Embedding Equity Into Economic Development

Posted by Sarah Treuhaft on July 19, 2016

It is another summer in which America’s deep racial fault lines are being painfully exposed. Following the horrific violence in Baton Rouge, Falcon Heights, and Dallas, in a July 8 poll, seven in ten Americans said race relations are “generally bad.” A National League of Cities analysis of one hundred “state of the city” speeches from 2016 found that mayors increasingly view racism and inequities as major threats to progress in their cities.

While police accountability, racial bias, and respect for black lives are rightfully at the center of the public debate, the tentacles of racial inequity reach far and wide—and need to be addressed within all sectors. At PolicyLink, we believe that dismantling structural racism and advancing equity—just and fair inclusion into a society in which all can participate, prosper, and reach their full potential—is the central challenge of our time. As America bolts toward its more multicultural future, the costs of our yawning racial gaps in education, employment, income, health, and wealth continue to grow. Already, more than half of all children under age five are people of color. Ensuring they have the resources and opportunities they need to invest in their futures and contribute their skills to building a more sustainable, “next economy” is an economic imperative for our nation.

Despite our collective need for inclusion, inequitable growth remains the norm. In the post-recession economy, America’s metropolitan regions are again growing, but it has been a low-wage recovery and most regions are not making progress toward racial and economic inclusion. Within central cities, we see a similar trend: growth is isolated to a few walkable neighborhoods while income, wealth, and home values are stagnant or declining everywhere else. Thus, while growth creates more favorable conditions for shared prosperity, economic gains do not automatically “trickle-down” to marginalized communities. Truly inclusive growth requires focused and intentional strategies that connect people and places that have been left behind to good, family-sustaining jobs and wealth-building opportunities in the regional economy.

To shift to inclusive growth, we need to embed an equity lens and approach into economic development practice. Last month, PolicyLink, the National League of Cities, and the Urban Land Institute launched an Equitable Economic Development fellowship dedicated to supporting cities as they implement new, transformative approaches to growing inclusive local economies. Boston, Charlotte, Houston, Memphis, Milwaukee, and Minneapolis are members of this first cohort, with six more to be selected in 2017.

Our initial meeting took place in Portland, Oregon, where the city’s economic development agency, the Portland Redevelopment Commission (PDC), has been working for the past several years to integrate equity throughout its strategy. Typical of many economic development departments, the PDC has a long history of policies and investments that have harmed communities of color and contributed to inequities. Seeking to change its ways, the agency adopted a comprehensive equity policy in 2013, and made equity the centerpiece of its 2015-2020 strategic plan. The plan explicitly claims equity as a primary value, presents the business case for inclusive growth (citing data included in the National Equity Atlas), and focuses on increasing economic opportunity for low-income communities and people of color. Admirably, the plan aims for a clear result: increasing the share of households living at or above a minimal self-sufficiency standard from 63 to 68 percent by 2020.

Deeply embracing equity has led PDC to get clear about how its investments result in good jobs and business opportunities for its struggling communities of color. The agency has also created some innovative programs, including an “Inclusive Startup Fund” that provides capital, mentoring, and business advice to startups founded by underrepresented groups.The PDC has committed to becoming an anti-racist, multicultural organization through internal training and analysis and stronger engagement with communities of color.

Portland’s efforts showcase how economic development agencies can retool themselves to take on today’s challenges of inequitable growth. As our cities grow more diverse yet also more unequal, equity is their path to innovation and shared prosperity. To advance equitable growth, these institutions need to eliminate the bias that exists within their own walls and develop a viable, results-focused economic strategy.

Steering institutions in new directions is no small task, but the need is urgent and there are clear starting points. Adopting an equity analysis tool that staff can use to assess who benefits and who suffers from institutional decision-making (such as this one from the Government Alliance on Race & Equity) is an excellent first step toward the long-term goal of undoing institutional racism and building a more equitable economy.

This post originally appeared on the Fourth Economy website.

(Photo credit: 1wheeljoe, via flickr, CC BY-NC 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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