Cross-posted from the New Economy Week

Uber recently purchased one of the largest office spaces in downtown Oakland, California, with plans to move 3,000 of its workers there by 2017. For a city facing a housing crisis and rapid displacement of Black families and low-income communities, many fear this act will accelerate gentrification pressures. It has also led to some cautious optimism for an opportunity to make Oakland a leader in what Mayor Libby Schaaf has called techquity: “fostering our local technology sector’s growth so it leads to shared prosperity.”

Tech companies can play a role in advancing an equitable economy, but they will first have to confront a deeply inequitable status quo. The San Francisco Bay Area has one of the highest levels of inequality of any region in the country, and it is growing at an alarming pace. Unequal access to business and job opportunities have deepened racial economic gaps – Black and Latino workers earn a median wage that is $10 an hour less than White workers in the Bay Area, and these racial inequities exist across all education levels. The tech-driven “innovation economy” can reverse these trends. But to understand how, it’s important to examine how the innovation economy works.

An innovation economy is based on a model of economic growth that leads with knowledge, technology, and entrepreneurship to increase productivity, and therefore business revenues and profits. It is not a particular sector of the economy, rather it cuts across many sectors and industries, such as information technology, advanced manufacturing, and energy. Increasingly, cities across the country are pursuing economic growth through innovation by creating what The Brookings Institution calls Innovation Districts – urban, walkable neighborhoods where research institutions are housed alongside start-ups, incubators, and accelerators in order to foster a network of “creative class” technologists to spur economic activity.

This economic model raises important equity questions: Who is developing these new technologies and how do they decide which societal challenges to focus on? Who owns these companies, and who is investing in (and profiting from) them? Who works at these companies, and who works in the many jobs that support them? How is the wealth they create distributed among the workers, the community, and the city where the company is located? In other words: Who benefits?

Throughout most of the innovation economy, and in technology companies in particular, the answer to these questions does not include Black, Latino, and low-income communities. Black and Latino residents combined make up only five percent of the tech workforce, two percent of tech company founders, and two percent of investors, even though they are nearly 30 percent of the U.S. workforce. Innovative companies spur the creation of a large number of service and support jobs – as many as four support jobs for every one technology job created – but these tend to pay low wages, even though rents and the cost of living are rising most rapidly in areas with strong innovation economies.

This presents a paradox. Today, the innovation economy is undoubtedly contributing to rising inequality and a widening racial income and wealth gap. Yet a growing body of research is showing that equity – just and fair inclusion in society – is not only beneficial for innovation, but is essential for our future economic prosperity. Diverse companies are more innovative and more profitable. Regions with greater equity have longer economic growth spells and fewer and shorter downturns. And reduced income inequality may actually lead to more inventors, who create more new technologies and drive innovation forward.

So how can we foster an equitable innovation economy?

Here are three examples of organizers, educators, and, yes, even economic developers, who are working to harness the power of the innovation economy to head towards a future of shared prosperity for all:

Raising the floor for the low-wage "invisible" workforce in Silicon Valley

Tech companies may have a dismal record on diversity among their engineers and top executives, but they employ the services of thousands of workers of color, mostly Black and Latino, who cook, clean, and guard for them. Most of these “invisible” workers earn less than a quarter of the salaries of the engineers they work with in the same building.

In Silicon Valley, janitors, food workers, bus drivers, and other low-wage workers are rising up to demand good jobs from these tech companies. Silicon Valley Rising, launched in February of this year, is a coalition of labor groups, faith leaders, and community-based organizations that is pushing for quality jobs, affordable housing, and corporate responsibility in the tech sector.

In its first ten months, it has achieved impressive results. The shuttle drivers who drive Facebook employees voted last Spring for a union contract that increases their pay by over 25 percent and includes health care, paid time off, better scheduling, and more. Facebook has also agreed to require their contractors pay a minimum of $15 an hour and provide paid time off. Apple, Google, Microsoft, and other Bay Area tech companies have also improved wages and working conditions for some of their contract workers.

