Equity:  just and fair inclusion into a society where all can reach their full potential.

President Obama's $4 trillion proposed budget, which he delivered to Congress this week, includes elements that move the nation closer to achieving equity.  In its focus on place-based strategies to develop, improve, and sustain the communities where people live, in the tax-based efforts to relieve burdens and provide supports to working families, and in the commitment to rebuilding the nation's infrastructur—creating new jobs in the process—the President's budget reflects the words he spoke during his State of the Union address: "Expanding opportunity works...this country does best when everyone gets their fair shot."

Many of the programs in the FY 2016 budget are essential to ensuring opportunity for all. The millions of people searching for good-paying jobs will be aided by the creation of work supported through public/private investment funds, enhanced educational opportunities at the community college level, and the  $478 billion, six-year surface transportation reauthorization proposal to improve the nation's infrastructure, which—while creating new  jobs—will also improve roads, bridges, and transit systems that are critical for connecting struggling local economies to opportunity.

People of color and residents of low-income communities will also benefit from big investments in clean energy and the jobs those investments will produce. The expansion of the Earned Income Tax Credit (EITC) will put more money in the pockets of low-to-moderate income individuals and families and improve overall financial security  for over 13.2 million workers, boosting wages for 16 million families with 29 million children.  

Just as these programs provide support enabling low-income working families to succeed, others like Choice Neighborhoods— in the budget at $250 million; Promise Neighborhoods—at $150 million; and the Healthy Food Financing Initiative—nearly $50 million in combined grants from two government agencies—can enhance places, bringing much-needed opportunities, health and well-being, and services to communities too often left behind.   

Promise Zone tax incentives to stimulate growth and investments in targeted communities are proposed again in this budget. A new initiative would support innovation to help families reach the middle class. The Upward Mobility Project would allow selected communities to combine funds from existing block grant programs to test and validate promising approaches to help families become more self-sufficient, improve children's outcomes, and revitalize communities so they can provide more opportunities for their residents.

The President's budget could make significant differences in the lives of working Americans, and those struggling to work, especially those who are of color. With its subtext of building an all-in economy, where opportunity exists and everyone can realize their potential, it is one that will be debated and challenged.
Resources to propel us to a more equitable future will be a challenge, but one that we must pursue. The FY 2016 budget lifts up this nation's best values and honors the goal of realizing a just and fair future for all: equity.  
 

A quiet yet potentially dramatic change is happening in the world of government financial statements that could help cities advance an equitable growth agenda.

The issue at stake is business tax abatements: Every year, cities and states spend billions of dollars in decreased tax revenue by allowing some companies to pay lower taxes in exchange for creating or keeping jobs in the community. These tax abatements can be powerful tools for inclusive growth, if wielded correctly. In Austin, Texas, for example, Latino construction workers with the Workers Defense Project successfully campaigned for an ordinance that ties city tax subsidies to fair wages and other worker protections. They won a minimum wage of $11 an hour, a prevailing wage standard for specialized jobs, and tough safety standards, among other important benefits.

But tax subsidies can also be abused, costing cities millions of dollars with little to show for it. The challenge is that these deals are nearly always made behind closed doors without equity advocates at the table to make sure local residents get a fair shake. Too often, low-income communities and people of color don’t see any benefit from these costly incentives, while essential city services go underfunded.

Now, some of this is about to change. The Governmental Accounting Standards Board is drafting new standards requiring local governments to disclose the amount of tax abatements given to businesses, and what promises the businesses made in exchange. If approved, it will shed some light on the effectiveness of tax abatements as a policy tool to promote inclusive growth and help advocates and policymakers ensure future tax abatements have strong equity outcomes.

PolicyLink and the Pratt Center for Community Development jointly submitted comments on the proposed new standards, with recommendations on how they could be strengthened. Read our comment letter.

Learn more about tax abatements and the proposed standards from Good Jobs First.

(cross-posted from Rooflines)

In Tuesday night’s State of the Union address, President Obama laid out a vision for rebuilding the middle class with pathways to the middle for lower-income families. But to manifest this vision, we need a much stronger focus on addressing the root causes of concentrated, generational poverty: financial insecurity and lack of ownership.

