(Originally published on Bloomberg Businessweek; written by Peter Coy)

Early this year, before the summer weather in Ferguson, Mo., turned to a fog of tear gas and a hail of rubber bullets, before the downscale suburb began to share national airtime with Sierra Leone and Iraq, a legal aid firm called ArchCity Defenders prepared a white paper that accused several municipalities in St. Louis County of stopping black drivers disproportionately for traffic violations, fining them in court sessions that were closed to the public, and jailing them when they were unable to pay. Singled out as “chronic offenders” were three neighboring towns in the northern part of the county: Florissant, Bel-Ridge, and Ferguson.

The untitled paper was still sitting in Executive Director Thomas Harvey’s computer on Aug. 9, awaiting finishing touches, when Michael Brown, an unarmed black 18-year-old, was shot dead by Darren Wilson, a white Ferguson police officer.

Who’s to blame in the confrontation that led to Brown’s death has yet to be sorted out. But the ArchCity Defenders report is the clearest evidence to date that Ferguson’s justice system was discriminatory in practice, if not intent, long before the police force’s heavy-handed response to the riots that followed the fatal shooting. Harvey and his co-authors found that middle-class drivers stopped by police routinely hire lawyers who knock speeding tickets down to non-moving violations; poorer drivers, mostly black, who can’t afford lawyers, often find themselves caught in a downward spiral. They get points on their licenses, they can’t afford their fines, they’re jailed, they lose their jobs, they drive with suspended licenses and get into deeper trouble.

One can question ArchCity Defenders’ blunt claim that “defendants are incarcerated for their poverty.” It’s harder to dispute the defense attorneys’ warning that Ferguson’s practices “destroy the public’s confidence in the justice system and its component parts.”

The rioting and looting in Ferguson are plainly wrong in every respect, but they’re taking place in a society that plainly isn’t working. “This has to be recognized as a symptom of a larger problem,” says Vernellia Randall, a retired University of Dayton law professor. “Every time we see a racial disparity somewhere, we think that it’s an isolated issue—racial disparity in criminal justice, in health care, in loans for cars. This will go on as long as we refuse to recognize that there’s a system and [don’t] work on getting rid of the system.”

Many Americans, especially whites, comfort themselves that the U.S. has become a post-racial society. Not Ferguson, which is 67.4 percent black, 29.3 percent white, and only 3.3 percent everything else. The variegated national reaction to the events in the St. Louis suburb also gives the lie to the post-racial myth. Eighty percent of blacks surveyed nationwide by the Pew Research Center said the Brown shooting “raises important issues about race that need to be discussed.” Only 44 percent of whites felt that way. Twice as many blacks as whites told Pew the police reaction to the protests “has gone too far.”
 
Ferguson has captured the nation’s attention because people sense that other towns and cities suffer some of the same dysfunction. That said, St. Louis County is not America writ small. A unique history of fragmentation and exclusion exacerbates its racial stress. The map of the county looks like a shattered pot, broken into 90 municipalities, along with clots of population in unincorporated areas. Dating as far back as the 19th century, clusters of people set themselves up as municipalities to improve services, or to capture control of tax revenue generated by local businesses, or to avoid paying taxes to support poorer neighbors, or in some cases to exclude blacks.

The natural result is a county whose towns are highly stratified by both race and income. The wealthier southern part remains largely white. The northern section in the elbow of the Mississippi and Missouri rivers, the home of Lambert-St. Louis International Airport and Ferguson, is increasingly black. Some towns in the north have managed to maintain a stable racial mix. Often, though, as blacks move into a town, whites move out. The tax base shrinks, and blacks feel cheated that the amenities they came for quickly disappear, says Clarence Lang, a University of Kansas historian who has studied St. Louis. Class interacts with race. In Ferguson, investors who bought foreclosed homes are renting them to poorer people than the homeowners—both black and white—whom they’re displacing. That’s one reason Ferguson’s median household income adjusted for inflation fell 25 percent from 2000 to 2012, to less than $36,000 a year.

Michael Brown was educated in the underperforming Normandy School District, which lost accreditation last year and is being operated by the Missouri Department of Education. Neighboring school districts have fought accepting Normandy students as transfers. “It may take a village to raise a child, but many administrators and parents in better-resourced parts of our region had no problem saying quite publicly that Michael Brown and his brothers and sisters did not belong in their village,” the black-owned St. Louis American weekly wrote in an editorial. “There is a real story here about what happens when people feel they’re doing the right thing for their families, and they get stopped or slapped in the face,” says Angela Glover Blackwell, a St. Louis native who is founder and chief executive officer of PolicyLink, a nonprofit in Oakland, Calif.

