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Future-Focused Education

Don’t stop thinking about tomorrow,
Don’t stop it’ll soon be here…
Yesterday’s gone, yesterday’s gone.

Christine McVie

Over the summer I wrote about the importance of having an ecosystem that would enable the poor and disadvantaged to succeed – to rise out of poverty. I used a quote from Bobby Unser to identify the key attributes of that ecosystem – preparation and opportunity – and went into some detail about what opportunity is, and isn’t. But opportunity by itself isn’t enough – our enabling ecosystem must help the poor and disadvantaged recognize opportunities and provide them with the tools to seize them.

And that’s where education comes in. A strong educational system is a hallmark of a resilient community. In these communities everyone has a good chance to succeed. Even the poor and disadvantaged are prepared to seize the opportunities that are there for them. While there are already too many voices screaming out what an education should be, let me softly come at it from a slightly different direction.

Obviously, I’m not an educational expert (I’m sure some of you sometimes wonder if I’m even educated, or an expert in anything). But what I think we all need to focus on is education for what. That’s why the song lyrics from Fleetwood Mac – the what is to be ready for whatever tomorrow brings. I want our kids – all of them – to be ready to be able to survive and thrive in the world to come. And I want them – all of them – focused on their futures, and not dwelling on their parents’ past. After all, yesterday’s gone…

A farmer in 1800 would be doing things much the same as his forefathers in the 16 and 1700’s. By 1900, he would be very uncomfortable with the mechanization of farming, but would still recognize many of the basics he knew. That same farmer really would be lost in the world of precision farming based on information technology we have today. Further, he would not be able to cope with the accelerating pace of change in our world; that didn’t happen in his.

So, to me, a future-focused education has to provide the following:

An accurate understanding of the path to the present and possible futures. As I’ve often said before, trajectory doesn’t have to be destiny, but it takes action to set a different course. To be future-focused means knowing how we got where we are, where the world is heading and what its drivers are. This means our education system has to provide an accurate picture of what we know about our past and our present and where the world may be going. That picture can’t be black and white; whether we like it or not, we’re awash in a world of grey. And the picture shouldn’t be just shades of red or blue.

To be more concrete, let me use climate change as an example. The global climate is changing; it is getting warmer on average, and has been (by fits and starts) since the 1700s. Sea levels are rising on average. But the sea level at some locations is actually falling; some locations are actually seeing a long-term cooling trend. Students need to understand what is happening to their local climate. Coastal development coupled with poor land use decisions has resulted in greater devastation due to storms, i.e., the number and intensity of the storms we’re having has stayed about the same but the damage is greater. Students need to be taught the facts not just about climate but about the drivers that have put so many people and so much property in harm’s way.

The ability to learn. The amount of new knowledge is growing exponentially; there is no sign that this is abating. No one can expect to grasp all of it. But being future-focused requires that we are able to restock our mental shelves with new information and cast aside what’s no longer useful. Many have talked about the skills and sources that are necessary for continued learning; often overlooked is the personal element that has to underlie their use. Our education has to help us to find our place in the global kaleidoscope. If we know that and understand the world around us and how it might change we can begin to apply the general lessons of how to learn to gain the knowledge we will need for future success.

Opportunities to form networks. We humans are social animals. For most of us, the networks we form are important components of our success. Throughout my life I’ve been fortunate to have lots of chances to network. As a kid I played football and baseball and soccer in school; I acted in plays; I worked on the high school yearbook. Throughout my life, the networks I’ve formed have provided social and emotional support when I needed it, and helped me to what’s been a great career (or three). Very importantly, my networks have been great indicators of future trends for me.

Our educational system needs to help students form their own networks. These are formed naturally through participation in sports teams, special interest clubs (e.g., chess, 4H, computers, gardening), music or drama groups, or junior ROTC. Not all kids will form lifelong networks (you can lead a horse to water but you can’t make it drink) but we need to make sure they have the chance.

Confidence. Confidence is probably the most overlooked component of success (this applies to communities as well). If you have the confidence of accomplishment you’re more likely to take steps to better yourself. No matter how benevolent our governments, the poor ultimately have to take the steps to lift themselves out of poverty. That means they need to have accomplished something or have developed some special skills (forming networks is one of those skills) to give them the confidence to act to better themselves. Participation in network-forming activities can provide this confidence, but there are other ways – sports, academics, home ec (for women and men), shop (ditto) – where accomplishment can lead to confidence.

