Economic Development in American Cities: The Pursuit of an Equity Agenda

INTRODUCTION: FULL EMPLOYMENT AND LOCAL WORK FORCE POLITICS AND POLICIES

INTRODUCTION FULL EMPLOYMENT AND LOCAL WORKFORCE POLITICS AND POLICIES Robert P. Giloth ECONOMIC DEVELOPMENT AND EQUITY Twentieth-century U.S. cities played decisive roles in promoting equity and opportunity for their citizens. Cities were the sources of important municipal innovations as well as the social, political, and economic battlegrounds for advancing more equitable policies and conditions. The reaffirmation and extension of civil rights, the development of a social safety net, and sustained economic growth made cities and metropolitan areas the laboratories for creating more diverse, tolerant, and equitable communities. Nevertheless, income inequality has grown in the United States by at least 12 percent, income gains and employment still lag for African American young men, and the Hurricane Katrina evacuation and aftermath have vividly shown the impact of social, economic, and racial disparities on our basic security and quality of life. Economic Development in American Cities: The Pursuit of an Equity Agenda anticipates the roles of municipal leaders and civic partners for promoting social equity in the twenty-first century by examining the experiences of a handful of cities in the 1990s. In particular, we reflect on the potential of existing and future labor and skill shortages for contributing to creating the preconditions for new local political regimes built around economic competitiveness and equity. That is, we are interested in whether the economic imperatives of tight regional labor markets translate into new civic organizing 1 2 ECONOMIC DEVELOPMENT IN AMERICAN CITIES related to human capital and jobs that complement other efforts to reform public education, increase affordable housing options, and improve quality of life. Although not a primary focus of this book, tight labor markets also facilitate workplace organizing and may constrain the “low road” option of businesses paying the lowest possible wages and benefits and adopting “sweatshop ” workplace conditions (Bernstein and Baker, 2003; Shulman, 2003). The intended audience for this book, as demonstrated by the mix of its authors, bridges the worlds of academia, policy advocacy and implementation , and civic engagement. Regional and national labor markets are becoming vastly altered as a result of global competition, technological change, and changes in the demographics of working adults. On the one hand, tremendous downward economic pressures on low-wage workers are creating a bifurcated income distribution; declining union density, outsourcing and contingent work, and outmoded minimum wage policies exacerbate this trend (Osterman, 1999). On the other hand, demand for skilled workers may create opportunities for upward mobility if appropriate education, training, and support strategies are developed for young people and underemployed urban residents. Ultimately, if firms are unable to find skilled domestic workers to fill their jobs, they may accelerate the outsourcing of jobs while advocating for the increased inflow of immigrants to fill their jobs (Aspen Institute, 2002). Although demographic and occupational projections vary, it is likely that the expansion of labor supply and educational improvement that fed economic growth during the past few decades will not be as available in the decades ahead. The United States and many other advanced economies will enter a period of sustained tight labor markets and uneven skill shortages across industries. The Aspen Institute estimates a 0 percent growth in native labor supply in the next twenty years, compared to 44 percent growth in the past two decades (Aspen Institute, 2002). Increasing the demand for skilled workers will increase the premium on obtaining postsecondary education (Edelman, Holzer, and Offner, 2006). Anthony Carnevale of the National Center on Education and the Economy estimates that we will face a seven million shortfall in skilled and unskilled workers by 2010 and a thirty-five million shortfall by 2030 (Gunderson, Jones, and Scanland, 2005, 27–32). Immigration, technology, outsourcing, and extended work lives will certainly be adopted to meet this labor supply challenge, as well as the increased use of temporary employment agencies to mitigate perceived hiring risks (Houseman, Kalleberg, and Erickcek, 2003). But it is likely that the United States will have to invest more wisely and deeply in those who have been left out of the economic mainstream to meet labor market demands, even as the economy continues to create low-wage jobs in the health, service , and hospitality sectors. Full employment (or tight labor markets) gets the attention of the business community, increases wages and benefits over time, lowers some hiring requirements, reduces discrimination, and pressures 3 INTRODUCTION workforce development and educational institutions to be more customer oriented, coordinated, outcome driven, and innovative (Bernstein...