Fragmentation has another pernicious effect: It pits towns against one another. Businesses choosing where to locate can play the tiny municipalities off one another for tax incentives, prompting a race to the bottom that robs them all of desperately needed revenue. “There’s a tremendous opportunity and incentive to just poach from one municipality to another,” says University of Iowa historian Colin Gordon, author of Mapping Decline: St. Louis and the Fate of the American City.

Once a municipality is formed, however small, it’s exceedingly difficult to merge it away. Ferguson is comparatively large at about 21,000 people. Many St. Louis County municipalities have fewer than 1,000; the town of Champ had a 2010 population of 13, all white.

Ferguson is not a crime-ridden economic disaster area like East St. Louis, Ill., on the other side of the Mississippi; it’s lower-middle-income, with a healthy business district and a range of big, close-by employers, including Emerson Electric (EMR), Express Scripts (ESRX), the University of Missouri at St. Louis, Christian Hospital, and Mallinckrodt (MNK). It also benefits from a reasonably enlightened business community. John Gaskin III, a spokesman for the St. Louis County NAACP, is no pushover. He calls Missouri “the most racist state in the country.” But he praises the leadership of Emerson, Boeing (BA), and others. Patrick Sly, who heads the Emerson Charitable Trust, “is one of the most genuine men that you could meet in this town,” Gaskin says. And Danny Bradley, who runs Boeing’s diversity program for St. Louis, is “a gentleman.”

The problem, rather, is that greater St. Louis is locked into a pattern of inequitable development. Iowa’s Gordon writes that St. Louis is “by any measure, one of the most depopulated, deindustrialized, and deeply segregated examples of American urban decay.” Fragmentation “is not the principal cause, but it certainly fed into what’s happening in Ferguson,” says Robert Cohn, author of The History and Growth of St. Louis County, Missouri.

Because of Missouri’s tax laws and political fragmentation, Gordon says, “there is a huge incentive to build the next great mall in the cornfield, because you all of a sudden capture the tax revenue from it. It’s something that everyone recognizes as an insane beggar-your-neighbor policy.” Employment in white, historically rural St. Charles County, to the northwest, has grown about 600 percent since 1990. 
For greater St. Louis, the original sin was committed in 1876, when the city split itself off from the hinterlands of St. Louis County. It seemed like a good idea at the time, because the city was thriving. But from that point on, the city of St. Louis was hemmed in. It couldn’t expand by annexation to capture people as they fanned out from the central city. People who moved to then-rural St. Louis County formed the patchwork of municipalities that exists to this day. Many of those small communities tried to keep blacks out with restrictive covenants on deeds.

In 1948 the U.S. Supreme Court ruled in a case that originated in St. Louis that such covenants were unenforceable by states. The case, Shelley v. Kraemer, was argued for the black home buyers by Thurgood Marshall, who later became the high court’s first African American justice. In redlining, another technique for keeping blacks out, lenders marked certain neighborhoods as unsuited to black buyers. A “residential security” map created in 1937 by the Home Owners’ Loan Corp., a government-sponsored agency, gave its lowest rating, D, mostly to areas where blacks were a majority. The HOLC said houses in one neighborhood had “little or no value today, having suffered a tremendous decline in values due to the colored element now controlling the district,” according to a 1980 article by Columbia University historian Kenneth Jackson.

Overt financial racism is mostly gone, but the legacy of that time lives on, suffocating present-day residents. “There’s a very real sense in which resources for living a healthy, productive life aren’t evenly distributed throughout the region,” says Jason Purnell, a Washington University in St. Louis professor of public health.
 
Three hundred twenty miles east of Ferguson, 19-year-old Timothy Thomas was shot dead in a dark alley in Cincinnati on April 7, 2001, while fleeing an arrest warrant. That made him the 16th black man killed in a confrontation with Cincinnati police in six years, against zero whites during the same period. Protesters demanded information about the shooting, but police said their investigation was incomplete. Riots broke out on April 9 in the largely black Over-the-Rhine neighborhood and spread to other poor areas. More than 100 businesses suffered damage over four days.

The unrest galvanized Cincinnati to change. Under a court-ordered federal monitor, an independent review board was formed to investigate uses of serious force by police. Officers had to fill out contact cards for vehicle stops that specified the race of the drivers. “They’re clearly a lot better,” the Reverend Damon Lynch III, who led calls for a boycott of downtown Cincinnati, told the Cincinnati Enquirer in 2011. Representatives from Cincinnati have even been invited to advise Ferguson on how to heal. Meanwhile, juice bars and condo developers have flooded into Over-the-Rhine, an architectural treasure chest built by German immigrants in the 19th century. The riot zone has come so far, the biggest concern now is gentrification.