In our work to build communities of opportunity where low-income people and people of color can thrive, we must acknowledge that income is how you get out of poverty, assets are how you stay out.

While income inequality in the U.S. recently hit its highest peak in 78 years, the wealth gap is even worse. The racial wealth gap—the difference in net worth between households of color and that of their white counterparts—has more than tripled since 1984. Today, African American and Latino households have less than $1 in assets for every $6 that white households own. This is taking place in the context of a major demographic shift that will only magnify the costs of the racial wealth gap. By the end of the decade, the majority of youth will be people of color, and by 2044, the population majority overall will be people of color.

Assets and ownership are fundamental to economic opportunity and mobility. A child with a savings account in their own name is 2.5 times more likely to complete college than a child without one. That number jumps to 4.5 times more likely if that child is from a low income household. Homeownership is linked to inheritance and access to credit, while access to credit is based on your income.

This is why all anti-poverty work should aim to result in financial empowerment and ownership. This doesn't mean that we all need to become experts in financial access, it does mean however, that regardless of the area of need—whether in health, education, housing, or serving the re-entry population—we should all have an eye toward connecting clients with partners who do have this expertise. For example, a bundled financial services model, such as those found in Financial Empowerment Centers, are available all over the country. Similar financial opportunity centers are hosted by the United Way and LISC and are helping low income people with a range of financial issues from job placement to credit or foreclosure counseling, benefits assessments, tax preparation and more. These practices have had incredible success in helping families master their financial situations.

The time has come to use a more integrated approach to delivering these services. This can happen from many angles. In the community economic development field, worker-owned cooperatives are on the rise, addressing the problem of both unemployment and lack of ownership. In the public health sector, public health departments are using referral systems to connect low-income parents of newborns to financial coaching through home visiting programs. State and local governments are opening savings accounts for enrolled students in order to incentivize early savings for college. Additionally, innovations in capital-raising for small businesses are reshaping the rules around who can and should be an investor in community businesses.

Chief Justice Louis Brandeis said it best, “We can have wealth concentrated in the hands of few, or we can have democracy, but we cannot have both.” The work of building an equitable economy in which all can participate and prosper cannot be complete if we provide jobs, but do not increase ownership. Helping low-income families master their financial positions does more than just balance their budget sheets. It changes a struggling person’s disposition with their finances—typically a large source of stress and shame. It frees up the mental energy that is typically spent battling financial issues and allows that person to plan for the future. Under our current political climate, particularly with Citizens United, addressing gaps in income and wealth now become an economic imperative as well as an imperative to uphold our democracy.

"The verdict is clear…expanding opportunity works," President Obama said in his State of the Union address Tuesday. "This country does best when everyone gets their fair shot."

An equitable economy, where all can reach their full potential, regardless of race, gender, immigration status, or zip code, is at the heart of the President’s vision of "middle-class economics."  Increasing economic security for working families and expanding access to the education and training necessary for the jobs of tomorrow will help rebuild the middle class by lifting up those so often left behind by today’s economy.

Though the economy has made a comeback for some, the benefits of growth and recovery are not reaching everyone. Those hit "first and worst" by the recession — millions of struggling families and low-income communities of color — are still waiting.  

According to new data from the Pew Research Center, between 2010 and 2013, the median net worth of African American and Hispanic households actually dropped by 34 percent and 14.3 percent, respectively. In 2012, the median wage for workers of color was $5 an hour less than median wages for White workers.

As America’s workforce rapidly becomes more diverse — by 2030, the majority of young workers will be of color — failing to create pathways of opportunity into the middle class for these youth will jeopardize the very existence of a middle class.

That’s why policies to tackle inequities in income and opportunity are urgently needed.

Moving forward with policies to raise wages and secure essential job benefits, such as paid sick leave, overtime protection, and retirement savings, will help workers provide for their families and save for the future.  President Obama’s proposed changes to the tax code will help low- and middle-income paychecks go farther and working family tax credits will put affordable childcare within reach. Investments in training and education will help the next generation of workers gain the skills necessary for good-paying jobs, whether through two years of free community college or employer-funded apprenticeships and on-the-job training.

