Is Traditional Economic Development DeFacto Discrimination?

Instead of a fixation on creating new high wage jobs that are inaccessible to the marginalized community (and largely filled by non-residents), a focus on creating new minority businesses could yield a more equitable approach to all Pensacola citizens. The current economic development approach in effect is De Facto economic discrimination against marginalized citizens.

David Nordfors in a November 5, 2018 article[1] entitled Make People Valuable Again stated: “The problem today, we suggest, is that our innovation economy is not primarily about making people more valuable; it is instead about reducing costs.  The main danger when workers are seen as a cost (which is now the case), cost-saving, efficient technologies will compete to lower their cost and thereby their value. The “better” the innovation, the lower the worker value. People are struggling, especially in marginalized community, to stay valuable in a changing world, and innovation is not helping them.”   The City of Pensacola can make people more valuable by guiding them to cope in a rapidly changing business environment.

The Pensacola economy is accelerating, but this encouraging progress is leaving many behind. The key to sustaining Pensacola’s economic growth can be found in the low-income and marginalized communities.  Lifting marginalized groups could dramatically boost the economic prosperity of the entire city with coordinated support from the private, public, and social sectors.

Pensacola is particularly hard hit as a substantial number of marginalized populations have been left behind (Figure 1).  The African American community continues to be adversely affected.  Although that community represents 29% of the population, black owned businesses represent 22% of all businesses. 32% of the African America Community is in poverty as compared to 9% of the white community.  Although the unemployment rate in the area is now 4.5% (September 2018) the black community unemployment remains disproportionately high hovering around 16%, further isolating the pockets of poverty in the city.

According to the Kauffman Institute [2]Our economic future requires education that prepares students for the future workforce. The ‘soft’ skills that come with an entrepreneurial mindset will be valued in a future transformed by technology.  “What we’re seeing today, what workers and employers need isn’t being met by the existing system,” said Christopher Cabaldon, mayor of West Sacramento. Sparking the curiosity for knowledge in people is the key to solving problems. That’s the basis of entrepreneurship, Sampson said. He believes more immersive programs will provide consistency for students to stick with skills.  For many, especially in the marginalized communities, it requires more than just a diploma, certificate, or degree to access available high wage jobs, it takes guidance and assistance of overcome structural barriers.

One way to overcome these barriers is to build new businesses owned and operated by members of the marginalized communities.  Although overall economic growth of Pensacola is following the U.S. trend, the formation of new businesses in the area has collapsed to the point where company births and deaths offset each other (Figure 2), resulting in little gain in new locally driven opportunity.  A focus on new business creation in marginalized communities could reignite city-wide company growth.  There’s fluidity in everything now, so there’s definitely got to be fluidity in economic development.

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Figure 1

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Figure 2

[1] https://techcrunch.com/2018/11/04/make-people-valuable-again/

[2] https://www.kauffman.org/currents/2018/07/our-economic-future-requires-education-that-prepares-students-for-the-future-workforce?utm_source=newsletter&utm_medium=email&utm_campaign=iaw_12_20_2018