In Ferguson, development would be welcome, but residents say fixing the Ferguson Police Department is their most urgent priority. “All the anger is coming from this initial killing and the officer not being held accountable,” James Long, a 46-year-old from nearby Berkeley who’s self-employed in lawn work, said while walking along West Florissant Avenue behind protesters chanting “Hands up! Don’t shoot!”.

Police made matters worse by going RoboCop on the protesters. Militarization violates the ideals of “policing by consent,” a philosophy that goes back to the first police commissioners of the metropolis of London in 1829. The Londoners asserted that “the power of the police to fulfil their functions and duties is dependent on public approval of their existence.”

Ferguson needs more than three black officers on a force of 53. The ArchCity Defenders study found that 86 percent of vehicle stops involve a black motorist, even though blacks make up only two-thirds of the population. After being stopped, blacks are twice as likely to be searched, even though searches of blacks discover contraband only two-thirds as often as searches of whites, the study found.

Helping white officers and the young black men they confront understand each other seems like a soft solution to a hard problem, but it’s a prerequisite to fundamental change, says Amy Lazarus, executive director of the International Institute for Sustained Dialogue in Washington, who in a previous career trained white police recruits to work in mostly black neighborhoods. “We forget that our neighbors want the same thing we do: a safe place to live and work and play.”

Change needs to come from the top as well. A year ago the economic development arms of St. Louis city and county agreed to stop competing and merge efforts. But ideas to reincorporate the city and county governments have been floated repeatedly over the past century, and all have failed. Whites often oppose consolidation because they fear their tax bills will go up, while blacks who have managed to obtain positions of authority fear that a merger “could easily sweep away those gains,” says Lang, the Kansas historian.

It says something good about the U.S. that the travails of one small suburb have riveted the nation’s attention. But change is hard. Neither shouting for the cameras nor participating in candlelight vigils accomplishes much. Hard choices will have to be made. “Lose the preconceived narrative. Ask questions to understand first,” counsels Dr. Chris Schlanger, an emergency-room physician who teaches at Washington University’s Olin School of Business. “If we want to change, let’s change. Otherwise, save the candles.”
 

Transportation projects should connect communities to opportunity, but too often new roads and rail lines have isolated low-income people and devastated the economic prospects of neighborhoods of color. That's why diverse communities in the Twin Cities fought tenaciously to make sure the new $1 billion Green Line creates jobs and business opportunities for residents, links low-income neighborhoods of color to employment centers, and strengthens local businesses along the route.

"An infrastructure investment is not just about trains and rails," said Joan Vanhala, coalition organizer for the Minneapolis-based Alliance for Metropolitan Stability. "It's about people and their communities. It's about valuing, respecting, and investing in the unique characteristics that people and communities bring to the table."

The story of the Green Line demonstrates what's possible when residents, advocates, and public officials work through tensions and develop a collaborative, transparent approach to building transit that advances equity. The story also illustrates the challenges of improving long-struggling neighborhoods without pricing out families and small local businesses. As the United States invests billions in transit construction, including new or expanded light rail systems in cities from coast to coast, the story offers important lessons in how to build it right.

Organizing for equity

The 11-mile Green Line, opened in June this year, links the downtowns of St. Paul and Minneapolis and other employment hubs, including the University of Minnesota and the state capitol. With an average weekday ridership of 30,000 in the slow days of summer, the line is already exceeding projections. The area's largest infrastructure investment ever, it is projected to spur $6.7 billion in public and private development over the next 20 years.

Like light rail projects from Baltimore to Seattle, the Green Line traverses some of the lowest-income and most diverse communities in its region. These include large Somali and Hmong communities and Rondo, the historic heart of St. Paul's African American community. Rondo is a place emblematic of the economic and social fractures caused by inequitable infrastructure investments. The last major transportation project in the city — I-94, built in the 1960s — cut through the neighborhood, demolishing hundreds of homes and businesses, displacing thousands of residents into a discriminatory housing market, and hurting economic growth to this day.

That history propelled residents to action when they saw the initial plans for the Green Line. It was to bypass Rondo and other transit-dependent St. Paul neighborhoods, with stations a mile apart instead of the half-mile standard along the rest of the route. To secure access, a grassroots coalition, Stops for Us, fought for three more stations.

"People wanted the train to actually stop for them in their neighborhoods and they wanted to use it as a catalyst for economic development," Vanhala said. Community-organizing efforts led to public meetings, packed hearings, a civil rights complaint, and a lawsuit. After three years, the coalition won the stations — and more.

The campaign led to a change in federal policy on how federal New Starts transit investments are evaluated. No longer would projects be assessed strictly as a way to move commuters into the city but also on their potential to revitalize neighborhoods by making them accessible destinations for shoppers and visitors.

