Friday, September 18, 2015

Just growth: it's all about the boats

A rising tide lifts all boats - John F. Kennedy

Boat people

The provenance of this phrase "a rising tide lifts all boats" has been traced to the letter head slogan of the New England Council, a regional business organization.* It was used by President Kennedy throughout his political career and the use most often cited is a speech he gave in October 1963 defending a major Federal infrastructure project in Arkansas.
These projects produce wealth, they bring industry, they bring jobs, and they bring wealth to other sections of the United States. This State had about 200,000 cars in 1929. It has a million cars now. They weren't built in this State. They were built in Detroit. As this State's income rises, so does the income of Michigan. As the income of Michigan rises, so does the income of the United States. A rising tide lifts all the boats and as Arkansas becomes more prosperous so does the United States and as this section declines so does the United States. So I regard this as an investment by the people of the United States in the United States.
"A rising tide..." is a common enough phrase now. Its use usually poses as an easy answer to difficult questions regarding who benefits from economic development like that promised Rochester as a destination medical center. Like "High wage jobs create low wage jobs," uttering "A rising tide lifts all boats" frequently comes with the assumption that nothing more need be said.

In usage it goes something like this: "A rising tide lifts all boats," someone declaims. Those who own the boats nod approvingly.

Of course, "A rising tide lifts all boats" is only reassuring if one has a boat. Some do not have boats. Some boats are not in good repair. Some boats are very crowded. Rising tides can swamp some boats. People without boats might drown (or, as we also hear to approving nods, they "sink or swim" and that seems to be all that needs saying about that).

Boats and tides

Recently two economic data points were reported that say something about boats and tides.

The first is the Bureau of Labor Statistics County Employment and Wages Summary that came out yesterday (15.09.17) that reports Olmsted County had the greatest percentage increase in the average weekly wage in the first quarter of 2014 -2015 of the 342 largest counties in the United States. Though it ranked 303 in job growth, Olmsted County did place second in the increase for the average weekly wage ($120).

The second is the release yesterday of the U.S. Census Bureau American Community Survey that reports that the median household income for African Americans in Minnesota dropped by $4,500 in a single year. Poverty rates for blacks rose from 33% to 38%. In Olmsted County, we get reports yesterday that 50% of blacks live just above poverty.

Switching metaphors

These two data points don't compare apples to apples, but they do rest in the same basket of fruit. For me that basket is labeled "just growth". According to Benner and Pastor, just growth includes "economic expansion and social equity" and "an inclusive conversation about how best to achieve economic inclusion."

Among the factors they found that contribute to just growth is building a significant Black middle-class.
First and most directly, improved economic opportunities for African Americans helped raise income levels for a sector of the population that is all too often over-represented amongst the poor. Second, this middle-class presence was associated with more Black-owned businesses that were also more likely to provide employment opportunities for African Americans (even if just through the impact of social networks on hiring practices). Third, it resulted in more African Americans being represented in leadership positions throughout the region. These leaders, it was thought, were in both political and economic areas but the key thing was that they had both an interest in growth (typical of the middle class) but also an historic (and ongoing) experience with exclusion and thus a commitment to equity.
These outcomes did not the result from an "invisible hand," but rather intentional strategies to build diverse and inclusive economic communities.
...[T]he basic argument here is that having a substantial proportion of middle-class residents of a minority, typically disproportionately poor, racial group will result is less 'policy distance' between the poor of the region and regional leadership making decisions.....Keeping policy closeness the is task of organizers, movement builders, and civic leaders, and keeping and building a minority middle class might be the gift that keeps giving at least in terms of growth with equity. 

Back to boats

President Kennedy also said that day in October 1963, "I would like to see us in this decade preparing as we must for all of the people who will come after us." In Rochester, the conversation we must have in this decade (and the next) cannot be just about the rising tide, it must also be about boats. That is to say, it must be "a conversation about how best to achieve economic inclusion." Conversations about who has a boat and what shape is it in.

Rochester's rise to the #1 spot on's 2016 list of the Top 100 Best Places to Live is predicated in part on two local economic growth initiatives - DMC and Journey to Growth (J2G). Both of these initiatives contain or have links to strategies to include and promote participation of minority owned businesses.

The Supplier Diversity Initiative is a collaborative effort of Rochester Area Chamber of Commerce, the City of Rochester, Mayo Clinic and Rochester Area Economic Development, Inc. The City of Rochester also has developed a Minority and Women Owned Business Enterprise Utilization Plan as required by the DMC legislation and approved by the council last year.

These initiatives are important tools in building and maintaining boats for the incoming tide. The opportunities provided by these initiatives should be widely available and increased. The impact of these initiatives should be monitored closely and reported regularly. Any DMC or J2G metrics for economic growth should include measures that gauge economic inclusion.

“We may have all come on different ships," said Martin Luther King, Jr., "but we're in the same boat now.”


* see William Safire, Safire's Political Dictionary (1993) pp. 627-628

Note: Portions of this post appeared previously in June 7, 2013. See also August 26, 2013

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