In order to build wealth and create opportunities in and across America’s underserved communities, and reverse the troubling trends we’re seeing in our economy, we no longer find it defensible to focus on job creation alone. It’s clear that job creation does not itself equate to lasting economic change. And so, we must shift our focus to the creation of higher quality jobs — jobs that are good for workers and their families, good for businesses, and good for communities — enabling us to build an economy that works for everyone.
Each month, we bring you the latest roundup of news from the fight for quality jobs for working people.
Equity Will Drive A Good Jobs Economy
Right now there’s a mismatch between capital and the people with entrepreneurial drive and innovative ideas. When venture firms, banks, and the rest of the folks holding the money dole it out, they’re usually not spreading it around to the people in your local community who have the drive. That’s because study after study shows that the people who most want to start businesses – African-American and Hispanic men and women, young people with massive amounts of student debt, and working-class people with no family money to speak of – are being passed over. Economic Innovation Group has a slate of ideas to change that >
Another thing we need to look at nationally is support for microenterprise – the smaller small businesses. Microenterprise jobs provided opportunity and connections for individuals who had impediments to secure good jobs. An amazing new study from our friends The Aspen Institute highlights the challenges of immigrant DREAMers, people with disabilities, the formerly incarcerated, mothers trying to keep resumes relevant, seniors, and workers without college degrees. Read the report >
Understanding how different kinds of workers are affected by very different and oft-times specific corners of the economy is important. A new report entitled No Piece of the Pie: US Food Workers in 2016 found that the food industry — the largest employment sector in the nation — also contains the greatest portion of its poor. These findings come on the heels of another recent study that found that restaurants have some of the largest race-based pay gap in the country. Read more in the East bay Express >
Any conversation about creating good, middle class jobs that doesn’t center around small business and broader-based ownership is off-base from the start. To prove the point, a new report from American Express shows the number of women-owned firms continues to rise at rates higher than the national average – with even stronger business formation rates seen since the recession. As of 2016 there are now 11.3 million women-owned businesses in the United States employing nearly 9 million people (an 18% jump since the recession!) Female business owners have accomplished all of this while facing substantial barriers around access to startup capital, networks, and government contracts. Read the report >
There are green shoots, though. Despite the statistics, black women in the venture capital investing community are starting to be a more frequent occurrence. And they’re working tenaciously to ensure that black and Latino founders get funding. 500 Startups’ venture partner, Monique Woodard, explains why she decided to create a fund which focuses solely on investing in black and Latino entrepreneurs in consumer categories that are seeing high growth among black and Latino consumers. Read more on Black Enterprise >
Location, Location, Location
The inner city was a recurring theme in the presidential campaign. President-elect Donald Trump called inner cities “a disaster,” painting a grim picture of violence, poverty and a lack of jobs. The reality is less stark, but jobs and poverty are still stubborn issues in some core city neighborhoods. So how can leaders create jobs and combat poverty in these so-called inner cities? The answer is to nurture local small businesses. Small businesses are the biggest job creators in most cities, especially in distressed inner city neighborhoods. And a modest increase in hiring by these firms—by just 1 to 3 employees each—could eliminate unemployment in inner city neighborhoods. Read more on Locavesting >
We also need to think about broader regional opportunities beyond big cities. A healthy economy relies on a balanced mix of established firms and startups, yet, a longstanding national decline in new business formation threatens this balance. Rise of the Rest, a new organization from impact investor Steve Case, has launched to strengthen emerging startup ecosystems outside of the traditional big cities like San Francisco and New York. From 1977 to 2013, startups as a share of all U.S. firms fell by more than half, and at the same time started to cluster in a few elite hubs. Rise Of The Rest aims to bring mentorship and capital to job creators across the rest of the country. Read more on Entrepreneur >
Pillars Of The Community
America’s small businesses are critical components of the national economy. The jobs, wealth, and social and cultural capital they create are essential to thriving communities and sustained economic development. That’s why communities and the broader economy suffer when small businesses in low-income and distressed neighborhoods are unable to obtain the capital they need to grow and create new jobs. Read more on IBM’s blog >