“We believe we can create something different here,” said Maria Noel Fernandez, campaign director with Silicon Valley Rising. “We’re working to inspire tech to rebuild the middle class with us.”

Re-directing planning and economic development tools to support manufacturing and promote equitable innovation

With an unemployment rate below four percent, some are declaring that the Bay Area has recovered from the recession. Yet this masks the reality of where the job growth has been – primarily in low-wage jobs and some high-wage jobs – and where it’s not been – mainly in middle-wage jobs that have seen a nearly 10 percent decline over the last 12 years in the Bay Area. These middle-wage jobs may not be found in tech companies, but they do exist in industries like manufacturing, and are essential to building an equitable innovation economy.

During the economic boom of the late 1990s, the City of San Jose faced enormous pressure to convert much of its industrial land in the north end of the city to housing or other development. However, these industrial spaces were some of the few places where manufacturers could locate. Instead of converting the land, the City adopted a development policy for the area that prioritized industrial uses. Today, the area is home to 25 percent of all jobs in San Jose, many of which are provided by manufacturers that supply some of the biggest tech companies in the area with custom orders for new products or parts.

San Jose is one of four cities that has joined the Equitable Innovation Economies Initiative, a project of the Urban Manufacturing Alliance led by the Pratt Center for Community Development with PolicyLink. Each of the four cities – New York City, Indianapolis, and Portland, Oregon – is designing strategies to increase access and economic opportunities within the innovation economy such as targeting investment dollars to entrepreneurs of color and women, bringing businesses back to industrial spaces in working class communities, and supporting manufacturers to hire neighborhood residents. As a part of this initiative, San Jose is now working with manufacturers and community colleges to create a pipeline for young people from low-income communities to start careers in manufacturing.

Developing the leadership and tech skills of young, Black men in Oakland.

Begun in 2012 as a labor of love by five Black entrepreneurs and technologists, The Hidden Genius Project was envisioned as a project for youth to discover their passions through technology, entrepreneurship, and leadership skills. Three years later, The Hidden Genius Project has served over 350 Black youth and young men, and was recently announced a winner for the highly competitive Google Impact Challenge Grant.

Based in Oakland, the project operates in the center of the Bay Area’s tech economy, yet in neighborhoods like East Oakland where few tech workers live. They plan to change that equation by involving young men in middle school and high school in an intensive, multi-year training and mentorship program to develop new tools and start companies that meet the challenges in their communities. They organize hackathons, workshops, visits to tech campuses, and provide an intensive 15-month program.

“We don’t do this work so that companies like Google can diversify its workforce,” said Brandon Nicholson, founding executive director of The Hidden Genius Project. “We do it so that Black youth can be leaders in transforming their lives and communities.”

The innovation economy can help us solve one of the most pressing challenges of our generation – rising inequality and a growing racial wealth and income gap – or it can accelerate us down our current path of low-wage jobs for the many and unimaginable wealth for the few. These local leaders are showing that an equitable innovation economy is possible. Indeed, it is necessary. Now, it is up to us all to create it.

As Equity Summit 2015 approaches, America’s Tomorrow will showcase the work of a few of the 100-plus speakers, presenters, and performers featured at the Summit — inspiring equity leaders who are using innovative approaches to build an inclusive, thriving economy within their regions.

This summer, Thunder Valley Community Development Corporation (CDC) in Pine Ridge, South Dakota, broke ground on transformative housing development — the first phase of a project that hopes to be a model for Native and rural communities in building sustainable communities that deliver a triple bottom line: people, prosperity, and the planet. America’s Tomorrow interviewed Nick Tilsen, executive director of the Thunder Valley CDC, about how he is working to cultivate a new generation of Native American leaders to reverse decades of disinvestment and failed government policies and build culturally and economically thriving tribal communities.