By embracing equity-driven growth, the President has laid the blueprints for a brighter future, where everyone can contribute to and share in America’s success. We applaud the President’s policy agenda and encourage him to take immediate actions to create universally accessible pathways to opportunity.  Because policies that lift up those left behind don’t only strengthen the middle class, they build a stronger, more resilient economy for everyone.

Read the rest of the January 21, 2015 America’s Tomorrow: Equity is the Superior Growth Model issue.

Benefit corporations provide a way for businesses to make profit without having to slash wages or resort to environmentally destructive practices. Ben & Jerry's, for instance, is one of the world's most popular ice cream brands with an annual sales revenue of $132 million. Its lowest-paid worker makes $16.13 an hour, which is 46 percent above the living wage in home state Vermont, and the company offsets more than 50 percent of its greenhouse gas emissions. More than 40 percent of the board and management are from underrepresented populations, such as women, people of color, lower-income individuals, and people with disabilities.

In a time when U.S. corporate profits are soaring but wages remain stagnant, Ben & Jerry's and hundreds of other companies, including Cooperative Home Care Associates profiled below, are choosing an alternative business model – benefit corporations – driven not just by profits but also by fair working conditions, diverse leadership, and environmentally sustainable practice.

One of the fundamental challenges to growing more "triple bottom line" businesses is the legal requirement to maximize profits that applies to corporations. Anything that takes away from profits, such as higher wages or more sustainable environmental practices, leaves the corporation vulnerable to being sued by its shareholders. This limitation hinders companies from advancing any values beyond profit making.

In response to this limitation, a movement was started to pass legislation allowing for a new type of corporate entity called the benefit corporation. The benefit corporation provides legal protection for businesses that choose to treat their workers well, protect the environment, and invest in their communities, even if it means their annual profits are not as high. As of 2013, 19 states plus the District of Columbia passed benefit corporation legislation, including Delaware, which is home to 50 percent of all publicly traded companies and 64 percent of Fortune 500 companies.

In 2012, Ben & Jerry's took a step beyond being a benefit corporation and became a Certified B Corporation, as conferred by a nonprofit organization called B Lab. There are currently more than 1,000 registered B Corps. A Certified B Corp voluntarily meets higher standards of governance, workforce treatment, environmental impact, and community involvement. Companies must score at least 80 points on a scale of 200 to be eligible for certification.

Certified B Corps are part of a community of socially responsible companies and span a large spectrum of goods and services. In 2012, Cooperative Home Care Associates (CHCA) in the Bronx, New York, became the first home care company to become a Certified B Corp. Their overall B Score, at 154, is nearly twice the median score.

One of the reasons CHCA scores so high in the B Impact Assessment is because it is a worker-owned cooperative with the vast majority of the workers and worker-owners being from the Bronx. In an industry where good-paying jobs are hard to come by, CHCA deliberately chose a different business model, one that prioritizes workers over profits, and has flourished for nearly 30 years. The company has grown from 12 people to now over 2,000 employees, 70 percent of whom are worker-owners.

"When we started, a lot of for-profit home-care companies were established and were seen as a way of making a lot of money in a short time," said Michael Elsas, president of CHCA. "You didn't have to pay workers that much, you didn't have to train them that well, and you could move in and make a killing. And, in that environment we wanted to establish something a little different, more socially responsible."

Treating the workers well was not just a social mission, but it made good business sense. Elsas said, "Many of the people we were seeing were women, particularly women of color. The thought was if we train people longer and really spend time with them, if we prepare them for an entry-level position and get them ready to work and remove those barriers to work, and, if we provided a lot of support for those workers both before and after they were trained by us, we could create quality, full-time jobs. And then as a result of that quality job, we would be providing quality care that we could, in fact, provide better services."

CHCA has been a co-op since the company started in 1985. Going from a co-op model to also certifying as a B Corp was an easy decision and made a lot of business sense, Elsas said. "Distinguishing ourselves as a B Corp would be helpful in marketing to be able to say we are the only B-Corp certified home care company. We thought that would be helpful for those entities that want to do business with a B Corp. Quite honestly, it was a natural for us. There was very little that we had to do to get certified because we were already a worker-owned company, we already had everything in place."

