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Cascade: No. 85, Summer 2014

Reinventing Older Communities: Bridging Growth & Opportunity*

How can economic growth create better job, education, and housing opportunities for low-income people and communities? The sixth biennial Reinventing Older Communities conference probed strategies to create opportunities in education, employment, revitalization, and other areas.

Recurring themes were the importance of collaboration and partnership with different sectors and of ongoing data collection and analysis to identify issues and measure progress in addressing them.

The conference was organized by the Federal Reserve Bank of Philadelphia and 11 cosponsors and was attended by 465 practitioners and researchers from 25 states and the District of Columbia.

Angela Glover Blackwell, Founder and CEO, PolicyLink; Manuel Pastor, Professor of Sociology and
American Studies & Ethnicity, University of Southern California; and Raj Chetty, Bloomberg Professor of Economics, Harvard UniversityAngela Glover Blackwell, Founder and CEO, PolicyLink; Manuel Pastor, Professor of Sociology and American Studies & Ethnicity, University of Southern California; and Raj Chetty, Bloomberg Professor of Economics, Harvard University

Intergenerational Mobility

The U.S. is “a collection of societies, some of which are ‘lands of opportunity,’ with high rates of mobility across generations, and others in which few children escape poverty,” Raj Chetty, Bloomberg Professor of Economics at Harvard University, and coauthors said in a National Bureau of Economic Research working paper issued in January 2014,1 which provided the basis for Chetty’s keynote speech.

The probability that a child of parents who are in the bottom fifth of the income distribution can reach the top fifth of the income distribution varies from 4.4 percent in Charlotte, NC, to 10.8 percent in Salt Lake City, UT, to 12.9 percent in San Jose, CA, according to the paper. Chetty and other researchers used anonymous federal income tax records that provide data on the incomes of over 40 million children and their parents between 1996 and 2012.

Areas with high upward mobility have less residential segregation, less income inequality, better primary schools, greater social capital (such as involvement in church and civic organizations), and greater family stability, the paper said. Upward mobility is significantly lower in areas that have larger African American populations, even for whites who live there.

Chetty said in a keynote presentation at the Reinventing conference that upward economic mobility has been low in the U.S. relative to other developed countries for the past several decades and that increased mobility could contribute to economic growth and reduce transfer payments.

He said that differences in upward mobility result from factors that affect children while they are growing up, rather than after they enter the labor market, and concluded that “local policies and community structures matter a great deal for life opportunities for all.”

Speakers throughout the conference highlighted challenges with intergenerational mobility. Manuel Pastor, professor of sociology and American Studies & Ethnicity at the University of Southern California, said that education is a “leveler,” but there are persistent economic gaps for members of racial and ethnic minorities. Angela Glover Blackwell, founder and CEO of PolicyLink, observed, “Where you live is a proxy for opportunity.”

Equitable Growth

A major area of focus at the Reinventing conference was on how economic growth can become more “equitable” and include all people and communities. An inclusive, equitable model for growth recognizes growing racial and ethnic diversity in the U.S.2 Some international economists believe that an equitable approach can extend periods of economic growth.3

Equitable growth strategies typically involve building connections with different sectors and different parts of a region. Collaborative discussions might bring together community-based organizations, businesses, foundations, developers, city and regional leaders, and planners, among others. Equitable growth strategies often promote transit-oriented development and environmental sustainability, connect workers to high-growth job sectors, encourage anchor institutions to implement local procurement and local hiring policies, strengthen local and minority-owned businesses, and maximize job creation through public investments.

For example, the Partnership for Southern Equity in Atlanta held forums, conducted research to support opportunities for equitable development, and helped develop the Metro Atlanta Equity Atlas.4

Equitable growth initiatives combine an inclusive vision and a community organizing process, noted Pastor, who has developed regional equity profiles as a first step in building consensus on growth and opportunity issues.5

Data collection and measurement are critically important in equitable growth strategies to understand community needs, build agreement, evaluate progress, and adjust future plans. The speakers agreed that data must be made accessible to the community as well as to researchers.

Bridging Through Education

In a view echoed by several speakers, Mark Zandi, chief economist at Moody’s Analytics, said that the path to intergenerational mobility is raising skills and educational attainment.

Chetty told the Reinventing audience that improvements in education have the clearest causal effects on upward mobility and that teacher quality matters in all grades, not just in early ages, and may be more important than class size. Better teachers, as measured by teachers’ impacts on children’s test scores, substantially increase students’ earnings and college attendance rates, according to a 2013 study by Chetty and coauthors that tracked over 1 million children from childhood to early adulthood.6

Public school leaders in Toledo, OH; Philadelphia; Milwaukee, WI; and Detroit had the following suggestions on strengthening public school systems: The most talented teachers should teach students with the greatest needs; businesses and educators need a shared understanding of the competencies required for employment; homeowner and rental housing assistance programs might help attract teachers; and different sectors must be united in working for school success.

Research conducted by the family foundation of M. Night Shyamalan, director, filmmaker, and author of I Got Schooled, found that in highly successful schools the entire school staff promotes and reinforces student achievement and success; the best teachers are identified and retained; evidence-tested teaching methods are used; school principals spend much of their time coaching teachers; and the school day and school year are extended.

The importance of cross-sectional support for early childhood education and other issues was also emphasized. For example, the San Antonio Chamber of Commerce in Texas joined political leaders and equity advocates in backing a sales tax to fund pre-K education for disadvantaged children, an action consistent with the chamber’s workforce development goals.

Bridging Through Employment

A high priority of equitable growth initiatives is providing access to jobs in expanding employment sectors. Workers need long-term preparation so that they can secure jobs when they become available. Many organizations are involved in workforce development, and one speaker questioned which entity is best suited to link residents to jobs.

The Cara Program, a 23-year-old nonprofit in Chicago, provides low-income residents looking for employment with intensive short-term orientation, temporary employment through a Cara affiliate, and access to permanent jobs through a network of area employers. Cara Program staff works with residents for up to two years following permanent employment on budgeting and other needs.

Charles I. Plosser, president and CEO of the Federal Reserve Bank of Philadelphia, said that business leaders he has met with repeatedly say that they have difficulty finding qualified candidates in the areas of science, technology, engineering, and math (STEM).7

Respondents to the Philadelphia Fed’s April Business Outlook Survey of manufacturers identified the availability of skilled labor as the most important factor influencing their decisions to remain in the region, President Plosser said. Manufacturers also ranked the availability of skilled labor as becoming a more important factor in recent years.

Bridging Through Revitalization

Equitable revitalization seeks to ensure that low- and moderate-income residents and businesses benefit from revitalization and that negative impacts are minimized. Pastor asked how improvement in a geographic area should be measured to determine if redevelopment benefits residents and the region. Data collected should include areas of interest to residents, an action that builds trust with residents.

The East Baltimore Revitalization Initiative (EBRI) helped develop economic inclusion agreements for local and minority hiring, training, contracting, and business development after plans were announced for a science and technology office and laboratory complex and an adjacent mixed-income community. EBRI staff worked with residents to advocate for a school, early learning center, and park and enhanced assistance for 742 households that were relocated as a result of the development.8 A broad-based Baltimore Neighborhood Indicators Alliance compiles data on “vital signs” and monitors changes in neighborhood conditions.9

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