Businesses can play a major role in increasing economic security in communities that have been left out — why aren’t more doing so?
By Jack Mills
Americans are deeply concerned about inequality of income and wealth. Too often, businesses do less than they could about it, and some even follow the maxim that the social responsibility of a business is to maximize wealth for its owners. But what happens when businesses are intentional in their efforts to increase economic opportunity and security in communities that have been left out when it comes to economic vitality? Johns Hopkins Hospital in Baltimore Maryland provides one example of a model that can strengthen economic security as it reduces income and wealth inequality.
As Scott described, one of the program’s key goals is “to have 40 percent of new hires for certain entry-level jobs come from neighborhoods with high unemployment and poverty.” Another is to achieve 17 percent participation in construction contracts by Minority, Women, and Disadvantaged Business Enterprises that have been certified by the state or city. The first objective helps increase income, the second helps build wealth, and both target communities that have been left out when it comes to economic security.
One way that HopkinsLocal is working to achieve its hiring goal is through a new screening process in which applicants who live in the zip codes of neighborhoods with high unemployment and poverty are assured an initial review. Qualified applicants are then identified and referred to hiring managers. The jobs filled through this program include work in custodial services, catering, entry-level clerical and technical positions, and other areas.
Notably, the HopkinsLocal program shows that civic leadership by one employer can spur involvement by other employers — many others, in fact. In April, 24 additional businesses joined John Hopkins Hospital to create what is now a community-wide $69 million initiative known as BLocal. Participating businesses include major players like Under Armour and T. Rowe Price, as well as local banks, utilities, and construction and development firms.
One of the co-chairs of the BLocal initiative is Ronald Daniels, president of Johns Hopkins University. While the program is the outcome of a lengthy development process, Daniels has acknowledged that the need for collective action was made more urgent by the protests and violence that shook Baltimore following Freddie Gray’s death in police custody in 2015. These events grew out of the city’s history and current conditions of profound racial and economic inequality — circumstances that BLocal is now working to transform.
We can hope that even before the death of Freddy Gray the diverse employers now partnering in the BLocal initiative understood that Black lives, and the economic security that is key to empowering them, are of value and worthy investment.
However, if protests and violence were the symptoms that helped galvanize BLocal and the participation of many Baltimore employers, businesses in other cities can take this as a lesson to be more proactive in their own community-building efforts. We know that to truly address the underlying problem of economic insecurity, we need to counter the public and private sector policies and systems that have entrenched poverty in communities across the country, especially in communities of color.
So, here’s a question: why can’t initiatives like the one Hopkins developed, and other Baltimore employers have since joined en masse, be undertaken by businesses in cities across the U.S.?
In fact, Baltimore is not alone. Recent initiatives in Minnesota and Oregon have similar key features: multiple employers make commitments to achieving clear, measurable, numerical goals and provide support for strategies to achieve those goals.
In Minnesota, the Central Corridor Anchor Partnership involves universities and health care providers who have committed to targeted goals regarding employment in the Twin Cities region. These include increasing employment from Central Corridor zip codes from 13 percent to 18 percent; reducing the racial employment gap in these same zip codes from 14 percent to 10 percent; and achieving racial diversity goals across all job categories. Employers participating in this regional development initiative also committed to increasing local purchasing by 5 percent over the 2012 baseline. By pursuing clear, measurable goals, this program helps increase income and build wealth in communities that have previously been left out of the strong regional economy.
In Oregon, the pilot program Clean Energy Works Portland set and achieved targets for a large number of participating contractors hired to improve energy efficiency in the city. Examples of employment targets through this program included ensuring that earnings for all workers were not less than 180 percent of Oregon’s minimum wage, and that historically disadvantaged or underrepresented people, including people of color, women, and low-income residents of the city, performed a minimum of 30 percent of total trades and technical project hours. Moreover, a minimum of 20 percent of all contracts were targeted to businesses owned by historically disadvantaged or underrepresented people, including women and people of color. Again, the ultimate effect of these targets, which were not only achieved but surpassed in some areas, is to increase income and build wealth for groups that have been historically underserved and excluded.
Across the country, these initiatives demonstrate the powerful potential for businesses and other employers to expand economic opportunities into communities that have long been left out. Business-driven initiatives, public-private partnerships, and collaborative efforts with advocacy organizations and other nonprofits can all be effective in opening the window of opportunity.
In the San Francisco Bay Area, the Insight Center for Community Economic Development works in partnership with health care organizations that employ residents of Oakland and Richmond to increase employment, retention, and advancement of young men of color though HealthWorks East Bay, an Insight Center initiative.
To show the health care organizations how to achieve success, HealthWorks East Bay helps them understand successes such as BLocal, Central Corridor Anchor Partnership, and Clean Energy Works Portland, and the key feature they share: multiple employers making commitments to achieving measurable goals and providing support for strategies to achieve those goals.
We have a great deal of work to do to increase economic security and overcome and transform the policies and systems that that have entrenched poverty in so many communities across the country, especially communities of color. Employers involved in these opportunity-building initiatives are stepping up to make a difference in their communities, and they are making it easier for other employers to do so. We need to foster and encourage collective support for more of these initiatives, which can bring both income gains and wealth to communities who need and want to work, grow, and thrive.
For more information, contact the Insight Center for Community Economic Development.
Thanks to Amy Scott for her Marketplace article, and its information about HopkinsLocal and BLocal: http://www.marketplace.org/2016/05/11/world/rebuilding-baltimores-economy-zip-code. Marketplace is produced and distributed by American Public Media (APM), in association with the University of Southern California.