Elsas said that CHCA is successful not because it is a co-op but because of the best practices they employ. Currently, 90 cents of every dollar that comes into the company goes to the worker. While paying workers less would result in higher profits and better dividends, Elsas said higher dividends is not what has made the company successful for 30 years. Instead, what makes CHCA successful is "how we train, how we supervise people, how we respect people, how we let people participate in what we do."

Companies like CHCA and Ben & Jerry's show that businesses can make a profit and embrace socially responsible practices. Higher wages and better work environments help working families reach economic security. Consumers can support B Corps and environmentally and socially conscious businesses by buying their products and services. A full list of B Corps can be found here.

(cross-posted from the Spotlight on Poverty and Opportunity)

Tax policy was in the spotlight in the final weeks of the 113th Congress as President Obama threatened to veto a $440 billion tax package due to the dearth of benefits for working families. And with the president planning to discuss the issue in the State of the Union address, tax reform promises to be a topic of debate in the 114th Congress as well.

While negotiations over tax code intricacies may be off of the radar of most anti-poverty advocates, funders, and practitioners working outside of the Beltway, tax policy couldn’t be more relevant to those who care about income and wealth inequality and the growing financial insecurity of low- and moderate-income families.

Tax policy, while a crucial tool for collecting government revenue, also subsidizes households to build wealth. But the benefits are often ineffectively targeted and inequitably distributed. Reforming the tax code could lift families out of poverty and help more people build wealth and invest in their future.

In 2013, the U.S. tax code provided more than a half-trillion dollars of tax-code-based subsidies to support individual households to build wealth in the form of deductions, credits, exclusions and preferential rates. Economists and policymakers call these subsidies “tax expenditures” because they’re a form of spending through the tax code—like direct spending programs, they provide financial assistance to support specific activities.  

However, the majority of the benefits accrue to the wealthiest Americans. For example, the national nonprofit CFED found that the top 1 percent of households received more benefits from these tax subsidies than the bottom 80 percent combined, and the Tax Policy Center found that 70 percent of tax savings from mortgage interest, property tax deductions, and employer-based retirement savings goes to the top 20 percent of households.

With such an inequitable distribution of benefits, public funds are not only subsidizing wealth building—they’re fuelling inequality. But why aren’t lower-income households benefitting?

Part of the answer lies in the benefits’ structure: A household that doesn’t itemize on their tax returns – and fewer than one-third do – can’t access the benefits of the home mortgage deduction or deductions for college tuition and expenses. A worker whose employer offers no benefits can’t access tax subsidies associated with saving in an employer-based retirement plan. Households without resources to invest in stocks and bonds can’t access the benefits of reduced tax rates on dividends and capital gains. And the list goes on.

Some tax expenditures aim to serve a worthy public goal, but are ineffective as currently structured. For example, research shows that the more than $100 billion in tax expenditures designed to encourage retirement savings had little impact on net savings, due to the fact that wealthier households were shifting existing savings into tax-favored accounts rather than increasing their overall level of savings.

Tax expenditures affect low and moderate-income households in other, detrimental ways. Each dollar that the federal government doesn’t collect when a taxpayer claims a deduction, credit, exclusion, or low preferential rate reduces federal revenue. In a tight budgetary environment, lower revenue means more political pressure to cut spending on federal programs that benefit lower-income families.

If tax expenditures are unfair, inefficient, and costly, one would think that more of us would be clamoring to change them.  But most tax expenditures are hidden from public scrutiny. Unlike direct spending programs, they’re not part of the annual budget and appropriations process, with the exception of refundable credits, so they aren’t subject to the public scrutiny given to direct spending programs.

By now, you may be asking what anti-poverty advocates can do. A first step is to connect with coalitions that are leading a call for change. The Tax Policy Project, which I direct, is one such effort. This national initiative was launched in 2013 by a network of foundations and is now co-led by the national nonprofits CFED and PolicyLink. The project is supporting a growing coalition of equity advocates, researchers, tax policy experts, and organizations with deep roots in low-income and communities of color who are calling for a more inclusive, progressive, and equitable tax code.  

