With 23 million people unemployed, underemployed, or discouraged from looking for work, our nation desperately needs a new strategy to for building an inclusive economy. The new report from Yale University's Jacob Hacker and Nate Loewentheil, Prosperity Economics: Building an Economy for All, is a welcome antidote to today's all-too-prevalent austerity economics. And to achieve the shared prosperity this paper challenges us to pursue, our policies must ensure that the nation's coming majority can participate in the economy and lead us into a new era of equitable growth.
Hacker and Loewentheil rightly put people-power at the center of the prosperity economics they advocate, explaining that prosperity "does not just drip down from current economic winners, but flows from all of us who work hard to gain skills and climb the economic ladder." After describing the current economic crisis of slow growth, skyrocketing inequality, a shrinking middle class, and stunted democracy -- and dispelling widely-believed myths like spending and deficits are America's biggest economic issues -- they lay out a policy agenda that is at once bold and completely sensible. Their policy recommendations are spot on: rebuild our nation's crumbling infrastructure, restore our manufacturing base, expand job training programs, revitalize distressed communities through comprehensive place-based strategies, provide universal pre-K, ensure every student who wants to can attend and graduate from college, create a pathway to citizenship for undocumented immigrants, end discrimination and disenfranchisement, and more.
For this policy agenda to be effective, it must create real pathways for people of color to shape the new economy, enter the middle class, and contribute to growth and democracy. Our nation is undergoing an unprecedented demographic shift. More than half the babies born in this country are now people of color. Demographers predict that the majority of youth will be people of color by the end of this decade and by 2042 we will be a majority people-of-color nation. The workforce will diversify even faster than the overall population, and as the baby boomer generation enters retirement, it is this cadre of diverse young workers who will take their place.
To build a prosperity economy, leaders in the public and private sector must recognize our demographic moment, embrace diversity as an economic asset, and prepare today's diverse workforce -- and tomorrow's -- for the jobs of the future. Our policy proposals must be grounded in an awareness of the barriers that hold communities of color back, and create specific pathways to greater economic opportunity for workers and entrepreneurs of color.
There are several ways in which a stronger focus on racial and economic inclusion could strengthen a prosperity economics policy agenda.
Take infrastructure, for example. Rebuilding the nation's bridges, roads, transit systems, and other public infrastructure, is essential for our global competitiveness and productivity in the long-term and can create millions of jobs in the short-term. But to get triple bottom-line returns from these investments, policymakers and communities need to ensure they connect vulnerable communities to their regional economies. By choosing projects that maximize job opportunities, targeting jobs and projects to the people and communities who need them most, and creating opportunities for local and minority-owned businesses, communities can achieve equity and growth at the same time. Federal policy can learn from localities like Portland, Los Angeles, St. Louis, and many others, that have implemented "community workforce agreements" on public works projects that include targeted hiring and job training strategies to ensure communities benefit from public spending.
Entrepreneurship is another important policy arena. Because entrepreneurs of color are more likely to hire people of color and locate their firms in communities of color than other firms, their growth leads directly to more local job opportunities. These entrepreneurs are a potent market force with huge untapped potential to drive innovation and growth--between 2002 and 2007, the number of minority-owned businesses grew three times as fast as white-owned businesses. But these entrepreneurs face significant barriers to accessing the capital, information, and training needed to launch and sustain successful enterprises. To maximize inclusive job creation, efforts to foster innovation and business development need to provide supports to help entrepreneurs of color succeed in high-growth areas of the economy and connect to larger-scale market opportunities. Business support organizations like Jumpstart, Inc. in Northeast Ohio (and expanding nationwide) are helping entrepreneurs of color succeed in developing high-growth, high-technology knowledge-economy businesses. Others like the Neighborhood Development Center in St. Paul are helping budding entrepreneurs of color develop business plans and launch enterprises. Federal policy should support these and other programs as a part of its innovation agenda.
And finally: To truly put people with employment barriers on track to move up in the world of work, we need to build a much more coordinated education and workforce development system that provides a pipeline of supports from "cradle to career." Comprehensive community-based child development approaches like the Harlem Children's Zone need to become the rule rather than the exception, and federal policy needs to support career technical high schools that prepare underserved youth for college and careers in high-growth industry sectors with good wages, such as Chicago's Austin Polytechnical Academy. Policymakers must also put an end to the "cradle to prison" pipeline that locks up one in every twelve black men and one in every 36 Latino men (compared to one in 87 white men). Necessary steps include reforming the criminal and juvenile justice systems (including approaches to school discipline), removing the legal barriers that prevent ex-offenders from gaining access to housing, services, and employment, and providing targeted training and employment supports to formerly incarcerated individuals.
Prosperity Economics provides an excellent policy platform for building an equitable and sustainable economy that matches America's hopes and aspirations. Across the country, communities have developed programs and policies to connect communities of color to economic opportunities. The nation is now undergoing an unprecedented demographic transition, and it is time for policymakers to incorporate these solutions into national policy.