The campaign, which brought together the historic African American community and the newer Asian immigrant communities, also created a model for alliance building across neighborhoods, race, and ethnicity. "We had to build trust among ourselves and the only way we could do that was to talk explicitly about race and the inherent racism within our built environment," Vanhala said.

Finally, the victory of the stations set a tone of economic inclusion for all aspects of the Green Line, from hiring and contracting to supporting small businesses during construction, to building affordable housing in long-struggling neighborhoods poised to rebound.

"We didn't want to win one victory and see everybody fold their hands and go home," said Veronica Burt, public policy advocate and cultural organizer for JUST Equity, an organizing project of African American racial equity proponents in the Twin Cities. "We wanted to emphasize the importance of having comprehensive equity outcomes."

Inclusive hiring and contracting

Fair hiring and contracting were prime equity outcomes on a project creating 150 design and engineering jobs, 5,000 construction jobs, and a $252 million payroll. The issue was especially critical in a region with some of the worst workforce racial disparities in the nation. Before construction got underway, unemployment rates among people of color living along the Green Line ranged from 9.4 percent to 24 percent, compared with 6.3 percent for whites.

Transit officials initially set a minority hiring goal of 11 percent. The community, along with Ramsey County Commissioner Toni Carter, successfully pushed for 18 percent and with the support of a coalition called Hire Minnesota, the Green Line met and in some instances exceeded that. It happened in large part because of the partnership that formed — and evolved — among all the stakeholders: transit officials, unions, community leaders, workforce advocates, faith groups, and more.

This led to innovations that facilitated transparency and accountability, including a web-based tool to track hiring by trade in real time, and searchable databases of construction job openings and available workers. A broad-based committee provided strong oversight.

Building in part on these innovations and on the public attention to workforce inclusion, the Minnesota Department of Human Rights in 2012 raised minority hiring targets to 32 percent for state-funded construction projects in Minneapolis and St. Paul and 22 percent for projects in the wider region. A high-profile construction project in the area, the $975 million Minnesota Vikings stadium scheduled to open in 2016, is reportedly meeting its goals.

The Green Line also exceeded its goal of 15 percent for construction contracting — disadvantaged businesses represented about 20 percent of construction and design activity. With the books still open on the project, more than 135 disadvantaged businesses in Minnesota have earned a total of $115 million.

The opportunity was transformative for local contractors like Beatriz Mendez-Lora. A solo electrical consultant, she hired three people to fulfill her Green Line contract and now has her sights set on even bigger jobs in Minnesota and beyond

"Instead of limiting the amount of work that one person can handle, I am now pursuing multiple projects in both the transit/transportation market and the environmental municipal market," she said.

Supporting small businesses

More than 1,000 small businesses — many of them owned by people of color and immigrants — operate along the Green Line. Their ability to survive through construction and thrive afterward has been another important economic goal. The two cities collaborated with the Central Corridors Funders Collaborative and community partners in developing a $16 million package of forgivable loans, technical assistance, marketing support, and other resources for businesses.

During heavy construction, business turnover in the area was close to normal, and in a survey two-thirds of business owners said they expected sales to increase in the coming years.

Now, neighborhood merchants and leaders are trying to capitalize on the opening of the line to build economic and cultural assets. This summer, the Asian Economic Development Association kicked off the Little Mekong Market Nights in St. Paul, so far drawing 4,000 visitors and earning food vendors an average $1,020 a night. Efforts continue to promote historic Rondo as a cultural destination for the wider Twin Cities community and a gateway to learning about African American history in St. Paul dating back to just after the Civil War.

Keeping communities affordable

Whether the Green Line ultimately advances opportunity for all or reinforces longstanding inequities depends in large part on one question: Will low-income residents and local businesses be able to remain in resurgent neighborhoods?  

On the hopeful side, new transit-oriented developments like Frogtown Square in St. Paul, a senior residential and commercial development built by four nonprofits, create affordable housing units and small business opportunities along the transit corridor. In Rondo, the nonprofit Model Cities hopes to start construction in 2015 of the Central Exchange that would create 60 housing units, two small parks, and a library focused on local African American history.

Another good sign is the Big Picture Project, a coalition of 18 organizations developing a unified strategy to stabilize housing stock along the line, preserve affordable rentals, and make sure new developments improve the quality of life for residents. The project is closely monitoring housing trends along the Green Line, just as advocates kept tabs on hiring during construction.

The project's latest analysis finds that developers built just one unit of affordable housing for every 12 units of market-rate housing. The population along the line is growing, and average rents in the area have increased more than in the Twin Cities overall. So far the pressures do not appear to be displacing residents, but it will take continued vigilance and organizing to make sure that future investments preserve the cultural vibrancy of diverse neighborhoods and enhance economic prospects of the people who live there.

"Now that we have the line built, we have to really tackle the redevelopment all around it," Burt said. "That's the next fast train approaching."