In a previous post I noted that kids need “the experience of working with their hands. We have too many who took on too much debt going for a college education that hasn’t prepared them for a career. We need people in the crafts and trades – especially when disaster strikes. Roofers, plumbers, electricians even at the bottom of their professional ladders make much more than the poverty level, giving them the chance to accumulate some wealth.” Becoming confident is arguably more important than simply acquiring academic skills; we’ve all seen examples of kids with high grades who had virtually no life skills or street smarts.

Communication skills. Whether you’re a plumber or a CEO, you have to acquire information if you’re to succeed, especially as the world changes around you. That means you have to be able to read. In a networked world, you have to rely on others sometimes; that means learning to write and to speak coherently. Public speaking is probably the most basic of these skills; it needs to have greater emphasis in education. And our globalized world increases the value of being able to speak a foreign language.

Financial literacy. In an earlier post, I mentioned the importance of being able to handle money. All children need to become financially literate. Ignorance leads to bad decisions in handling money which leads to a lack of reserves when times get bad. This is especially important for the poor; they have less to manage and the greatest need to manage their money wisely.

Technological literacy. Information technology has been the greatest accelerant of change the world has ever seen. However, we are on the cusp of even greater change brought on by the intersection of information technology, psychology and the health sciences. The nature of work will change; life spans will potentially become much longer; how we learn will change. In other words, technology will continue to be a major change agent shaping our futures. Technological literacy thus has to be a key component of a future-focused education.

Ultimately, community resilience is predicated on people and institutions ready to take on the future. That’s why education is more important now than at any time in the past. But education cannot simply be a presentation of a panoply of facts; it has to be focused on preparing everyone – especially the poor and disadvantaged – for the future. Unless the young acquire the knowledge and skills I’ve listed, they will be ill-equipped to deal with future change. And thus our communities will be less resilient. Don’t stop thinking about tomorrow.

The Roaring Twenties (and beyond)

It’s tough to make predictions, especially about the future.— Yogi Berra

This is the time of the year when all of the crackpots with crystal balls (most of them cloudy or cracked as well) try to predict the future. I’m going to join that crowded club (some might say I’m a charter member!) but I’m going to focus on communities.

Right away, you know that any predictions are going to be fuzzy – our communities are too diverse in size, in culture and in structure for any prediction to be universally true. Thus, I will highlight relevant trends for the coming decade (and beyond) and in a later post I’ll try to project how these trends will impact communities and their resilience.

Let me set the stage by taking a quick look back at the decade just past (the Twittering Teens?). Globally, it likely was the best decade ever. For the first time less than 10% of the world’s population was mired in extreme poverty. Global income and wealth inequality – especially in Africa – was reduced. Infant and child mortality fell to record lows. Famine became all but extinct. Malaria, polio and heart disease are all in decline globally. Globally, life expectancy continues to rise (except for middle and lower class white men in the US). The world also is on a more sustainable path – in much of the first world the use of resources to make “stuff” declined; not only on a per capita basis but on an absolute basis. Look at how little raw bauxite goes into aluminum cans now compared to 50 years ago, for example. We need much less land for food production – one-third to produce the same amount of food than was needed 50 years ago. Not to mention dolphins back in the Potomac for the first time since the 1880’s!

However, in the developed world there has been a growing sense of unease. The cultural clash between populism and statism – between Big Everything and the Little Guy – has become downright vicious. Brexit and Boris; Bernie and the Donald; the Elite and the Deplorables are manifestations of societies in which Big Everything (government, business, unions…) is all about the numbers and seemingly has lost the ability to care about – or even listen to – individual people. As a result, we see more and more anti-social behavior: little things like people making U-turns in the middle of a four lane road; bigger things like preventing speakers we don’t like from speaking. This has led to near-gridlock on the national level, which is trickling down to many communities.

This cultural clash has been compounded by social media that have devolved into echo chambers. From where we live to where our kids go to school to who we interact with on Facebook and Twitter to what we watch on TV, too many of us are only hearing what we already believe from those like ourselves. Too few of us are willing to listen to thoughtful people who see things from a different perspective. As a result, we seem to be stumbling around the problems that surround us because our ideological red- or blue-tinted glasses keep us from seeing those problems and their possible solutions in proper perspective.