What spurred the creation of the Thunder Valley Community Development Corporation?

The Thunder Valley CDC was born out of a movement of young people here in Pine Ridge reconnecting to our culture, our spirituality, and our identity as Lakota people. This reconnection created a sense of empowerment, and a sense of responsibility. Here we are in a place that is rich in culture and spirituality, but it is also one of the poorest communities in America, with 48 percent of our residents living below the federal poverty line and an unemployment rate of 89 percent. We also have high suicide rates and poor health outcomes that are negatively impacting our community. We felt that it was our responsibility to organize ourselves to uplift our communities, to change our reservation from within.

What role did economic development play in your vision for revitalizing Pine Ridge?

When we started, at the beginning, we wanted to address the root causes of creating perpetual poverty in our communities — it boiled down to the lack of financial, political, and governance structures that create the physical infrastructure and investments that ultimately create jobs. If we don’t have roads, sewer, electricity, then no wonder there’s no development being done here or jobs being created. Thunder Valley CDC decided that to become a catalyst in the region, we had to set out a bold…new plan of development on the reservation. So our organization has purchased 34 acres of property and did a huge amount of community engagement to create a vision for what kind of communities we as Lakota want to live in in the 21st century. How can we live in the past, present, and future, and do everything through the cultural lens of who we are?

What specific strategies are you pursuing for creating a more sustainable, prosperous economy?

As part of the funding for the CDC, we received a Sustainable Communities Regional Planning grant from the department of Housing and Urban Development that really challenged us to assess the economic picture of the reservation. We conducted an Equity and Opportunity Assessment, partnering with PolicyLink and the Kirwan Institute, that helped us understand what was perpetuating poverty on the reservation. For example, we realized that 51 percent of our existing workforce is not living on the reservation, and there isn’t one house for sale or for rent to allow them to move here. So all of a sudden, that became our niche: we needed to make sure our earners, the people who will rebuild our economy, can live here. Because otherwise, because we are so rural, they are commuting 50–120 miles each day, just working so they can put enough gas in their car to get to work again, getting stuck in perpetual poverty just because the community they can find a house in isn’t the one they work in. That’s why creating housing and home ownership for the existing workforce became one of our priorities.

Second, we are focusing on creating job opportunities on the reservation and workforce development. We are ensuring the jobs created by the [construction of the community housing] development, which is a 10-year $60 million development, stay within the community. In that process, you create community wealth that ultimately alleviates poverty. People in our community are more interested in the idea of communal ownership and building community wealth instead of just individual wealth, so we are looking to social enterprise, nonprofit models to create a worker-owned construction company, and perhaps property management and technology-related companies [down the road].

What role do you see the youth population playing in this vision?

The very history of our organization is based in this very strong belief in youth entrepreneurship and youth employment — 25 of the 71 CDC employees right now are high school age youth and under. You have to empower young people to come up with creative solutions themselves. Through guidance, mentorship, structure...our youth are becoming changemakers, creating opportunities for connection and engagement for other youth in the reservation, building community gardens, running sports events, and other activities.

What do you hope to gain from speaking at and attending the Summit?

We’re in one of the most isolated places in America, and a lot of times we feel like we’re completely forgotten. The Summit is a place where people are defining what it means to build an equitable America, and Native American people have to be part of those conversations. Also, we’ll get to meet and learn from all these different people from different backgrounds, grassroots people rolling up their sleeves to achieve equity in their communities — being around that reminds us that we are all connected, we are all part of this movement.

To learn more, visit the Thunder Valley Community Development Corporation website and watch this short video about their work.

Read the rest of the August 28, 2015 America’s Tomorrow: Equity is the Superior Growth Model issue.

(This blog post is cross-posted from CitiesSpeak and is the first installment in a series focused on NLC’s 2015 Cities and Unequal Recovery report, which highlights the findings of the 2015 Local Economic Conditions survey.)

