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The Achievement of Economic Inclusion

The Achievement of Economic Inclusion
Addressing inequities to promote economic advancement for all
by Scott Hebert, Principal Associate, Community Science

In many urban and rural communities in the United States, patterns of long-term disinvestment and persistent racial and economic segregation have been major contributing factors resulting in areas of concentrated poverty. As a consequence of a variety of structural and systemic problems, residents in these disadvantaged communities are isolated from economic opportunities in the broader city or region.

These neighborhoods often lack access to essential services and amenities, such as effective schools and training programs, reliable transportation, non-predatory financial services, quality child care and health services, and fresh, affordable food outlets.

In part reflecting the limited educational resources available to them, many working-age residents in these communities have low educational attainment and few marketable skills. These characteristics, plus the lack of supportive services, contribute to the difficulties that these individuals face in securing and maintaining employment that can lead to family economic security. In addition, many of the businesses operating in these neighborhoods are undercapitalized, negatively affecting the range and quality of goods and services they can offer, and their potential for growth and job creation.

"Economic inclusion" strategies seek to address the underlying structural issues and practices, including discrimination, that serve as barriers to economic opportunity and improved quality of life for the residents of these disadvantaged communities.

The economic inclusion strategies aim to enhance the skills and employment connections of residents, and their opportunities to pursue careers in jobs that offer family-supporting wages and benefits. Through these improved employment opportunities, the strategies foster economic mobility for these individuals and their families, and improvements in the households' financial security and resilience. The strategies also strive to expand opportunities for business development and expansion, and to increase the economic vigor of these neighborhoods and their ability to attract investment. In the process, the strategies seek to enlarge the array of goods, services, and amenities that are available to those that live or work in or visit these communities.

Launched in January 2011, the Baltimore Integration Partnership (BIP) is one example of an initiative focusing on economic inclusion.

Economic inclusion efforts are about fostering greater social justice and equity. But they are also about promoting the health of the local economy, the strength of the institutional sector, and the vitality of the larger city or region. Through fostering a more productive workforce, getting more residents engaged in the economic mainstream, and improving the conditions and appeal of previously distressed neighborhoods, the broader community benefits.

BIP is one of five sites (the others are Cleveland, Minneapolis-St. Paul, Detroit, and Newark) funded under The Integration Initiative (TII) of Living Cities. Living Cities is an innovative collaborative of 22 of the world's largest foundations and financial institutions. Its members have collectively invested nearly $1 billion over the last 20 years in helping to shape federal funding programs, redirect public and private resources to more effective uses, and assist communities to build homes, stores, schools, community facilities and more. Community Science is conducting a developmental evaluation of BIP (see New Client Profile section on right).

The BIP effort in Baltimore represents a partnership among a broad array of key leaders and institutions across multiple levels of government and the philanthropic, private for-profit, and nonprofit sectors. To achieve its overall goals, BIP's partners are pursuing strategies that are intended to:
• Use capital and leverage infrastructure investments to harness the power of markets to create greater opportunities and assets for low-income people and places.
• Address racial inequities and policies that create structural barriers to opportunity for city residents;
• Support the public, private, and philanthropic leaders in breaking through critical impasses and in rejecting unproductive practices that have long limited opportunity; and
• Move systems to a "new normal" that redirects resources away from failed approaches to problems and instead institutionalizes more effective models of funding, operations, and practices.

Kurt Sommer, the Director of the Baltimore Integration Partnership, describes the scope of the BIP effort:

"To move Baltimore forward, the initiative's agenda is multi-dimensional. BIP is working to create stronger links and approaches between workforce, capital investments, and a subset of the city's large employers. But the solution also requires investments in workforce training, as well as better access through improved transit to the rich employment centers in the Baltimore suburbs and in the growing District of Columbia metro area."

Two particular economic inclusion emphases of the BIP effort over the past year involve engaging major "anchor" institutions, and creating employment and business opportunities for local residents and firms as part of development projects occurring in the initiative's target neighborhoods.

The “anchors” on which BIP is focusing are large public and private higher educational institutions that represent major economic engines for the city and the greater Baltimore region. They include Johns Hopkins University, the University of Maryland at Baltimore, the University of Baltimore, and the Maryland Institute College of Art.

Taken together, these institutions have the equivalent of more than 17,000 full-time employees, and procure more than $750 million annually.