Perhaps one of the most important trends for communities center around population. Toward the end of this decade, and especially in the next, the Baby Boomers will start to exit the stage. They’ll take with them their pension liabilities and their health issues. If communities can survive the pension woes coming this decade, they’ll likely have more to spend in the 2030’s.

However, many communities will have a hard time doing that. The exodus from the high tax states (e.g., CA, NY, IL and NJ – the ones with likely the most unkept promises to retirees) will continue. Florida, Texas and the other southern states, and some of those in the western US, will experience growing pains as they try to accommodate the newcomers (Austin’s problem with homelessness – and the city’s non-solutions – sounds like something from California.). Immigration will add to these stresses.

College towns are likely to feel an even bigger pinch. The much smaller generations born after 1965 will lead to closures of many institutions of higher education (one study predicts one in six), or mergers (one study predicts one in five). If the push for free public education reaches fruition, private IHEs – relying as they do on tuition – will put in a vise. In turn, this will reduce the financial, human and social capital of their home towns.

Economically, the US will – at best – muddle through; the economies of much of the rest of the developed world are essentially stalled. Even China’s amazing growth seems to be slowing. There likely will be another recession within the next five years in the US (maybe sooner; Europe is probably already there), with the potential to rival the Great Recession in impact. However, the Federal Reserve and other central banks (with their near-zero to negative interest rates) and national governments (with their mountains of debt) will have even more difficulty responding to this one; recovery will be even slower. And it appears that the policies of the Federal Reserve and other central banks will continue to punish savers and inadvertently promote wealth inequality. The coming recession will reduce the apparent wealth at the top end, tbough. I intend to examine the “wealth gap” in a later post – closing it in a wise manner could have a huge impact on our communities.

A recession will likely accelerate two other trends: business consolidation and the growth of e-commerce. The growth of government regulations and the pressure of global competition has led to a situation in which every major industry is dominated by only a few companies. Credit Suisse estimates that by 2025 over one-fourth of all the malls in the US will be closed. E-commerce will make up to at least half of the retail economy by the end of the decade. Recession, business consolidation and e-commerce together spell big trouble for small businesses. After the Great Recession, job growth was dominated by intermediate and large companies for the first time; generally smaller businesses have been the driver of recovery. And small businesses are the lifeblood of the downtowns of many small and intermediate size communities. They’re the ones who sponsor youth sports teams; notices about community events are posted in their windows; they are often the anchors for the community’s sense of place.

Small businesses are also the entry point for most young people into the workforce. Spain, Greece and our own experience in the Great Recession point to disproportionate youth unemployment (This is also an unintended consequence of raising the minimum wage). Some of these youth will become isolated from their communities; with the potential for increased crime and drug use.

In fact, youth unemployment, in fact all employment will continue its inexorable change. As my friend Andy Felts is fond of tweaking me about, AI (and, more broadly, automation) will continue to erode the need for low-skilled workers. Past revolutions/evolutions in the nature of work have generally led to the need for roughly the same workforce in terms of numbers, but very different skill sets. Less farmland needed for food production and consolidation have led to fewer farms and farmers. We frankly don’t know what the advent of self-driving trucks and cars may mean for employment of cab and truck drivers, for example.

And perhaps the least recognized trend – the compression of time: the accelerating pace of change. Our communities are being assailed by demographic and social change, changes to their economic and environmental landscapes, and most of all changing expectations by their members. These are coming at communities faster and faster. As pattern seekers, our community leaders generally expect to have as much time to respond to these changes as they had “the last time,” but that expectation is no longer valid. To adapt to these changes requires both time and a willingness to take action. This places a premium on a community’s ability to foresee change and think strategically. I’ve written about this before, but I’ll explore this further in a later post.

The challenged and community resilience

Several years ago, CARRI embarked on a massive undertaking focused on developing – and then testing – a community resilience system.  During a meeting of its Community Leaders Working Group, I was asked why we had included “The community works to maximize the value of those with special challenges” as one of our important community functions.  In fact, two of the most in-my-face questioners (both former mayors of sizable cities) actually accused me of being politically correct (If this were true, it would come as a huge shock to anyone who has ever worked with me, not to mention my wife!).

