A Progressive Economic Development Agenda for Shared Prosperity: Taking the High Road and Closing the Low (pdf format, 36 pages)
Elected officials and policymakers are under intense pressure to do almost anything that might create wealth and jobs. Their operating environment is characterized by corporate threats to relocate (or not come at all) unless they receive public subsidies, along with increased job, income, and production insecurity from globalization, outsourcing, and lower-cost imports. In this context, economic development is vitally important for America's state and local elected and appointed officials. Never has so much political and public financial capital been expended on its behalf. Despite tight state budgetary constraints, it rarely suffers cuts, and citizens now expect state policymakers to take some responsibility for the workings of their economy.
Economic development requires a dynamic, adaptive regional economic engine that drives the wealth generation process. If one wants economic development to benefit low income community members, there must also be effective strategies for expanding opportunities for the economically disadvantaged. Traditional tools, such as tax relief, development subsidies and supportive training, are ineffective, inefficient or insufficient when it comes to expanding economic opportunities in the 21st century. While many economic development efforts have successfully created and harnessed that engine of growth, few have promoted more inclusive approaches that benefit low income households. Strong and sustained growth increases income and mobility, but its reaches are limited unless explicitly directed at those portions of the population that have been left behind historically.
Over the last few decades, wages for those in the lower income quintiles have largely been stagnant, resulting in a growing legion of full-time workers who are poor. At the same time, increasing numbers of employers have cut back on benefits like health insurance coverage and pensions, further jeopardizing financial security for working Americans. Job insecurity is rising with firms downsizing even in good times. Affected workers include blue- and white-collar workers, some of whom find themselves on a treadmill that takes them from unemployment insurance to work to freelancing and back again.
The benefits from economic growth have not been widely shared. Wages have not reflected the increases in productivity. Union job premiums have shrunk. Those in the top income brackets have enjoyed large increases in their standards of living while poverty rates have climbed. There has been a major shift in the balance of power toward businesses, as unions have declined in their membership base, the number of deregulated markets has increased, and the government has reduced its policing of the labor market and its spending for federal safety net and training programs (with the exception of the EITC and Medicaid).