When we talk about small businesses, we’re talking about the core of our communities. 63 percent of all businesses in America are small businesses, more than five years old and with 50 employees or fewer. The small businesses started by Main Street entrepreneurs also bring surprising benefits to their communities. Counties with a high density of small businesses may be associated with lower mortality rates and a lower prevalence of chronic disease. But, these entrepreneurs also face steep structural challenges. Read more at Kauffman Foundation’s blog >
One group facing very specific challenges are small retail stores across the country. High rents have finally cracked a crop of retailers that had adapted and weathered the intrusion of Amazon and chain stores like WalMart and Target —think shoe stores, fabric stores, electronics stores. The impact is not only devastating to the character of communities, but it weakens the economic fabric and guts the middle class – and the losses are being felt nationally. In cities as diverse as Oakland and Nashville, Milwaukee and Portland, retail rents have shot up by double-digit percentages over the last year alone. Read more on Epoch Times >
Conscious Capitalism and Purpose-Driven Companies
Can a business profit by helping its employees be their best selves and by improving the quality of the jobs it offers? According to fast-growing tech company NextJump, yes. Next Jump is an example of what Harvard researchers call a “deliberately developmental organization.” In practice that means Next Jump puts as much emphasis on helping employees learn and grow as people as it does on any particular traditional business or revenue goal. According to new reserach, deliberately developmental organizations reap more profits, have more satisfied and functional teams, and are more innovative than companies that don’t take this approach. Read more on Conscious Company >
We hear more and more that organizations must have a “purpose.” But is all this talk about purpose actually delivering business results, or is it just marketing spin? Most companies have mission and vision statements, sure, but those tend to communicate very little about a company’s purpose. They all use the same words, such as “respect,” “teamwork,” and “innovation.” But many, perhaps most, of the same organizations lack those characteristics. Harvard Business School tried to determine if all the resources companies are putting toward at least the appearance of purpose actually affect their business, with some interesting findings. Read more on Harvard Business Review >
But even the most menial work can be transformed into higher quality labor with the right plan. By following a good-jobs strategy, companies can boost their profits, innovate on everything from product development to distribution, pay workers living wages with benefits, and cut turnover from 70% to 5%. It’s not the government’s role to micromanage company operations, but public policy can offer incentives. Raising the minimum wage to $15 an hour is a start. The Industrial and Technology Assistance Corporation, a state-funded entity in New York for example, offers services to about 200 companies a year to improve their job quality. Read more on New York Daily News >
There are also reasons outside of the company’s walls to make improving job quality a priority on equal par with profit. Pay, benefits and how well companies respect their employees are the biggest concerns for most American workers, according to a list of companies released by Forbes Media. The research also found that Americans trust big corporations less now than they did a decade ago, and an overwhelming number of Americans take a company’s reputation into account when they buy its stuff, use its services, apply for jobs and even when acquiring a company’s stocks or bonds. Read more on The Washington Post >
If States Are The Laboratories Of Democracy…
Many businesses are positioning themselves to be competitive in the future, because leaders understand that new regulations and the push to dramatically limit or even eliminate the use of fossil fuels are creating technological innovation, jobs and significant investment. In effect, the cures to the disease of climate change are creating a new economy. Now, a new report details how California public and private entities invested $48 billion in renewable energy, energy efficiency, transportation and other climate projects and produced more than 500,000 new jobs. Read more on TriplePundit >
Are Economic And GDP Growth Something We Should Even Care About?
We’re all used to hearing the mainstream’s reporting on GDP growth and the stokc market as indicators of how our economy is doing. But some economists are now challenging that view, arguing that it makes more sense to focus on measures of well-being other than growth. After all, despite a growth rate that has averaged three percent over the last 60 years (which is quite robust), there are still 43 million Americans living in poverty, and most people’s wages are essentially unchanged from the end of the Reagan administration. So what if growth isn’t the key to raising the standard of living across a society? Read more on The Atlantic >
Beginning this year, PCV has shifted its mission in order to move our economy to one where quality jobs are the norm—not the exception. CDFIs like ours must build consensus around a common definition of a quality job, undertake practical efforts to foster the creation of quality jobs, and measure results to understand what works.