Read the rest of the August 20, 2014 America’s Tomorrow: Equity is the Superior Growth Model issue.

In case you, missed it…

The recent report by Standard and Poor’s (S&P), How Income Inequality is Dampening U.S. Economic Growth, is finally bringing the business community into a conversation about the adverse effects of rising inequality on our economy. The report argued that the current level of income inequality in the U.S. is impeding economic growth and it announced that S&P was reducing its 10-year U.S. growth forecast as a result.

The good news: the report was widely covered by the business media (e.g. Wall Street Journal, Fortune, CBS MoneyWatch).  The bad news:  They only picked up part of the story.
 
Media coverage honed in on the report’s primary remedy to inequality—namely, an investment in education attainment.  But what the media missed was equally important.  The report talks about the need to focus on pulling more people out of poverty and expanding the purchasing power of the middle class; and it discusses the pros and cons of several solutions, such as raising the minimum wage (a recent IMF recommendation).  

On taxes, media coverage focused on S&P’s warning against using the tax code to try to narrow the wealth gap. But what the report actually said was more nuanced.  The report acknowledges that tax expenditures in the individual tax code (deductions, exclusions, preferential rates, and credits) mostly benefit the rich and it cites a recent IMF report that argues, “redistribution need not be detrimental to growth, to the degree that it involves reducing tax expenditures or loopholes that benefit the rich or as part of broader tax reforms…”  Finally, the report draws the conclusion that “redistribution can also occur when taxes finance public investment, or spending on health and education disproportionately benefits the poor…to the benefit of all.”

To make a long story short, S&P—an agency whose primary focus on producing reliable research for the financial industry gives it strong credibility among business leaders—is in alignment with equity advocates who have been arguing that growing inequality is not only contrary to American values, it’s detrimental to economic growth.  

The report even closes with a new twist on an old adage that may resonate with Equity Blog readers:  “A rising tide lifts all boats…but a lifeboat carrying a few, surrounded by many treading water, risks capsizing."
 

--Heather McCulloch is a PolicyLink Consultant and Manager of the Asset Funders Network/Tax Policy Project

• invest in tech education for every child in the city and in expanded STEM programs at community colleges;
• boost broadband in public housing and in neighborhoods without the highest-speed Internet connections;
• expand free outdoor wi-fi in Harlem; and
• increase the diversity of local tech firms through hiring goals for contractors and new procurement processes that help minority- and women-owned firms compete for city business.

Cross-posted from Huffington Post

This week, President Obama released the names of several businesses that are stepping up to help men and boys of color succeed. Building on previous commitments to the Administration's My Brother's Keeper Initiative, many of these efforts focused on mentoring, skill building, and investing in education. These are all important programs targeted towards a population that has been too often ignored, but the word that was missing was "jobs." Skill building and mentoring are vital for young men of color to succeed, but the effort must culminate in employment.

Men and boys of color face an employment crisis. In last month's jobs numbers, unemployment among African-American men was more than twice the rate of white men. Unemployment among African-American youth ages 16-19 is over 33 percent. Unemployment in the same age group among white youth is much lower, 18.9 percent. In many places across the country, the unemployment rates are much higher. In Chicago, an astounding 92 percent of young African-American men between the ages of 16-19 are jobless. Not only do they face higher rates of unemployment, African-American and Latino men are dropping out of the labor force participation at higher rates, too. This staggering unemployment of young men of color is devastating for them, their families, and communities: it is the crux of the problem.

The businesses that have joined with the President and shown their commitment to men and boys of color can help solve this jobs crisis. Companies like AT&T and JP Morgan Chase have large workforces. In addition to providing mentoring programs, they can open up their workforces to young men of color. The combined global workforce of just AT&T and JP Morgan Chase is nearly 500,000 employees. Surely, there is room to offer more job opportunities for young men of color.

In fact, both companies are already part of the way there. JP Morgan Chase's Fellowship Initiative enrolls young men of color in a comprehensive program with academic, social, and emotional support. Adding a guaranteed paid internship or entry-level position to this fellowship opens up career paths for young men of color that are tangible and effective. Citi Foundation's $10 million commitment to ServiceWorks shows their concern for men and boys of color. ServiceWorks creates volunteer opportunities, which are important for skill-building, but these volunteer opportunities should lead directly into permanent paid employment. Skill building needs to go hand in hand with employment.

In Cleveland, the Evergreen Cooperatives show how skill building can be combined with employment. Anchor institutions harness their spending power to spur business development in six low-income neighborhoods in the city and connect low-income residents to good careers that pay family supporting wages. These opportunities also enable resident employees to build wealth through their ownership stake in the business. The Evergreen model first creates the jobs, and then recruits and trains local residents to take them rather than concentrating only on workforce training.

