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Last week’s Bureau of Labor Statistics employment report for July showed a sharp increase of 943,000 jobs from the previous month and a decrease in the unemployment rate, to 5.4%. However, the fact remains that the U.S. economy still lacks 6 million jobs from where it was in February 2020, indicating that there is still work to be done.
In particular, strong inequalities persist between racial and ethnic groups and between places. For many people and places, the economy never fully recovered from the Great Recession before the start of the COVID-19 recession. This continued distress has left millions of Americans with limited prospects for finding well-paying and accessible work, which affects their quality of life.
This is why it is important that Congress, as it considers additional investments to ensure the continued recovery, ensure that it invests deliberately and adequately in the distressed places that were left behind during the recovery. the last recovery. Specifically, as we proposed in a new report, Congress should leverage the country’s regional public universities as strategically located tools to reinvigorate many troubled areas. Such an initiative would be an important complement to other ongoing efforts to consolidate distressed communities and counter the country’s persistent regional divisions.
Congress has already started doing some of this work through the American Rescue Plan Act. The flexible state and local funding provisions of this legislation provide important support to places and people affected by the pandemic. Economic Development Agency programs such as the regional Build Back Better challenge promise to create a more equitable recovery. Yet Congress will need to do more to address geographic economic differences, which have been widening for nearly 40 years.
It is important to note that no political response will suffice to address the many challenges facing the country’s distressed communities. Part of the reason is that the challenges facing communities in distress vary. For example, a rural community in distress faced with the consequences of industrial decline on employment may have different needs than a low-income neighborhood located in a large metropolitan area.
In light of this, the federal government should continue its concerted efforts to counter the distress with investments at three levels:
First, Congress is expected to continue its solid work this summer to establish a set of regional technology hubs in 10 non-coastal metropolitan areas across the United States, with the goal of launching more robust technology and an innovation economy into promising areas outside the country’s main technologies. centers. A version of this proposal was incorporated into the US innovation and competition law that was recently passed by the Senate, with House action pending.
Second, Congress should consider a complementary program to ensure that every distressed region in the United States receives the support it needs to fully recover in the years to come. One suggestion in this direction comes from Upjohn Institute economist Timothy J. Bartik, who recommended a series of federal grants aimed at struggling regional labor markets, which have the potential to support more than a third of the world’s labor markets. labor markets nationwide and nearly 15% of the United States. population. Bipartite and bicameral legislation based on this proposal was recently introduced, indicating that the momentum to do more for the country’s distressed communities is real.
However, even large investments in restructuring the country’s innovation geography and investing in struggling regions will still miss a significant level of local distress. For example, Chicago would likely not be considered “distressed†when viewed at a metro area level. But seen at the neighborhood level (for example, using postal code or census tract data), it becomes clear that large parts of the metropolitan area are facing significant distress, including much of the south side. of the city and large parts of adjacent cities such as Chicago Heights and Gary, Ind. These more localized pockets of distress also need new investments to support a fair recovery. One way to do this is to leverage the anchor institutions located in these communities as vehicles to promote recovery.
This is why our third recommendation is that the country leverages its more than 400 regional public universities, located in communities of all sizes across the country, as anchor institutions to support the well-being of communities. local people in distress.
Regional Public Universities (RPUs) are four-year public institutions that are not “research 1†universities (schools that conduct the highest levels of research) or universities designated as land grant institutions under the Morrill Act of 1862. RPUs have a variety of benefits for communities: places with a RPU tend to have higher local incomes, higher local employment levels, and immigration flow. Evidence also shows that RPUs can help communities overcome economic downturns caused by declining manufacturing, loss of coal mining, or even the general business cycle.
We have identified at least 141 RPUs that are located in distressed communities in 34 states and Puerto Rico. To help these universities support their local economies during the recovery, we recommend providing federal grants of between $ 25 million and $ 50 million to each school for a range of economic and community development uses. The aim of such an investment is not only to directly support these communities, but also to catalyze additional investments from local partners, be they state or local governments, businesses or organizations. ‘non-profit and philanthropic organizations.
Parallel investments should also be considered, with a focus on marginalized communities. At the federal level, the government could, for example, assess policies based on their impact on racial equity. Likewise, more technical assistance should be provided to Native American tribes to access federal programs to which they are newly eligible. At the local level, cities need to ensure that their investment in public space is more equitable and consider new real estate models such as community ownership.
Each of these programs is unlikely on its own to solve the significant amount of distress affecting hundreds of places across the country, a problem that has grown over the past 40 years. However, an increase in federal funding focused on addressing distress at all levels, from the country’s uneven overall economic geography to the plight of local communities, could finally dislodge our stubborn spatial inequality.
As the federal government seriously considers how best to invest in people and places, Congress should seize this opportunity to make a generational investment in communities most in need, with the goal of promoting a faster and better recovery. fair to all Americans.
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