I thought it would be worthwhile to talk about who are the challenged, and why it makes practical sense for communities to treat them as potential assets, not liabilities.

If we look at our communities today, 5-10 % of the population have some debilitating mental or physical condition.  One in eight Americans receive at least part of their food through food stamps; one in five of our children lives in poverty or extreme poverty.  Those with disabilities are 1.5 to 3 times more likely to live in poverty than those with no disabilities. Fully one-third of those who could be employed have exited the labor force.

After a community is hit by a disaster, recovery makes huge demands on the permanent personnel who actually keep the community running.  More people are needed to remove debris.  More people are needed to handle the flood of permits for rebuilding.  People are needed to reconnect families and to help get services to those who need them.  Many communities meet these needs by hiring “outsiders” to provide these services, but if they do so, they lose in at least two ways. 

  • These communities send the resources to pay for these services outside the community.  Since the federal government will pay for many kinds of temporary workers after a disaster, it makes good sense to hire these workers from within the community – to keep as many precious dollars within the community as possible.  The challenged – particularly the employable unemployed – should be the first resource tapped by a community (To their credit, BP agreed to do just that in southern Louisiana communities affected by the oil spill.).
  • These communities have to spend more of their resources helping the challenged recover from the disaster than they otherwise would. That means much less accomplished with limited resources and possibly a longer recovery period.

In other words, communities who don’t use the challenged to aid in the extraordinary challenges of recovery are turning potential assets into real liabilities.

Thus, by making use of its members who face significant challenges to meet the extraordinary demands of recovery from a disaster, a community can keep dollars in the community while maintaining a more productive and motivated permanent staff.  This isn’t political correctness but enlightened self-interest.

Dispatchable capital … and an announcement

A defining characteristic of community resilience … is that resilience includes multiple dimensions … encompassed by six assets (or “capitals”) across a community: natural, built, financial, human, social and political. – National Academies

Recently, I had occasion to read the National Academies’ report on building and measuring community resilience ( from which the quote above was taken; the report is available here). Jennifer Adams and I are working on a paper together on the application of stress testing (as is done by financial institutions) to communities, and this report will be one of the references. Together these prompted me to rethink what it means for a community to become more resilient.

In the quote above the National Academies’ committee refers to Flora and Flora’s seven community capitals (BTW – I wonder why they didn’t include “cultural capital.”). They lament – accurately – that few (I would say “none!”) of the tools that claim to measure community resilience actually measure all of these. I think there are several reasons for this:

• We know these community capitals are important for resilience, but we really don’t have a common framework that ties them together;
• Lacking this common framework, it’s not clear what we should be measuring (e.g., the “currency” for each type of capital);
• We know they are – or at least should be – important for resilience, but we lack a detailed basis for applying that knowledge in our communities;
• Specifically, this means that we’re not exactly sure what impact increasing one or more of these capitals has on a community’s resilience.

In the following, I’m going to focus on recovery from disaster, as well as the nature of capital. I’m going to create a new phrase – dispatchable capital or assets – to try to tie these two together.

Those of you who’ve stuck with me for a while probably recognize that most of my writings on community resilience have been aimed at systematizing the concept and making it more of a scientific field of study. My motivation has been that by doing so we can build up a cohort of community resilience “technologists” who will use the science to make our communities better. As part of that effort, about two years ago, I developed what I called a practitioner’s model of community resilience.

This was based on my attempt to weave together several intellectual skeins to help me make better sense of all of the information that’s out there. I was heavily influenced by the modeling work of Scott Miles, Cimellaro, Florio and others; the “indicators” work of Cutter (and a host of others); and conversations with Liesel Ritchie and with the COPEWELL team at Johns Hopkins (This is not to tar them with my own brush – my mistakes are my own! – but merely to establish that I pay attention to what others are thinking.). The model was presented as

Functionality =
Initial Functionality + Direct Impacts + Indirect Impacts + Competence•Resources,
for each part of the community

The cartoon below is intended to illustrate what the words mean. If a disaster occurs, each of the community’s “common functions” (e.g., providing water, providing shelter) undergoes direct and indirect impacts. These give rise to a loss of functionality (denoted as L on the cartoon). The community recovers that functionality by deploying resources (R). Its competence in doing so (w) can be thought of as its efficiency in using resources.