NLC’s 2015 survey of local economic conditions paints a clear picture of unequal growth in America’s cities, underscoring the need for bold, focused strategies to firmly link low-income communities and communities of color with regional (and global) economic opportunities.

Two years ago, New York City mayor Bill DeBlasio captivated voters with his “tale of two cities” narrative summarizing the dynamics of rising inequality in America’s largest metropolis. NLC’s 2015 survey of chief elected officials reveals how uneven growth is not isolated to high-tech boomtowns, but widespread among the nation’s cities.

The survey illustrates the challenge of poverty amidst plenty: While 92 percent of city mayors said economic conditions improved in the past year, 50 percent reported an increase in demand for survival services like food and shelter, 36 percent saw an increase in homelessness, and 24 percent reported a decrease in housing affordability.

Read the full blog post on CitiesSpeak>>>

We are witnessing a major demographic shift to a majority people of color nation, likely by the year 2043. At the same time, the technology sector is flourishing and has become a pillar of our economy. Acting now to connect youth of color—the country’s future workforce—to the growing technology sector is in the nation’s best interest, and an emerging partnership in Oakland is doing just that.

The partnership consists of:

• #YesWeCode, a national effort led by Van Jones that, like Rev. Jesse Jackson’s Rainbow PUSH coalition, draws attention to the underrepresentation of people of color in the technology sector;
• The Hidden Genius Project, which is pursuing opportunities to scale up its efforts to train Bay Area youth of color to build programming and coding skills;
• The David E. Glover Education and Technology Center, which has been providing technology training for young and older residents in the underserved, low-income East Oakland community for the past 15 years; and
• The Brotherhood of Elders Network, an intergenerational network of African American men with the mission of assisting African American boys to reach their potential, contribute to community, and thrive.

 

The project will get off the ground this summer with an eight-week pilot coding skill building program for 20 youth of color, which will lead to a year-round coding program for up to 50 youth of color at the Glover Center, starting this fall.

On June 19, this unique partnership was featured on MSNBC’s The Cycle during a live broadcast, including a town hall with Oakland residents at the David Glover Education and Technology Center. The town hall conversation was intergenerational, with African American boys—ages 14-18—listening, learning, and asking questions of elders, successful African American entrepreneurs, and a Facebook executive.

The broadcast and town hall also focused on the complementary values and win-win outcomes of the emerging partnership: #YesWeCode brings in a national constituency of interest, Hidden Genius can scale up years of coding experience, the Glover Center has trained low-income communities of color on technology for years, and the Brotherhood of Elders network brings decades of combined experience, wisdom, and political and resource connections—the Brotherhood will also provide youth in the coding cohort with coaching, mentoring, and soft skill development tools.

Equity advocates need to follow and support this partnership—what better time to get on board, when youth of color are our emerging leaders and the technology sector is the major economic engine of the future?

For the more than 11 million undocumented immigrants living in the United States, the inability to obtain a state-issued ID poses a staunch barrier for participating in local economies and community life. Though undocumented immigrants contributed an estimated $10.6 billion in state and local taxes in 2010, lack of identification prevents these residents from accessing services at essential institutions like banks, libraries, hospitals, and schools, forcing many to live on the fringes of our social, political, and economic life. Though pathways to citizenship remain stalled at the federal level, 13 cities across the country are taking the lead on immigration reform with innovative municipal ID programs that can foster inclusion and participation for their immigrant residents and other marginalized groups.

New Haven, Connecticut, led the nation by being the first to issue a city identification card in spite of xenophobic sentiments in the region. Now cities are not only issuing their own ID cards, they are building on this model in ways that help connect those who’ve been living in the shadows to services, resources, and opportunity.