Focusing on getting young men of color into jobs and careers is a winning strategy for everyone. The young men get connected to the world of work, their communities gain, and the economy gets a boost from higher workforce participation. Companies benefit from tapping into a broader, more diverse pool of talent and skill. With the President making historic strides in launching My Brother's Keeper and, together with Congress, passing the Workforce Innovation and Opportunity Act there is no better time than now to make a focus on jobs real throughout the country.

he federal Healthy Food Financing Initiative (HFFI) is best known as an innovative public-private partnership to improve access to healthy foods in low-income communities and communities of color. But it is also advancing an equitable economy by connecting residents to jobs, training, and capital to start and grow businesses that communities sorely need. Since 2011, the initiative has distributed more than $109 million in grants and leveraged more than $1 billion in investments and tax incentives to revitalize local economies while improving nutrition and health. The community-driven strategies are as diverse as America itself, from a culinary training program in Massachusetts to immigrant-owned agricultural cooperatives in Minnesota to grocery stores across the country. Today, America's Tomorrow profiles four ventures that demonstrate what's possible when our nation supports health and opportunity for all by investing in the people and places in greatest need.

Restoring the Indigenous Food Economy on the Tohono O'odham Nation in Arizona

This fall, 700 children on the Tohono O'odham Nation in southwestern and central Arizona will be served healthier school food sourced from local farmers. Tohono O'odham Community Action (TOCA), a grassroots community organization, received $300,000 in HFFI financing to pilot a school food service enterprise that supports healthier eating and a strong indigenous food economy.

TOCA's broad goal is to restore O'odham food sovereignty, to create jobs, improve health, and reclaim Native food traditions. In the early twentieth century, O'odham farmers cultivated over 20,000 acres. Today, they farm no more than 200 acres of food.

Of the O'odham Nation's estimated $70 million annual food expenditures, less than 1 percent is captured locally. Meanwhile, unemployment in the community hovers above 60 percent and more than 41 percent of the population is poor. Diabetes is rampant, and 76 percent of  middle schoolers are overweight or obese.

The school food program will serve TOCA-designed menus featuring dishes like brown tepary bean quesadillas. Food will come from O'odham farmers who have completed the agency's beginning farmer training program. To build the regional food economy and create institutional markets for tribal food producers, TOCA hopes the pilot will demonstrate that it can compete for district-wide school food contracts within the O'odham Nation, currently valued at $1.6 million and held by the multinational food services provider Sodexo.

School food service has fewer uncertainties than commercial food ventures, which makes it a good testing ground for TOCA's mission.  "It's easy to do school food systems," said Tristan Reader, TOCA co-director. "You have very clear numbers and a steady market."

Still, it took HFFI financing to lift the project from a great idea to a reality.  "Without HFFI funding, this would not be a project that is happening," Reader said.

Strengthening Community-Run Farm and Retail Co-ops in the San Francisco Bay Area

At age 15, James Berk began collecting neighborhood food surveys with Mandela MarketPlace, a nonprofit organization that works with communities of color to create cooperative food enterprises. Eight years later, Berk is a proud worker-owner of one of those enterprises, the Mandela Foods Cooperative (MFC), a 2,200-square-foot West Oakland grocery store with nearly $1 million in annual sales.

By investing in capacity building, leadership pathways, and ladder-up financing for local food entrepreneurs, Mandela MarketPlace builds health, wealth, and assets in neighborhoods with limited access to economic opportunity. Now, with a $400,000 grant from HFFI, the organization is creating a revolving loan fund to incubate and support businesses like MFC that connect their communities to farmers of color in the region.

One loan recipient, Mandela Foods Distribution, purchases and markets produce from a network of local farmers of color. The financing helped solidify a partnership with California FarmLink, a nonprofit organization that links underserved farmers to land and financing.

Through this partnership, Mandela can back loans for small family farmers in need of early-season capital to purchase seeds and pay employees before harvest-time revenues.  In 2013, Mandela Foods Distribution sold 150,000 pounds of produce, increasing income for the core team of eight farmers by $61,000.

Along with the City of Oakland, HFFI also is supporting the opening of a café at Mandela Foods Cooperative. The co-op has a team of three employees and four worker-owners who see about 250 customers a day. The hope is that the café will increase foot traffic, continuing the co-op’s growth to eventually support eight worker-owners, and further expanding the market for locally grown foods.

Building Immigrant-Owned Food Businesses in the Twin Cities Region

A small farming cooperative operated by a group of Latino food-industry workers saw sales increase more than three-fold this year thanks to HFFI financing. It was one of a series of HFFI investments coordinated by the Latino Economic Development Center (LEDC) in Minneapolis to help Latino and Hmong communities move out of low-paying jobs in the food sector and create robust food enterprises.

