2014 in Review: ICIC’s Top Economic Development Headlines
Written by Amanda Maher
It’s been quite the year. A welcome drop in oil prices, a surging stock market, a stronger job market and city and state-specific minimum wage increases were all economic stories that dominated the media. Meanwhile, as the U.S. celebrated the 50th anniversary of the “War on Poverty,” stories like the growth of income inequality brought us back to reality. Heading into 2015, this is one of the reasons why ICIC’s commitment remains as strong as ever to improve the economic future of America’s inner city residents—those who often get left behind amid other positive economic news.
But before we do so, we’re taking a look back at ICIC’s most popular inner city economic development stories of 2014, which included, not surprisingly:
- Key Battlegrounds for the War on Poverty: This “Inner City in Focus” Infographic highlights many sobering statistics around poverty, namely, that poverty remains overwhelmingly concentrated within the urban core. More than 30% of inner city residents live in poverty versus less than 10% in the suburbs, and unemployment is 5% higher in inner cities than the national unemployment rate as a whole. Understanding the geography of poverty is critical when devising strategies to tackle it. Read more.
- Industrial Jobs Provide Real Opportunity for Inner City Residents: Given that unemployment in inner cities remains a pronounced challenge (see above), more cities should be eyeing the industrial economy as an opportunity to create well-paying jobs for lower-skilled residents. ICIC studies find that industrial jobs – including those in manufacturing, transportation, construction and wholesale – have an average annual salary of $45,000, which represents a 200% increase over minimum wage and a 40% increase over median retail wages. Moreover, 65% of these jobs do not require a college education, which lowers the barrier to entry. Read more.
- The Affordable Care Act Opens Hospital Doors to Community Building: In order to receive federal tax-exempt status, hospitals have to provide a specific level of community benefit to local residents. Traditionally, hospitals have done so through direct subsidized healthcare. But with the ACA expanding Medicaid and health insurance coverage to millions of Americans, hospitals may be able to shift resources away from subsidized care and toward proactive community investments such as increasing employment, income, community safety and housing—or “upstream” social determinants of health. Read more.
- The Anatomy of an EB-5 Investment (feat. Brooklyn Navy Yard): The EB-5 Immigrant Investor program, initially launched in 1990 to use foreign direct investment to create jobs in high poverty and high unemployment urban and rural areas, has experienced a rapid uptick in applications over the past few years. While most EB-5 investments have been used to facilitate large real estate deals, ICIC finds that the EB-5 program could also be used to finance infrastructure improvements – a must when developing business-friendly environments. Read more.
In 2015, ICIC will continue its research and strategy for inner city economic and business development. We will continue to investigate the three primary drivers of a strong urban core: cluster development, inclusive business ecosystems, and firm development (including capital access, capacity building and management education). To that end, and in partnership with JPMorgan Chase, ICIC will begin 2015 by taking a deep dive into the impact of cluster strategies on small business growth in U.S. cities. Stay tuned!