“We are trying to get them out of the shadows so they can feel welcomed in our community and to participate,” says Newark Mayor Ras Baraka who will launch his own city-issued ID program July 1 (read the rest of his interview with Angela Glover Blackwell). “The immigrants who came to these communities actually helped stabilize [the local economy] by opening up stores and engaging in the economy, but they don’t get credit for it,” says Mayor Baraka. Although similar to other ID programs, Newark had to modify local laws to ensure undocumented entrepreneurs could benefit from the program. The city council removed the proof of citizenship requirement needed for street vendor licenses, expanding opportunities in the business sector.

Public safety, lack of access to social and government services, and marginalization are the concerns cities are trying to address with municipal IDs to not only improve residents’ sense of belonging to a community, but to spur local economic growth. When New Haven launched its Elm City Resident ID it did so to address these interwoven challenges. Undocumented immigrants in New Haven were perpetual targets of theft because it was generally known that they did not have access to bank accounts to deposit their checks. Targeted as “walking ATMs” for carrying large amounts of cash with them, most victims did not report attacks to police fearing that, not having a “valid” form of identification would reveal their undocumented status, and, possibly, place them on a path to deportation. Since the municipal IDs establish residency, questions about an immigrant’s status are no longer relevant. The city, however, must have an understanding with the police department about this crucial agreement. To ensure that immigrant residents could open bank accounts, New Haven also worked with several local banks who agreed to accept the cards as secondary proof of identification.        

Measuring the economic gains of municipal IDs

The economic gains of municipal identification cards have yet to be quantified. Since the launch of the first city ID in 2007 in New Haven, cities across the country have added new benefits and features to the card that can potentially have a greater economic impact on the local economy. The municipal ID in Oakland, California, for example, can also be used as a debit card. Although advocates are divided on this benefit due to the various fees associated with the debit card feature, it gets undocumented immigrants closer to accessing much-needed financial services.

Studies have shown positive impacts on the local social, political, cultural, and economic life for the communities that implement ID programs. About 10,000 New Haven residents were using the ID card by 2012. Crime decreased 20 percent in the first two years the card came out. And, most importantly, the card helped foster a sense of belonging among the immigrant population. The direct economic impact was more difficult to quantify. Only 60 people used the card to open bank accounts, but the card has been used by residents to get a bus pass and access other services that may improve economic mobility.

New York City is now the largest U.S. city to launch a municipal ID program. IDNYC, which launched January 2015, is hoping to quantify the economic impact of their program on the local economy. The program has had the largest turnout of any municipal ID program yet. On the first day, all 17 enrollment centers in the city processed more than 1,000 applications. Due to extraordinary demand, the enrollment system is now set up to process up to one million applications annually. As of June, over 250,000 New Yorkers have received an ID, and thousands continue to apply daily. “The main goal of this card was to become an access point to the different amenities and services that the city had,” said Nisha Agarwal, commissioner of NYC Mayor’s Office of Immigrant Affairs.

The card is proving to be a successful access point. It offers various discounts to city events (Broadway shows, sporting events), and free one-year memberships to the city’s top 33 cultural institutions. “Over 15,000 cultural institution memberships have been opened in New York City through May,” according to Agarwal. “There is a sense of an opening of doors and equalizing of access, even in respect to culture in New York City… We are hearing that these [new memberships] are working families for whom it would typically be too expensive to go to some of these institutions.”

In spite of these successes, New York City struggles with one of the original goals that launched the Elm City Resident Card in New Haven — connecting the unbanked immigrant population to the financial sector and resources. New York has not seen the same response to bank accounts as it has had to cultural institutions, according to Agarwal.

Read the rest of the June 26, 2015 America’s Tomorrow: Equity is the Superior Growth Model issue.

(cross-posted from Buzzfeed)

With a median household income of $110,292, Fairfax County, Virginia, is one of the wealthiest counties in the nation—but not all residents share in this economic prosperity. As its population has grown and diversified over the past 25 years, inequities in income and opportunity have also increased, and are experienced most by communities of color. The following statistics and graphs are taken from The Equitable Growth Profile of Fairfax County—a first-of-its kind analysis of racial and economic equity in Fairfax released June 18.