Together, we’re working to advance several types of changes.

We know most low-income households and households of color don’t benefit from deductions, exclusions and preferential rates; but they do benefit from tax credits, especially if they’re refundable.

Accordingly, Tax Policy Project participants are calling for the preservation or expansion of existing refundable credits (e.g., the Earned Income Tax Credit, Child Tax Credit and American Opportunity Tax Credit); making existing credits refundable (e.g. Saver’s Credit); creating new, accessible credits that offer public matching funds (e.g. Financial Security Credit) or turning deductions into credits (e.g. home mortgage tax deduction).

Finally, we’re supporting policy reforms that expand access to tax-incented savings through automatic enrollment (e.g. Automatic IRAs) or new, accessible products (e.g. the President’s new myRA).

Engaging in the intricacies of tax policy debates may be a daunting undertaking for anti-poverty advocates, but the stakes are too high to sit on the sidelines. As we move into the 114th Congress, it’s critical for everyone concerned about wealth inequality and the financial insecurity of lower-income households to call for policies that enable all households to save and invest—in themselves, their families, and a growing national economy. 

Heather McCulloch is the director of the Tax Policy Project, a national initiative co-chaired by CFED and PolicyLink.

In the heart of Silicon Valley, parents drive their children to the library nightly so they can get on a computer with Internet access to do their homework.

In New York City, many public housing residents have no high-speed broadband in their homes.

In Florida, migrant families spend all of their income on rent and food, leaving nothing to pay for a computer and Internet service at home.

Today, one in four U.S. households—about 80 million people—remain on the wrong side of the Digital Divide and are being left behind at an accelerating pace.  We know first-hand from being in the trenches that the most disadvantaged populations and impoverished neighborhoods are up against a "wall of poverty" that demands action from all of us, including FCC Commissioners as  they review mergers of  the nation’s largest Internet service providers.

Nearly half of U.S. households earning less than $30,000 a year do not have high-speed Internet at home.  Research shows without home access:

• it takes 25 percent longer to find a job;
• students have lower graduation rates;
• managing personal health is more difficult; and
• breaking out of poverty is nearly impossible.
   

Please help us knock down the “wall of poverty” by urging the FCC Commissioners to require consolidating Internet service providers to deliver affordable broadband to all low-income households.  Comcast offers a $9.95 a month Internet Essentials plan for low-income families with K-12 students, but there are few, if any, discount programs for low-income seniors, people with disabilities and veterans.

In more than three years, Comcast has enrolled just 14% of eligible families with schoolchildren in the  Internet Essentials program.  Should the merger be approved, half of the nation’s school children will be eligible for the program.  Tell the FCC 14% isn’t good enough and, if it approves corporate consolidations, all low-income households should be eligible.

You Can Make a Difference Right Now!

Go to the Take Action page or Text 'Internet4All' to '52886' and send a message to the FCC.

Tell the FCC, if it approves the Comcast-Time Warner merger, it should require the company to:

• expand affordable Internet service to ALL low-income households;
• enroll 45 percent of eligible households in the next two years;
• donate to independent funds for nonprofits, libraries, and schools to sign up households;
• report to an oversight committee; and
• offer affordable Internet service as a stand-alone program.

Sunne Wright McPeak is the President and CEO of the California Emerging Technology Fund (CETF), a statewide non-profit organization whose mission is to close the Digital Divide by accelerating the deployment and adoption of broadband.

When I was a kid, my Chinese parents used to say to me (as they sat me in front of my homework while my white friends were out playing), “You not White!  You work twice as hard to be equal!”  That just made me roll my eyes at their naïveté.  After all, this was America, the land of equality. 

Fast forward to becoming a single mother looking for work. My college degree didn’t help in the small town where I was living, so nearly a year into my search, I decide to apply for a job at Dunkin’ Donuts.  The manager interviewing me said with a gleam in his eye, “You Chinese are good workers, aren’t you?”  And suddenly, the light dawned:  it was me, not my immigrant parents, who was naïve and I would indeed be expected to work twice as hard as the other “girls” for the same pay.  I later discovered that many other children of color had gotten the same message from their parents. 