"Typically immigrant workers in the food industry have been paid low wages," said John Flory, special projects director at LEDC. "Our goal is to provide opportunities for immigrants to become business owners in the food industry."

In 2013, the Agua Gorda Cooperative grew $40,000 worth of produce but had to dump half because of limited storage and marketing options. Now the co-op has access to a walk-in cooler and two refrigerated trucks purchased with HFFI financing, and it has $65,000 in sales contracts.  The financing went to a marketing cooperative in which Aqua Gorda is a member. The four other members — three Latino farm ventures and a Hmong farm co-op — also benefit from these crucial assets.

HFFI financing also is supporting the expansion of La Loma Tamales, a Latino-owned wholesaler, caterer, and restaurant operator that produces one million tamales a year. The growth of this Twin Cities-based company is good for Aqua Gorda, which recently sold $30,000 worth of tomatillos to La Loma, and it is good for the regional food economy. With a $150,000 equity-match loan, La Loma is expanding its commercial kitchen, moving into a larger facility, and adding 15 production jobs.

Engaging, Inspiring, and Training Youth in Lowell, Massachusetts

Twenty-two young people in Lowell, Massachusetts, soon will start serving soups, salads, and sandwiches in a café set to open in the world’s oldest LEED-Platinum certified building. The United Teen Equality Center (UTEC), an innovative youth development agency, is using $800,000 in HFFI financing to expand programming into the culinary arts. Participants, ages 16-24, will earn wages as they develop workforce skills and continue working toward a high school diploma.

“This is not a second-chance program, but a sixth- or seventh-chance program,” said Ed Frechette, chief innovation officer. “We provide working platforms for youth so they can honestly fail with us and not be fired.”

The Center chose to expand into culinary training because of the vast number of jobs in the food sector. Participants will learn an array of skills, from gardening and food production to recipe design and knife safety to interacting with the community over something everyone loves: good food.

Learn more about the Healthy Food Financing Initiative in your community at the Healthy Food Access Portal.

Read the rest of the July 25, 2014 America’s Tomorrow: Equity is the Superior Growth Model issue.

America’s increasingly diverse workforce will power a stronger, more equitable new economy—if all workers can access the training they need to participate and contribute. PolicyLink applauds Congress and the President for taking an important step forward by moving past political gridlock to enact the Workforce Innovation and Opportunity Act on July 22. This $3 billion-a-year job training bill holds great promise to strengthen the economy from the ground up by equipping the workers who face the greatest barriers to employment with the skills employers demand.
 
A job training system that works for vulnerable groups—the unemployed, disconnected youth, people with criminal records, workers without advanced education or training, low-wage workers—is more important than ever as baby boomers retire in droves and the workforce quickly becomes more diverse. The bill includes several changes to better link these workers to jobs and career pathways, building on local innovations and best practices. We thank our elected officials for taking this important step. And we also thank our colleagues at CLASP, Opportunity Nation, National Skills, Coalition, YouthBuild, and elsewhere who advocated for key provisions in the bill.  We look forward to their continued efforts to ensure the bill delivers on its goals for vulnerable workers as it moves through the implementation process.
 

Economists are beginning to analyze how mass incarceration hinders economic participation and progress—adding more evidence for the need to stop the school to prison pipeline for boys and men of color. 

Last week, the National Bureau of Economic Research (NBER) released a working paper titled: The Prison Boom and the Lack of Black Progress after Smith & Welch.  As the title suggests, the paper lifts up the destructive effect of mass incarceration on the economic prospects of the black community—particularly for black men. 

Analyzing data from the National Corrections Reporting Program (NCRP), National Prisoner Statistics (NPS), and the FBI Uniform Crime Reporting System (UCR), University of Chicago economists Derek Neal and Armin Rick find that—relative to white males—black males are no better off, and possibly worse off than they were in 1970. 

This conclusion is underpinned by several key trends and findings: 

• Employment rates for all men have fallen in recent decades, and simultaneously there has been an unprecedented increase in incarceration rates. Since 1980, these trends have been much more dramatic among black men than white men.
   
• Past research on the effects of changes in criminal justice policies has not established a strong link between changes in corrections policy and prison growth.  However, by constructing measures of prison admissions, releases, time served, and arrests by offense across states, the authors build a strong case that criminal justice policy changes (since the 1970s) have acted as “engines of growth” in prison populations.  Their analysis lifts up the fact that the majority of growth in the federal prison population is due to increases in three offense categories:  drugs, weapons, and immigration—arenas in which people of color are disproportionately criminalized compared to their white counterparts.
   

By highlighting convincing past research establishing the relationship between corrections policies and labor market outcomes, Neal and Rick argue that the population that has suffered the most under these punitive policies—black men—now likely faces worse economic prospects than they faced when policy shifts starting in the 1970s ignited the prison boom. 