Let me take a wild leap here – think of the resources to be deployed as community capital. Since physical damage (e.g., to infrastructure) from a natural disaster will require financial capital for recovery, I’ll look at that first and then try to generalize to other types of community capital. Liquidity is a term often used in finance which simply represents how easily a financial asset can be deployed. Cash is the most liquid asset a community may have available; land is probably the least liquid asset most communities have. Since we’re thinking in terms of recovery from a disaster, i.e., a long time – I’m going to use the term “dispatchable” capital to represent capital we can employ for recovery from a disaster (this parallels the idea of dispatchable electricity generation that can be immediately deployed to meet changes in demand). In terms of finance, this could mean a local government’s Rainy Day Fund, homeowners’ insurance and savings, and could include federal grants triggered by a Presidential declaration (depending on the time frame).

Recovery from a natural disaster will, of course, require other types of capital as well. Damage to neighborhoods will require human capital. People to prepare permits, building inspectors, construction craftsmen and other will be needed to recover from disaster. Lack of any one of these will hinder recovery. For example, one of the factors that held New Orleans back after Katrina was that the demand for construction professionals exceeded the supply. In Dan Alesch’s great little book about long-term recovery, he cites similar examples relating to permit writers. For most communities, there will be personnel who can do the job, but simply not enough of them, i.e., not enough dispatchable capital. In addition,m different sorts of disasters require a varying mix of capitals, e.g., social unrest requires less financial capital but more institutional and social. A pandemic may make higher demands on both social and built capital.

To me this implies that more resilient communities have more of the dispatchable community capital they need for the risks they face. I know this isn’t particularly profound but I think it’s useful. If a community looks at a particular risk it faces, community capitals provide a systematic way to look at what’s required for recovery. If the community wants to become more resilient, it has to ensure that the amount of dispatchable capital – financial, human, and so on that can be readily deployed – it has will meet the demand. In some cases, that may mean setting up special financial reserve funds. It may mean cross-training personnel to handle increased demand. It may mean designating areas to be used for large amounts of debris. Or, the systematic look may show that there is sufficient dispatchable capital to meet the heightened demands of a recovering community.

And what about that “systematic look?” The National Academies’ report acknowledges the need to look at community capital, but doesn’t take the next step to actually explicitly state what that really means. In a paper I wrote for a conference three years ago, I concluded that

None of them [the community resilience measurement systems] examines community finance (e.g., insurance in the private sector or creditworthiness in the public sector), yet financial resources are essential for recovery. None of them gives more than a glance at the community’s governance (how and how well decisions are made and implemented), yet the depth of the disaster, and the duration and ultimate success of the recovery directly depend on the community’s governance. Rather surprisingly, little light is shone on the vulnerability of the natural environment, primarily because of a lack of data. For the same reason, those approaches that rely on publicly available data also provide decision-makers with little information about infrastructural resilience.

If our goal is to have a resilient community, determining how much dispatchable capital it has and will need is an important step toward that goal. In this context, recovery from extreme events depends on dispatchable capital, i.e., increasing community resilience means accumulating community capital, of all types. Our measurement systems don’t address this – yet – but they should. I hope the concept of dispatchable capital can spark discussions about how to improve them.

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A head’s up…

Though all of us involved with CARRI remain active in the field, none of our work is being funded through CARRI. As a result, we are going to retire the name and – more importantly – close down the website. We appreciate the work done by the Meridian Institute to maintain the site and provide us with email and other services, even without a return on that investment. Thus, this is the last of my blogs that will be posted here. We are fortunate to have several options open to us; we’ll be making a decision early in September. I intend to continue to be an intellectual provocateur (or to clutter your inbox, if you prefer). I appreciate the time you spend with me.

A Tale of Two Towns: Sometimes Resilience Just Isn’t Enough

One is a town in Kansas.  A small town.  In the last ten years, its population has halved.  In 2010, it had less than half the homes it had ten years earlier.  It was hit by a devastating tornado in 2007, but that only accelerated the downward slide already under way.