My parents experienced racial politics before the Civil Rights era.  So “twice as hard” must be past history, right? Didn’t we solve racial inequality in the 1960’s, or at least begin closing the gap with all deliberate speed? Well, no! The inconvenient truth is that while the income gap between Whites and African-Americans has narrowed somewhat — Black income has inched up to 65 cents to the White dollar — the Black/White wealth gap quadrupled over the last generation, according to a study that followed the same families between 1984 and 2007.  If you lined up the Black families and the White families in the study by the amount of wealth they held, the White family had $100,000 more than the Black family. Not only that, but by 2007, higher-income African Americans had less wealth than middle-income White Americans.

And the “Great Recession” made it worse.

By 2010, while the typical family in every racial group had lost ground (with income and wealth growth benefiting only those in the top 1 percent), people of color had lost more than their White counterparts. The typical African-American family now has just a nickel for the dollar owned by White families, Latinos have seven cents, and Asian Americans have seventy cents.
 

It is the inequality of wealth that is the key that unlocks the mystery of the persistence of the racial economic gaps that are with us today.  Owning assets means you can weather financial storms, live in neighborhoods of opportunity, invest so that your money will grow, stop working when you’re old, and give your children a jump start on their own lives. Just think how many more options a family has with an extra $100,000!  And when it is mainly White families who have passed and will pass those extra assets along generation after generation, the racial divide inevitably continues to be the dominant feature of our economic and social landscape. 

But why such big gaps? Some believe that we now have a color-blind society, so lacking resources must be the person’s own fault.  Others cite continuing prejudice leading to discrimination as the reason for the gap.  Both of those rationales place the responsibility on individual attitudes and behaviors.  Both miss the mark.  Over the course of U.S. history, governmental policies have been responsible for creating the inequality that is a blight on our democracy and economy.

Land and access to natural resources, the basis of all production — and therefore wealth —were taken away by force and fraud from the American IndianS by the colonists from Europe.  The enslavement of Africans meant that they could not own anything, nor even earn an income: they themselves were counted as financial assets by their owners, just as stocks are counted by the wealthy today.  The U.S. invaded Mexico in 1846 because they wanted to expand, and expand they did. Through conquest, two-thirds of Mexico was annexed at the end of the war in 1848.  While the Statue of Liberty beckoned to immigrants from Europe, her light was turned off for those coming from Asia:  only Whites could become citizens and enjoy rights, including the right to ownership.  

“Work twice as hard to be equal” was stated to me as a simple fact.  The fact is that racial inequality, like race itself, is a reality created by the policies of the U.S. government.  But if one equals one for Whites, and if we believe that all people are created equal, should two equal one for non-whites?  That’s bad math.  That’s bad policy.  And that’s bad for our nation’s economy and democracy as a whole.
 

This post was written by Meizhu Lui, co-author of The Color of Wealth: The Story Behind the U.S. Racial Wealth Divide

How can poor rural communities escape poverty? In her acclaimed 1999 book, Worlds Apart, author Cynthia Duncan examined rural inequity through detailed portraits of communities in Appalachia, the Mississippi Delta, and northern New England. In a newly released second edition, she revisits these places and finds each confronting new challenges, including new political leadership, economic restructuring, and pervasive drug addiction. With a new foreword by PolicyLink Founder and CEO Angela Glover Blackwell, Worlds Apart: Poverty and Politics in Rural America shares new insights on the economic, demographic, and political realities reshaping poor rural communities. Duncan spoke with America’s Tomorrow about what she learned in going back to these rural places 20 years later.

What does your book tell us about poverty in rural America?

Like poor urban families, the rural poor are socially isolated, cut off from participating successfully in the mainstream — in school or the workplace, in civic life. Perception of poverty is wrapped up in ideology. Those on the right say it is all about bad decisions, bad behavior that cuts off opportunity. Those on the left say it is all about larger systemic problems, like racism, sexism, how opportunities for education and work are distributed across places and across classes. Worlds Apart shows how people’s decisions and behavior are shaped by the community and environment they are growing up in — not just their own immediate family and networks, but also the politics of the community and the way in which the powerful prevent change and opportunity.

How do power and politics shape opportunity in the places you studied?

