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Economic Inclusion

By Amy Liu, Vice President and Director, Metropolitan Policy Program, Brookings Institution

 
Amy Liu
Vice President and Director, Metropolitan Policy Program, Brookings Institution

The geography of opportunity and poverty is shifting, creating a patchwork of concentrated advantage and disadvantage across cities, suburbs, and exurbs that challenges existing models of governance.

How can one create more inclusive economies in this disruptive age?

Cities are under pressure to deliver on a whole host of national priorities. In the U.S. that includes the nation’s weak productivity growth, stagnant wages, and stark racial disparities. When an inclusive economy and a robust economic growth agenda is not a top priority for national governments, local governments, along with the private sector, are required to step up their investments in key domestic policy areas like infrastructure, job training, and housing assistance.
As public and private sector leaders in metro areas set out to build more productive, inclusive economies, they should address the structural barriers, past and future, that prevent many people, places, and businesses from participating fully in the economy.

At one level, this means that cities and metro areas must reverse the housing, land use, and infrastructure policies that have privileged white homeowners over black and brown Americans. At the same time, cities and metro areas must help their communities adapt to the rapidly shifting dynamics of the new era, which threaten to exacerbate inequality and exclusion. Technology is transforming every occupation and industry in cities large and small: According to forthcoming Brookings research, the share of U.S. jobs that require only low levels of digital literacy shrank from 56 percent in 2002 to less than 30 percent today. In just over a decade, the day-to-day duties of administrative assistants, toolmakers, truck mechanics, HR specialists, and numerous other occupations have dramatically digitalized.

Additionally, the workforce that must be prepared for a digital economy is both aging and diversifying, with older, whiter generations and younger, multi-ethnic ones each seeking to navigate a changing labor market.

City and regional leaders can help their communities adapt in the following three ways:

Help people adapt their skills to the changing demands of our economy. Many older workers are struggling to translate their skills and experience into stable employment, while younger ones lack meaningful workplace experiences or personal networks to find good jobs. City leaders can help both groups by promoting apprenticeships and other work-based learning programs, organizing digital and global fluency trainings, and ensuring work supports for near retirees. New York City, for instance, has launched Ladders for Leaders, a program that sets its sights on providing 100,000 jobs, internships, and mentorships per year for young New Yorkers by 2020, particularly vulnerable youth.

Improve connectivity and access to better opportunities. Too many neighborhoods and jurisdictions within metro areas are isolated; cities can help re-connect them by investing in better transit, more affordable housing in opportunity-rich neighborhoods, and a network of innovation hubs and job centers across the metro area so that residents are close to jobs regardless of where they live.

Help businesses launch, scale, and innovate, promoting greater economic dynamism and productivity. Despite all of the promises of technological innovation, research confirms that business formation and productivity is flat, challenging workers’ paths to upward mobility and income growth. City and metropolitan leaders can create healthier, more productive business ecosystems by helping firms invest in their employees and new digital solutions, encouraging entrepreneurship and start-ups, especially among underrepresented groups, and connecting small and mid-sized firms to new customers and markets abroad.

Achieving more productive, inclusive economic growth requires multidimensional action. Local and regional leaders will need to change mindsets, emphasize systemic reforms over narrow new programs, and reimagine ways to finance solutions. It certainly won’t be easy. But in today’s political climate, progress on these crucial objectives will increasingly depend on the adaptive actions of cities and metro areas.

Editor’s note: This post was originally published on the Brookings Metropolitan Policy Program blog.

The Author

Amy Liu is vice president and director of the Metropolitan Policy Program at Brookings, and the Adeline M. and Alfred I. Johnson Chair in Urban and Metropolitan Policy. She also directs the Global Cities Initiative: A Joint Project of Brookings and JPMorgan Chase, which aims to help leaders in U.S. metropolitan areas reorient their economies toward greater engagement in world markets. In 2016, Liu authored “Remaking Economic Development: The Markets and Civics of Continuous Growth and Prosperity” in which she argues that city and metropolitan leaders must adopt a broader vision of economic development that can deliver economic growth, prosperity, and inclusion for all residents.

For Amy Liu’s full Brookings bio, click here.

Recommendations:

  • Help people adapt their skills to the changing demands of our economy by promoting apprenticeships and other work-based learning programs, organizing digital and global fluency trainings, and ensuring work supports for near retirees.
  • Improve connectivity and access to better opportunities.
  • Help businesses launch, scale, and innovate, promoting greater economic dynamism and productivity.
  • Address the structural barriers, in areas like housing, land use and infrastructure policies, that prevent many people, places, and businesses from participating fully in the economy.

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