These Baltimore institutions have become partners in the BIP effort, and individually and collectively are exploring ways to increase the hiring of residents from the neighborhoods adjacent to their campuses and facilities, where there are concentrations of lower income households. They are also looking to promote greater career advancement for current employees from those neighborhoods who hold entry-level positions. To those ends, BIP and some of the anchors are experimenting with the use of a “roving career coach” and with targeted remedial education courses to increase job readiness and promotion potential. The anchors are also working separately and together, with consultant assistance supported by BIP, to explore  ways to increase the utilization of local businesses, and particularly minority-owned businesses, in the institutions’ procurement of goods and services. 

Through capital provided by Living Cities, BIP is helping to finance housing and commercial development projects in the Baltimore target neighborhoods. In addition to creating needed infrastructure and amenities, these projects are intended to be catalytic in attracting additional investment and spurring broader revitalization in these neighborhoods. But BIP is also seeking to maximize the economic inclusion “multiplier effect” of these projects by requiring the assisted developers to set-aside a portion of the jobs created by the projects for local residents (generally in the range of 15% to 20% of the construction jobs). For projects with permanent employment opportunities, BIP also negotiates with the borrower to fill some of the long-term positions with local hires. In addition, 27% of the construction-related contracting associated with these development projects must go to African American Business Enterprises (unless there are city or state minority-business enterprise requirements already in place).

BIP is also working with its partners, including the Mayor’s Office of Employment Development (MOED), to enhance the workforce development services available to Baltimore job seekers and employers.

In part, these efforts are meant to ensure a pool of qualified local job candidates for the anchor and development project positions that become available. But they are also meant to promote broader, systemic improvements in Baltimore’s workforce development training and services.

These efforts build on the foundation and successes of the current workforce development system, but also address what the BIP partners have identified as critical gaps. To date, the efforts of the BIP partners have included creating “neighborhood employment pipelines” to improve outreach to and referral of local residents to workforce services and training and employment opportunities. The BIP partners have also been pursuing strategies for expanding “bridge” remedial training and vocational training to improve job readiness and the marketable skills of local job candidates.   

The above profiles just a few of the activities in which BIP is engaged to promote economic inclusion. BIP is also supporting efforts to expand the capacity of Baltimore’s Community Development Finance Institutions (CDFIs), as vehicles to secure more capital for development projects in Baltimore’s inner-core neighborhoods. It also has supported the expansion of micro-enterprise activities to assist Baltimore business start-ups and existing small businesses to grow. BIP partners are also collaborating with the Central Maryland Transportation Alliance’s “Let’s Get to Work” initiative that is advocating for public transportation improvements that will increase opportunities for city residents to access employment opportunities throughout the metropolitan region. BIP is also working with the region’s Sustainable Communities Initiative that is advancing the issues of equity and access to opportunity in workforce development and housing throughout the region.

According to Betsy Nelson, President of the Association of Baltimore Area Grantmakers and Co-chair of BIP’s governance board:

“Commitment to economic inclusion has become the common ground for members of the philanthropic, nonprofit, and public sectors to coalesce around. BIP has provided one platform for us to move this commitment to action for the betterment of Baltimore’s residents.”

The BIP activities also are complementing a number of other efforts in Baltimore to promote economic inclusion. These include the “Employ Baltimore” executive order enacted by Mayor Stephanie Rawlings-Blake in June 2011. The executive order requires businesses who receive city contracts of $50,000 or more to meet with MOED to discuss their hiring needs and to identify the customized assistance that MOED can offer to help the firms in accessing, and if necessary training, local job candidates.

Another effort is the “More in the Middle” initiative of Associated Black Charities, Inc. (ABC) of Baltimore. More in the Middle is a wealth-building initiative to retain, grow and attract a larger African American middle class in Baltimore and Maryland. To achieve that goal, its uses a five-pronged strategic approach, involving: homeownership expansion and foreclosure prevention; workforce development and career advancement services; higher education readiness, access, and completion; business and economic development assistance, and asset-building and financial literacy. Through More in the Middle and its other efforts, ABC strives to ensure that Baltimore’s stakeholders understand the fundamental role of structural and institutional racism in creating conditions of unequal opportunity. ABC also works to make certain that the responses designed to address these conditions and their underlying causes are sufficient to meet the needs of Baltimore’s disadvantaged residents and businesses.   
Together, these two initiatives and BIP, as well as an array of other efforts occurring in the city and region, are beginning to tackleBaltimore’s systemic and structural barriers to economic opportunity, and helping to reverse long-term patterns of disinvestment in the city’s inner-core neighborhoods.



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