and 1/2 of 1 percent of the project budget to job training. Other cities and states have adopted similar workforce provisions, and advocacy groups are now working to incorporate a similar construction careers policy in the next multibillion-dollar federal transportation bill.
2) Growing New Businesses and New Jobs
Small businesses create two out of every three jobs in this country and are critical for providing economic opportunities for low-income communities and communities of color. Providing training support and linking entrepreneurs to larger-scale opportunities—larger markets, larger sources of capital, and larger economic development and growth strategies—can create more start-ups and help existing small businesses grow so that they generate more jobs for the people who need them most.
Example: Since 1993, the Neighborhood Development Center in St. Paul has collaborated with community-based organizations to help diverse residents start their own businesses. The Center provides a 16-week entrepreneurship course and follows up with business start-up and expansion loans, ongoing business support and technical assistance, and low-cost commercial space through its seven business incubators. 500 graduates are currently operating businesses, sustaining 2,200 jobs in the community.
3) Preparing Workers for the Jobs of Tomorrow
The nation’s public- and private-sector leaders need to create an education and workforce training system that equips current and future workers with the skills they need to thrive in the world of work. Ensuring that all workers—including those who face high barriers to employment—can get the advanced training or education needed to access “middle-skill” jobs that pay family-supporting wages and offer career growth is critical. For the low-income children who face the greatest risk of not succeeding in school or work, this preparation must begin before they enter kindergarten and last throughout their careers.
Example: The Chambers of Commerce in Santa Ana and Los Angeles launched partnerships with their local school districts to bridge the growing gap between the education levels of their diverse youth populations and the needs of their employers. The Santa Ana Chamber created a jointly-administered high school that trains students for careers in six growth industries (automotive and transportation, engineering and construction, global business, health care, manufacturing, and new media), while the Los Angeles Chamber has arranged summer jobs and internships for the students with thousands of employer partners.
It Takes a Movement
Only a real social movement can bring about the social, cultural, market, and political shifts needed to create an equitable and inclusive economy. Major shifts in policy and politics are needed at every level—from local job creation to national economic policy—and bringing about those shifts will require sustained advocacy and diverse leadership that spans generations, sectors, and issues. New champions for equity-driven growth, including unlikely ones, will need to emerge.
For “growth” and “equity” to come together, all will need to stretch outside of their comfort zones. Growth advocates will need to stop seeing equity as something that hopefully trickles down from their efforts to attract and grow businesses, and recognize that racial and economic inclusion will help them achieve their primary goals of growth and competitiveness. Equity advocates, who have traditionally focused on how the benefits of growth are divvied up, will need to concentrate more on generating job growth, and choose strategies that work with market forces to reach their equity goals.
As the country nears its status as a people-of-color majority nation, all must act—now—to prepare for the future. Equity is the superior growth model. It is the path to prosperity–for all.
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Sarah Treuhaft is an Associate Director with PolicyLink. She manages research and action projects to advance equitable policy change and provides technical assistance to community coalitions on a number of equity-related issues. She is currently coordinating a new research partnership between PolicyLink and the Program for Environmental and Regional Equity (PERE) at the University of Southern California on equity’s role in securing a prosperous economic future.
Angela Glover Blackwell founded (1999) and is the Chief Executive Officer of PolicyLink and continues to drive its mission of advancing economic and social equity. Under her leadership, PolicyLink has become a leading voice in the movement to use public policy to improve access and opportunity for all low-income people and communities of color, particularly in the areas of health, housing, transportation, education, and infrastructure.
Dr. Manuel Pastor is Professor of Geography and American Studies & Ethnicity at the University of Southern California where he also serves as Director of USC’s Program for Environmental and Regional Equity (PERE) and co-Director of USC’s Center for the Study of Immigrant Integration (CSII).