Read more on Buzzfeed>>>

Ensuring the economic success of women of color has never been more crucial to America's future. Though women of color make up a large and growing share of the workers, breadwinners, and entrepreneurs that are driving local and regional economies, they are consistently paid less than all other groups of workers — White women, men of color, and White men [see graph above]. Further, women of color are all too frequently employed in low-wage jobs that fail to provide family-supporting wages or basic benefits such as paid parental and sick leave.

"More than 70 percent of women of color are either the sole or co-breadwinner, making their economic security inextricably linked to that of their family," said Fatima Goss Graves, vice president for education and employment at the National Women's Law Center.

Tackling the disparities in pay and employment facing women of color will require policies at the national, state, and local level that link these women to the education, workforce training, business support, and work opportunities necessary to thrive. Several cities and states have taken pioneering steps to enact the types of policies and programs that lift up women of color workers, providing models for other local, state, and federal initiatives. These local successes center around four policy priorities:

(1)   Improve the quality and wages of low-wage jobs: Because women of color are disproportionately employed in the low-wage sector and live in or near poverty, strategies to raise the floor on low-wage work can have immediate impact for these women and their families. Effective policies to raise the floor include those that encourage workplaces to invest in their workers (e.g., programs that upgrade workers' skills and pay) or make it easier for workers to organize and collectively bargain for better pay and working conditions. "You are seeing some companies recognize the value of investing in their workers — that it is valuable for workers to feel good about their workplace and be able to fill their roles at home," Goss Graves said.

Policies that directly establish higher standards for wages and working conditions, such as increasing minimum and living wages, eliminating the sub-minimum tipped wage, and providing paid sick leave, child care supports, and retirement savings are also vital to increasing the pool of quality low-wage jobs. In September 2014, after a two-year campaign by community, labor, and civil rights groups, the Los Angeles City Council approved a living wage ordinance to raise the minimum wage for the city's hotel workers to $15.37 an hour. This will raise pay for 13,000 low-income hotel workers, most of them women and people of color. 

(2)   Create pathways for women of color to access good jobs: Women of color often face barriers to accessing "middle-wage" jobs that offer career pathways but do not require a four-year degree, such as those in construction or some health care. Targeted and local hiring policies for public investments can increase access to middle-wage jobs for women of color, as can workforce training strategies that connect women of color to apprenticeship programs and workforce training programs in high-growth industries.

The Washington State's Home Care Worker Training Partnership is the nation's first large-scale career pathway program for home care aides, training 40,000 aides a year in 200 classrooms across the state and online, providing instruction in 13 languages. The partnership runs the nation's first registered apprenticeship for more advanced training so that aides can increase their earnings and move up the career ladder.

(3)   Support women of color to become entrepreneurs: Despite many barriers to quality employment, women of color are the fastest-growing segment of entrepreneurs and job creators, numbering 1.4 million workers and generating more than $220 billion in revenues in 2013. At the same time, numerous studies show that women of color have a harder time getting business loans or equity investments than their White and male counterparts. Policies that increase access to affordable capital, support business development for entrepreneurs of color, and leverage government procurement policies to link women of color-owned businesses to government contracts are all effective strategies for supporting these entrepreneurs, and helping them create employment opportunities within their communities.

The New Orleans Regional Transit Authority has dramatically increased contracting with firms owned by women and people of color from 11 to 31 percent as part of a new commitment to equity.  

(4)   Ensure girls of color can succeed in school and access science, technology, engineering, and math (STEM) education and careers: Higher education (at least an associate, if not a bachelor's degree) is a critical stepping stone for success in the 21st century job market, but girls of color often face challenges accessing high-quality preK-12 public education and are more likely to attend schools that lack STEM-related courses. Many girls of color are also subject to overly harsh school discipline measures that result in disproportionately high rates of suspensions and expulsions, reducing their learning time and ability to thrive in school, according to Goss Graves. Policies to eliminate the use of harsh school discipline measures, increase access to high-quality public education and STEM courses, and supplemental programming that exposes girls of color to STEM-related skills and experiences are key to setting girls of color on a track toward later career success and financial stability.