The other is an even smaller town in Mississippi.  In the last fifteen years, it has lost a third of its residents.  Those remaining are among the poorest in the poorest state in the nation.  Over the last few decades, its decline has matched the decline of cotton as a cash crop.

Two towns, struggling for existence, each facing their own private disasters; for communities, disasters begin and end alone. 

The Kansas town was torn apart in many ways by the tornado.  Many buildings destroyed.  Many in the town deciding not to rebuild.  Others, among them the mayor, using the tornado as a wakeup call – an opportunity to reinvent themselves.  The remaining leaders of the community deciding to aim to become the hub of the Green Revolution.  They built a new City Hall to the strictest “green” standards; they formed a foundation to reinvent themselves as a “Model Green Community.”  They envisioned Eco-tourism as their new foundation.  Big Media hailed them; the press hounds came sniffing for their stories and wrote their praises and then left them, once again alone. 

The Mississippi town experienced no sudden shock – just a slow acid drip eating away at their economy and their vitality.  And they knew it was happening.  They watched with pride as their favorite son went off to Ole Miss to become the best football player in the state.  But like so many other young and not-so-young, he didn’t come back home.  Every year, the cotton gin – one of the main reasons for the town’s existence – got less and less business as the Delta’s deep loam was converted from cotton to corn and soy.  The press never came around.  The slow death of yet another sleepy cotton town isn’t really news to anyone, least of all the people living there.  They knew they needed to find another reason for being, and persistently searched for it.  But they never could find it, alone.

The people in the Kansas town and the people in the Mississippi town have each proved their resilience many times over.  Though they have seen their towns contracting around them, they have refused to give up, and continued to look for reasons for their towns to be reborn.  They yearn for their towns to return to the vitality they all remember, or think they remember, or want to remember.  But they can’t make it happen alone.

In Mississippi, the townspeople know they live in one of the poorest towns in one of the poorest counties in the poorest state in the nation.  The incomes of the people in the Kansas town are generally well below the national average.  Even after the tornado, the fraction of vacant housing is greater than the national average.  There’s not much need for an advanced education in either town.  Neither town is rich in resources, but both have a quiet pride in their heritage.  And so they go on, alone.

These are two real towns in our nation.  The townspeople are good and decent people with a dogged resilience that all of us can admire and seek to emulate.  But there are tens of thousands of towns like these across rural America.  Contracting towns surrounded by contracting counties, losing those they can least afford to lose to cities with greater opportunities. 

This is a somber tale.  Two towns – one still hoping, though the tide seems to be against them; and another whose hope is almost gone.  Both searching for a reason to be reborn, but searching alone. 

If we are to realize our dream of recapturing the resilience we remember, the first step I think is clear:  we must reach out both to the towns torn by tornadoes and those whose lifeblood is slowly dripping away.  We must help them find new purposes, new reasons for being.  We must be midwives to their rebirth, or they will die – alone.

Opportunity

Success is where preparation and opportunity meet.  — Bobby Unser

In my last post, I looked at poverty through the lens of community resilience.  I laid out my vision of what an ecosystem that would enable the poor to rise above poverty might look like.  Education is an important part of that “enabling ecosystem” – it’s the preparation side of Bobby Unser’s quote.  For the poor, economic growth – a thriving economy – is the key to opening the aperture of opportunity.  In this post, I want to look a little deeper at opportunity, again from a community perspective. 

Politicians and pundits too often use the term “opportunity” glibly and gloss over what it really means for those trying to escape poverty.  Very simply, opportunity for those mired in poverty simply means the chance to make their lives better.  New school clothes for the kids, real presents at Christmas, time to think about the future rather than worrying about the present.  That implies having discretionary resources, especially some savings.  The poor can’t improve their lot – they can’t become less dependent – unless they can earn more than what’s needed to survive.  There are several things a community can do to increase opportunities for those who need them.

Understand what opportunity is – and isn’t.  Opportunity is the chance for someone to improve their lot in life.  Increasing opportunities means things like encouraging job growth; or finding creative ways to get people of different social, economic and educational strata to get to know each other.  More generally, increasing opportunity means increasing the number of situations that people can use to better themselves (for physical scientists, it is akin to increasing entropy).   