This study is a follow-up to a widely cited 1989 paper by James Smith and Finis Welch that used census data to illustrate reduced racial gaps in education and earnings from 1940 to 1980.  Over those four decades, the average educational attainment of black men jumped from six to 12 years, compared to an increase from 10 years to 13.5 years for white men.  Large gains in educational attainment corresponded with gains in earnings for black men during this time period.  According to Neal and Rick, these gains stopped with the implementation of punitive criminal justice policies across the country starting in the 1970s. 

While not yet peer reviewed, this study offers important insights into the structural inequities embedded in the U.S. economy, and the economic impacts of punitive criminal justice policies in black communities.  Perhaps most significantly, it begins to develop a more nuanced narrative about rising income inequality in America not yet told in the existing economics literature.  Clearly, this area of economics research is ripe for more investigation.  As the authors note, “…economists need to carefully investigate the intergenerational consequences for families and communities of policy changes”.

Unfortunately, because of the numerous datasets compiled for this study to mitigate the dearth of quality data, the same type of analysis could not be conducted for the Hispanic population, since datasets used different types of classifications for people of Hispanic origin.  The trends among all other groups are lumped together in an “other” category, highlighting the need to improve data collection methods on a state and federal levels around crimes, arrests, and prisons activity to fully understand how criminal justice policies are impacting the social and economic prospects of every segment of our population.

To view the full study, visit the NBER site (with a subscription or with an individual purchase); and for more information on how you can improve the lives of black men and boys, visit The Institute for Black Male Achievement website for the latest information from the field and for specific ways on how you can take action.
 

A Response to Emily Badger’s Washington Post article: “Why plummeting Millenial homeownership isn’t as alarming as it seems”

1. “Attitudes towards homeownership” ARE NOT fundamentally shifting for millenials.
   In the U.S., homeownership has been one of the most well-known wealth-building opportunities for families.  This opinion, despite the housing bust, largely has not changed.  What has changed is the ability to do so.  Student loan debt, especially for millenials, has risen significantly over the past decade.  According to an earlier Washington Post article by Dina ElBoghdady,  “ [student loan] debt has tripled from a decade earlier, to more than $1 trillion, while wages for young college graduates have dropped.”  This exorbitant debt, paired with lower wages, in many ways prevents millenials from being able to make other large purchases, including buying a home.  We can only imagine how this impacts millenials of Color, who on average incur $4,000 more of student loan debt, and receive less “head start” money from families.  It’s not that people prefer not to own a home; instead, systemic barriers prevent them from doing so.
    
2. Demographic Shift, especially in regards to race, is central to any conversation on millenial homeownership.
   In talking about demographic shift in the United States, we’re not necessarily talking about the declining percentage of people getting married, or having children.  We’re talking about the rising percentage of people of color.  According to All-In Nation: An America that Works for All, a recent collaborative study by PolicyLink and the Center for American Progress, millenials will not be the only population where people of color are prevalent.  In fact, it’s projected that the entire United States population will be majority people of color by the early 2040s.  Even Chief Economist of Trulia, Jed Kolko, states in a recent article that the most glaring demographic shift was that of race.  Kolko noted that a key factor of low homeownership was the declining percent of “non-Hispanic white” people to 57 percent, a decline larger than any other factor.  What his evaluation means, in laymen’s terms, is that almost 50 percent of millenials are People of Color, and that this negatively influences homeownership rates.  What this data misses, however, is the persistent implications of race for millenials seeking to be homeowners.  What Badger brushes over in her response to Kolko is that white, middle-class millenials will still have it easier; and somehow this fact shouldn’t alarm us.
    
3. We should be worried because according to this article, demographics of Americans are changing, but the demographic of homeowners is not.
   In other words, the same people who have been boxed out of homeownership in the past, will continue to be boxed out. By saying that “turning more millenials into homeowners… may not be the missing piece of the housing recovery” we ignore the crucial factors influencing homeownership rates.  It’s not that millenials don’t want to become homeowners.  Nor is it that the percentage of “non-Hispanic white” millenials is lower.  It’s that there are systemic barriers that have prevented people of color from homeownership, despite their income, despite their education, and despite their desire to own a home.  But what this leaves is a major opportunity.  An opportunity to change policy to fit the racial demographic shift in the U.S., thereby creating a more equitable economy.  This change does not come by discouraging millenials of Color from becoming homeowners, but by removing the barriers that they face to becoming homeowners.  Removing these barriers come in the form of transforming several current policies, including but not limited to how the U.S. deals with student loan debt and sustainable mortgage financing. Transforming these policies are significant steps toward becoming an equitable economy where millenials of Color can build wealth.