Black Girls CODE is a San Francisco-based nonprofit dedicated to training and empowering girls of color to become leaders and innovators in computer science and technology. In the three years since its founding, it has served more than 3,000 girls ages seven through 17 and opened seven chapters around the country.

For more data on women of color in the economy, such as the percentage of people of color who earn $15 an hour or more, see the National Equity Atlas.

Read the rest of the May 15, 2015 America's Tomorrow: Equity is the Superior Growth Model issue.

The Bay Area is already a majority people-of-color region, and communities of color will continue to drive growth and change into the foreseeable future. The region’s diversity is a tremendous economic asset – if people of color are fully included as workers, entrepreneurs, and innovators. But while the Bay Area economy is booming, rising inequality, stagnant wages, and persistent racial inequities place its long-term economic future at risk.

Read more on Buzzfeed>>>

(cross-posted from The Hill)

The tax reform debate that will invariably accompany the 2016 campaign will undoubtedly include many of the same arguments from the right as we heard in 2012: too-high taxes on the wealthy are stifling economic growth; the poor “don’t pay taxes.” These conceits are still prevalent among Republicans — a report from Pew Research last month found that a third of Republicans feel that the poor don’t pay their fair share of taxes, while over half of them feel that they themselves pay too much.

The irony of such sentiments is that our tax system is holding our economy back — not because it hinders the wealthy, but because it favors them, and in so doing, furthers our nation’s growing economic inequality.  In other words, our tax code is supporting the rich to get richer, and the poor to get poorer.   While this may sound like added rhetoric, the numbers show how the status quo primarily benefits the wealthy.

To understand why this is, let’s take a look at actual tax expenditures — over a trillion dollars in tax revenue that is given back to taxpayers in the form of deductions, exclusions, favorable tax rates, and other subsidies. Over half of these expenditures, approximately $560 billion, are designed to incentivize certain activities such as buying property, investing in the stock market, or saving towards retirement.  The problem is however, that very few Americans can access these incentives – mainly just the wealthy.  That’s right, most of federal expenditures, dollars that would otherwise go to the federal budget, are being used subsidizing wealthy households.

In 2013, the top one percent of households received more benefits from these subsidies than the bottom 80 percent of households combined, according to a study by national nonprofit CFED. So while the average household in the top one percent could buy a car with an averaged $23,000 they take home each year in tax benefits, low-income households in the bottom 20 percent could just about buy a tank of gas at $77 per household.  So if you are part of the forty percent of Americans, and/or the two-thirds of people of color who don’t have enough savings to cover a short-term financial setback were your income to be interrupted, short of a couple tax credits such as the Earned Income Tax Credit (EITC), this year’s tax season won’t help you much. If you’re in the top 2 percent of earners, tax subsidies may help you get towards the 1 percent.  

Because the structure for incentives goes toward those who need it least, and largely leaves behind those that need it most, our tax policies are widening the wealth gap, and adding to already growing economic inequality.

And this inequality has a much broader impact on our economy than many would like to admit. Over the past few years, economists from the IMF, the OECD, even Morgan Stanley and Standard & Poor's have repeatedly documented the dampening effect income inequality has on our nation’s growth, with one analysis finding that our GDP would have been seven percentage points higher between 1990 and 2010 if income inequality hadn’t grown during the same period.  