Seattle WA offers a good example of what opportunity isn’t.  The city raised its minimum wage to $15/hr.  It clearly helped some but it also caused some smaller businesses to close.  And lots of low wage jobs were automated away.  In a similar vein, the Congressional Budget Office recently looked at a House bill that mandated a federal $15/hr minimum wage.  The CBO concluded that the increased wages would help about 1.3M of the working poor, but would also eliminate a similar number of jobs.  It would put another 3.7M jobs in jeopardy and increase the prices of the things we buy by $24B (assuming employers passed on the increased labor costs to their customers). 

She-who-must-be obeyed and I occasionally buy subs from Subway.  Our local store has this amazing black kid – Zion – who has the quickest hands in the East.  If I were to try to do what he does, I’d end up a bloody mess in the ER inside of an hour!  He is a student at our local college working to reduce the burden of his education on his family.  He is always pleasant and seems to have a great work ethic.  I’m not sure what he’s making an hour, but increasing the minimum wage would make it more likely  that Zion’s job would be automated away.  A well-intended but poorly thought out increase in the minimum wage could put his education and his future in jeopardy.  And let’s not forget that there are hundreds of thousands if not millions of good kids like Zion.  Is this the best policy choice we can make – help a few and close the door on many others?  Let us hope not!

Help – don’t hinder – entrepreneurs.  These are the men and women who are risking their capital to create new businesses, which are the real engines of our economic growth and vitality.  In most communities, they are the prime creators of new jobs – they make up about 90% of all businesses..  They are the ones most likely to hire from within the community – giving kids a chance to get real world experience and hiring those who’ve been laid off or who have lost their jobs because a big company left town.  Small businesses are thus perhaps the most important conduits for opportunities.

Communities can help small businesses in several ways.  Encouraging community-based financial institutions is one way.  The Mary Queen of Viet Nam Community Development Corporation (CDC) in east New Orleans demonstrates the power of CDCs.  Formed in 2006, this CDC is working to provide health care, housing and social services to all of the residents of east NOLA – Vietnamese, African-Americans and Hispanics.  An interesting current project is re-development of of the Alcee Fortier Boulevard business corridor.  Community Development financial Institutions are able to provide the small loans needed to provide operating capital for a small business.

Many communities have one or more Opportunity Zones (OZs).  These potentially can be a powerful means to provide opportunities to businesses and individuals and to improve the community itself.  But community involvement is almost a necessity.  Several communities have facilitated investments in OZs by participating in “capital stacks” – multiplying the power of private investment through public debt and philanthropic contributions.

Excessive regulation has a huge negative impact on small businesses.  Depending on the community, complying with state and local regulations may cost small businesses about $10,000 per employee, and a similar amount for federal compliance.  As we’ve noted in previous posts, permitting requirements – and built-in delays – can also deter the formation of small businesses.  A classic example is the warping of the permitting process for new transmission lines in California which has prevented wider use of renewable energy, and ironically increased the state’s dependence on generation plants in Mexico that use fossil fuels.  And let’s not even get started on business taxes!  Of course, you in California can have an even bigger problem – your state government is doing all it can to impair all businesses, but small businesses are the ones hardest hit.  It should not be a surprise that California has the highest poverty rate when cost of living is taken into account.

As George Gilder* has observed,

Those most acutely threatened by the abuse of American entrepreneurs are the poor. If the rich are stultified by socialism and crony capitalism, the lower economic classes will suffer the most as the horizons of opportunity close. High tax rates and oppressive regulations do not keep anyone from being rich. They prevent poor people from becoming rich. High tax rates do not redistribute incomes or wealth; they redistribute taxpayers—out of productive investment into overseas tax havens and out of offices and factories into beach resorts and municipal bonds.

Resilient communities recognize the importance of building what Hasan calls an enabling ecosystem for all of their citizens, but especially the poor.  Preparing them to recognize and seize opportunities is a necessary part of that ecosystem – but it’s not sufficient.  Communities must also provide opportunities for the poor to seize and use to advance themselves.  Thus, as Unser says, success requires both preparation and opportunity – our communities have both a moral obligation and practical incentives to help the poor to help themselves.

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*  George Gilder is a little bit like Scotch whisky – an acquired taste.  However, he is an outstanding intellectual provocateur, well worth reading.