In poor rural communities political power is tightly held by the few families who control the jobs and own land and other resources. The status quo works for them, so they prevent change that might bring new opportunities and they look out for their own families rather than investing in the whole community. For example, in the Mississippi Delta, everyone could name the few White families who ran things in the 1990s. Their grip was very tight on jobs, political office, everything. They made things hard for people who wanted to help the Black community and sought to bring about change. They could blackball those who dared to challenge their economic and political control.

But when you went back, things had changed.

When I went back in 2013, casinos had come to the Delta area, bringing jobs in housekeeping and restaurants as well as gaming tables. These new employers broke up the stranglehold that the White farmer families had over jobs. Twenty years ago, it was hard for a Black candidate to win elected office, despite the fact that 75 percent of the population was African American. In 2012 all the county supervisors elected were African American. Several of these leaders have been working with young people for decades, coaching and mentoring. Now they no longer face harassment and they control significant revenue from the casinos. If they can bring current spending under control, they can invest more in the Black community.

Everyone, White and Black and even the Catholic sisters, would say that the coming of the casinos opened up opportunities. Nonetheless, the legacy of racism and lack of educational investment is deep. The schools still struggle, and poverty is 30 percent today. The new leaders face huge obstacles as they try to take advantage of the jobs and revenue the casinos bring.

Are jobs the key to ending poverty and racial inequity in rural America?

The availability of jobs that pay a decent, family-supporting wage has a profound impact on not just individual livelihoods but also the way the whole community works. We’ve seen this across the country. Communities are struggling to adapt to the restructured economy, find new economic activity and jobs, and, this adjustment is happening at the same time that we’ve cut back on public investment in education and other institutions that can provide people the skills to do the middle-skill jobs that are now available. Jobs that pay decent wages are important, but so is investment in human capital and the institutions where it is acquired.

What else is needed?

Economic development in really remote places is very tough. But we can provide quality early childhood education and do more to support decent schools. Great research shows that providing early childhood education and support for fragile families in the long run really pays off.

Economic diversity also is important because it both protects against downturns and generates a more equitable, politically inclusive community overall. A more equitable community has greater trust, a stronger civic culture of cooperation and investment in inclusive institutions. New business and industry are attracted to communities that work for everyone and are not burdened with high poverty.

What did you find in the other communities when you revisited them?

The mills are gone in the northern New England community, but the civic culture is intact, and people still work together and are generally inclusive. Like much of rural America, the new jobs are as prison guards, in recreation facilities that attract outdoor enthusiasts, in the health-care and education sectors, in green energy projects. Fewer jobs that pay less, but provide some stability.

In the coal community one young man we interviewed in 2013 who had been a miner said that while it is not easy to let go, there is no denying that "coal is over." He now earns half what he did as a miner working for the county as a groundskeeper. You have Friends of Coal stickers and license plates everywhere, pushed by outside coal promoters, but jobs are way down and people are leaving. I found outmigration, pervasive painkiller addiction, high dependence on disability, and those who stay hunkering down with family for mutual support in a job-scarce community.

How are demographic changes playing out in rural areas?

We’re seeing a growing diversity across rural America, especially Hispanic newcomers. It is a very positive sign, not just because of demographic and economic growth, but for the vitality and energy coming into communities where coffins have been outnumbering cradles, as demographer Ken Johnson puts it. While there have been tensions, there are also great examples where newcomers are wrapped into the community through library programs and soccer teams.

There also have been important positive impacts with the return of African Americans in communities throughout the rural South. Their experiences and education elsewhere prepared them to become community and political activists. They saw a world where there was greater opportunity and more democratic politics, and they brought that back with them.

What are the lessons for rural America and the country as a whole?

Much of rural America is really struggling these days as the economy continues to change and communities try to adjust to new conditions, fewer jobs, less revenue to invest in infrastructure and local institutions. Communities that are inclusive and invest in public institutions that serve people from all social classes, that have a rich civic culture, offer a better life not only to the poor but also to the middle class.

When a community is more equitable, then everybody wins.

Read the rest of the January 8, 2015 America’s Tomorrow: Equity is the Superior Growth Model issue.