Local Leaders Just Gained a New Tool to Address Inequality

Posted by Sarah Treuhaft on March 23, 2015

A new Brookings Institution analysis confirms what we are feeling: inequality continues to climb in cities, and large income gains at the top are not lifting up incomes near the bottom. In the face of such inequitable growth, cities need to use every tool at their disposal to connect their low-income residents to good jobs that offer opportunities to move up those rungs. One piece of good news is that the federal transportation department made a big move to expand that toolkit earlier this month by launching a new Local Hire pilot program.

As Laura Barrett has written about on this blog, local/targeted hire is a no-brainer. In short, it’s a no-cost way for local leaders to connect unemployed or underemployed people in their communities to the growing pool of quality jobs being created by transportation investments. Los Angeles, Denver, Atlanta and many other regions are ponying up billions of dollars to build 21st century transit systems, and every $1 billion they spend will translate into some 50,000 jobs. There will also be many replacement job openings in transportation in coming years, since a large share of transportation workers are nearing retirement age. Transportation jobs are generally good “middle-skill” jobs that pay well and provide benefits (largely because of high levels of unionization), and are available to people who have some level of postsecondary training but not necessarily a college degree. But despite the potential for transportation jobs to expand economic mobility, women and people of color—especially African Americans—have long been underrepresented in the sector’s middle-skill jobs, and locked out of jobs on the transit lines and roads being built right in their own communities.

Forward-thinking cities and states, prompted by community advocates and organizers, have used local and targeted hiring policies to connect local residents, low-income residents, and other disadvantaged groups like people with criminal records, to the jobs being created through their public investments. These are classic local equitable development policy innovations that have been shown to work, particularly when they are combined with strategies to open up apprenticeships to underserved workers. But for more than forty years, federal policies blocked cities and states from requiring local hiring on projects funded with federal transportation dollars. This prohibition was put in place when transportation projects were 80 percent federally-funded out of a fear of unfair competition, and has remained there even though the funding mix has shifted and local funding now dominates.

The pilot program lifts this archaic policy for a year, allowing transit agencies to test out local hiring. This is a tremendous win for the Transportation Equity Caucus and many other advocacy groups who’ve long pushed to remove this barrier and leverage our transportation investments to expand access, mobility, and opportunity for all. (Full disclosure: PolicyLink is the co-convener of the Equity Caucus)

Early results from Los Angeles illustrate the potential of local hire. Thanks to fierce advocacy from former mayor Antonio Villaraigosa, the county secured approval in 2012 to include local and targeted hiring in a project labor agreement and construction careers policy that now covers 12 transit expansion projects. It requires that 40 percent of the work hours go to workers living in economically disadvantaged zip codes, that 10 percent of the hours go to disadvantaged workers (such as the chronically unemployed, homeless, single parents, veterans, and people with criminal records), and that 20 percent of the hours go to apprentices. The policy is now being applied on the $2 billion, 8.5-mile Crenshaw/LAX Transit Corridor Project light rail line through South LA, and reports from November 2014 show that the contractor is exceeding the requirements, with 58 percent participation from workers living in economically disadvantaged zip codes.

Mayors, council members, and other local leaders who want to take action to reduce inequality should take up the transportation agency on their trial offer (and share your support for the program here). While inequality is largely the result of federal and state policies and global economic trends, there is a lot that local leaders can do to address the high unemployment and stagnant wages contributing to the rising gaps between their rich and poor. Targeted employment strategies are also crucial to reducing the widening gap between wages and housing costs in many of the same cities where inequality is high and rising.

Doing everything possible to connect residents left out of the recovery to good job opportunities is a key part of the local equitable growth agenda that cities need to be implementing. It is not enough—they also need to be growing new good jobs through smart entrepreneurship and economic development policies and raising the floor on low-wage jobs—but it is a crucial leg of the “all-in cities” stool.

(Photo credit: Flickr user MTA of the State of New York, CC BY 2.0)

About the author more »

Sarah Treuhaft is director of Equitable Growth Initiatives at PolicyLink, a national research and action institute advancing economic and social equity. She leads the organization’s work on demographic change and the economy, collaborating with local and national partners on research and action projects that aim to build a more equitable economy. She manages the development of the National Equity Atlas (www.nationalequityatlas.org), a web-based data and policy tool produced in partnership with the USC Program for Environmental and Regional Equity.

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saundra raynor
31 Mar 15, 7:40 am

You focus on low-income without defining what low-income is.  Do you mean households with less than $50,000 a year in income?  Less than $35,000?  You don’t seem concerned about those of us on the margins, with no savings and having difficulty paying our housing expenses: mortgage, insurance, property taxes, etc.

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