So how can we build a tax code that promotes better economic mobility for all income levels? We need to take a hard look at the subsidies that we provide households through capital gains rates, deductions, and exclusions – a minute fraction of which ever reach low-income households and households of color.  On the other hand, we know that tax credits, such as the EITC or Child Tax Credit do, lifting millions of people out of poverty each year. We need to preserve and expand these tax credits, and create new, accessible credits that offer public matching funds (e.g. Financial Security Credit) or turn deductions into credits (e.g. home mortgage tax deduction). We can also support policy reforms that expand access to tax-incented savings through automatic enrollment in retirement funds (e.g. Automatic IRAs) and new products to promote savings (e.g. the President’s new myRA).  

So while candidates dust off their talking points on the debate around the carpet and drapes of our nation’s tax code (e.g., who pays higher tax rates) those who care about economic mobility for low and moderate income families should be advocating for an “Extreme Make Over: Tax Edition”: structural changes to our tax system that would put expenditures to work for all of us, not just the wealthy.

(cross-posted from Living Cities)

In order to achieve dramatically better results for low-income people, faster, we need to prioritize equity. Democratizing equity data is one step forward.

Living Cities is open sourcing our 2014 annual report, asking folks to respond to the question: “What will it take to achieve dramatically better results for low-income people faster?” This blog is a response to that question. In the coming weeks, we will showcase a diversity of points of view around this question. Learn more about the event and follow the conversation on social media with #NewUrbanPractice.

To see dramatic, sustained improvements in the life chances and outcomes of low-income people, we need to put equity—racial and economic inclusion—at the heart of our strategies for economic growth, competitiveness and prosperity. An inclusive growth model would produce many more good jobs and transform low-wage jobs into good jobs, while creating real pathways for those who’ve been excluded to participate in building a strong, sustainable, next economy. As communities of color become the new majority and the research proves that inclusion and diversity go hand-in-hand with economic strength, equity has become more than the right thing to do: it is an absolute economic imperative.

Data that is disaggregated by race/ethnicity and available at the regional level (and below) is a fundamental building block for advancing inclusive growth. Regions are the key economic units in the global economy and where equitable growth strategies need to be incubated and scaled. Data that describe and track the state of equity in regions can be the spark and fuel for inclusive growth strategies. But while data is now ubiquitous, it is often like Coleridge’s famous line: “Water, water, everywhere; nor any drop to drink.”

PolicyLink and the Program for Environmental and Regional Equity at the University of Southern California (PERE) built the National Equity Atlas to solve this challenge and put relevant data into the hands of those working to create more inclusive, resilient, prosperous regions. At the click of a button, you can access 21 field-tested indicators of demographic change, racial and economic inclusion, and the economic benefits of equity for largest 150 regions, all 50 states, the District of Columbia, and nationwide. You’ll also find downloadable and shareable charts, explanations of why the indicator matters for equitable growth, policy ideas and examples, and in-depth profiles for several regions.

We built the Atlas to democratize data and make it easy for you to understand, discuss, and use. We’ve seen how equity data can bring together new cross-sector collaborations, strengthen advocacy, and inform new policies and strategies:

• In Rhode Island, data revealing that communities of color are driving growth in the state yet face major barriers to economic opportunity inspired then-Governor Chafee to open a new Office of Diversity, Equity, and Opportunity focused on inclusive hiring and contracting in government jobs.
   
• In New Orleans (a Living Cities Integration Initiative partner), the stark data point that 52% of the city’s working-age black males—a total of 34,500 men—were jobless prompted Mayor Landrieu to launch an Economic Opportunity Strategy to connect these men to jobs coming online at the city’s major anchor institutions.
   
• In Denver and New York City, advocates used transportation equity data to build broader coalitions and expand transit access for communities of color.
   
• Cross-sector collaborations in Houston, Kansas City, Omaha, Southeast Florida, and in North Carolina’s Cape Fear, Piedmont Triad and Research Triangle, regions are using this data to craft shared narratives about the economic imperative of equity and inform regional development strategies.

 

Data itself is not social change. But data can power the bolder, smarter, more targeted strategies that America’s regions need to leverage their increasing diversity as an asset and secure a bright economic future for all of their residents.