Commentary: We Need Economic Development While Addressing Income Inequality Regionally

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When I first started looking into the prospects for economic development, there were several key factors that attracted me to it as a way to address the city’s revenue generation problems.  As a university host community, it tied in perfectly with our culture – tying economic growth not to peripheral strip malls, but rather to our connection to the university.

But it is more than just a way for the city to generate tax revenue, it is also a way for the university to take the research it is producing and help develop high tech solutions to issues like food supply and climate change.

Finally, it is a way to provide jobs to recent graduates of UC Davis.  One of the biggest shortcomings of UC Davis, which has hurt it in rankings, is that students who graduate from UC Davis utilize our community for resources, utilize our state for resources, and then have to leave – taking our investments in their future with them.  By developing local jobs, we can better keep some of our investment at home.

Traditionally, UC Davis has underperformed in tech transfer – not taking advantage of its gigantic economic potential regionally, and as a result not only has UC Davis lagged, but so has Davis and the entire region.

That is now changing, but those changes come at a cost unless we also concurrently address the issues of income and economic inequality.

Michael Bisch’s piece this week deserves a lot more attention on that front.

Mr. Bisch, now the Executive Director of Yolo Food Bank, draws our attention to and highlights a study by the Brookings Institute commissioned by SACOG (Sacramento Area Council of Governments) which found that “the six-county Sacramento region also lays claim to the dubious honor of being ranked 16th out of the 100 largest metro areas nationally in fostering poverty and economic disparities.  Brookings researchers have revealed that an astonishing 34% of the region’s families ‘do not earn enough to cover their basic household expenses.’”

How is it possible that a SACOG-commissioned study by Brookings with a key finding that is alarming was barely covered?  That would seem to be a crucial question.

The only media reference I found was earlier this year in an op-ed in the Sacramento Bee by Darrell Steinberg: “Sacramento is soaring on so many fronts, yet persistent economic inequality weighs us down. The Brookings Institution reports that the wage gap between white residents and people of color in our region grew by $3,171 between 2007 and 2017 – putting us in the bottom 15 of the most populous 100 metro areas in the country for economic inclusion.”

The report starts with the Greater Sacramento Partnership and economic development vision.  The report then benchmarks “the region against 15 peer regions based on economic size, wealth, productivity, industrial structure, and competitiveness factors.”

The key finding of course is: “The Sacramento region is relatively prosperous compared to other large metro areas, but the region has been on a troubling economic trajectory since 2006.”

The good: “Compared to the rest of the nation, the Sacramento region is relatively productive and prosperous; middle class earnings are higher in the region as is worker productivity.”

But here’s the bad: “This progress notwithstanding, 34 percent of the Sacramento region’s residents live in struggling families, defined as residents in households that do not earn enough to cover their basic household expenses. Nearly two-thirds of the region’s residents without a high school degree are in struggling families, as are 47 percent and 42 percent of black and Hispanic residents, respectively.”

It also concludes: “The Sacramento region can take advantage of changing market, technology, and demographic trends, but it must focus on the core drivers and enablers of regional competitiveness and prosperity.”

There is clear strength in innovation: “The Sacramento region has clear strengths within the early stages of the innovation pipeline. UC Davis stands out as a globally relevant innovation asset, due to its contribution to research and development, patents, and licenses, especially in the fields of agricultural and biological sciences. Innovation is occurring in other sectors and companies but, relative to other regions, these are the clearest advantages. The challenge for the Sacramento region remains translating research and development and patenting into new firms and, eventually, good job growth. The region trails its peers on measures of business dynamism, venture capital investment, and advanced industries growth, suggesting the need for further actions to support key advanced industry clusters and help young innovative firms start and scale.”

The economic inequality piece is critical – it is critical to the future of the region’s economic development.

This is all the more important because the region’s workforce supply is “becoming much more racially diverse.”

As they point out, “(that) makes closing educational and employment disparities by race extremely urgent.”

They add: “Notwithstanding the region’s ability to attract well-educated workers from outside California to fill workforce gaps, it must educate and train a broader, more diverse set of its homegrown population for in-demand jobs.”

In short, part of the story that we have told is correct – the Sacramento region is well-positioned to take advantage of the new wave of innovation and economic development.  The region, led by UC Davis, is poised to become a major player in the emerging high tech fields.

Tech transfer from the university is an engine of economic growth and we can align that vision with Davis’ unique social perspective – pushing for green technology to help address food shortages and climate change.

However, this report is an important reminder that, while we are looking to help address hunger and food security issues globally, we cannot lose site of the local impact and make sure that these changes help not only the haves in this region, but also the have-nots.

This report is a good reminder that, while we should be focusing on developing economically to better position a “very productive workforce” and “world-class assets” to generate “distinctive innovations for a global market,” we also need a reminder to address the burning social issues of our society and ensure that these changes benefit those at the bottom of the rung, not just those at the top.

—David M. Greenwald reporting


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About The Author

David Greenwald is the founder, editor, and executive director of the Davis Vanguard. He founded the Vanguard in 2006. David Greenwald moved to Davis in 1996 to attend Graduate School at UC Davis in Political Science. He lives in South Davis with his wife Cecilia Escamilla Greenwald and three children.

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7 thoughts on “Commentary: We Need Economic Development While Addressing Income Inequality Regionally”

  1. Alan Miller

    The economic inequality piece is critical – it is critical to the future of the region’s economic development.

     

    we cannot lose site of the local impact and make sure that these changes help not only the haves in this region, but also the have-nots.

     

    we also need a reminder to address the burning social issues of our society and ensure that these changes benefit those at the bottom of the rung, not just those at the top.

    Let’s try COMMUNISM!         )-:  /-;  +>\

     

    1. Mark West

      “Let’s try COMMUNISM!”

      I know that Alan M. likes to joke, but I don’t see this one as being particularly funny in a climate where any sort of suggested societal change is attacked with false claims of socialism, communism, and the like. All that is required here is a little empathy.

      The goal of economic development is not the guarantee of a job, house, or hand-out, it is an effort to provide opportunity for people to find those things for themselves while at the same time providing new revenues for the local government to help pay for the services that our community demands.

      1. Tia Will

        Alan and Mark

        This is one of those rare opportunities when I get to call both of you out at one time.

        First Mark,

        All that is required here is a little empathy.” Mark, I am quite sure you are aware that more than “a little empathy” is needed. A world view that not everyone benefits equally and that all should have the opportunity to benefit from economic development would come closer to closing the benefit gap than would just “a little empathy”.

        Now for Alan.

        You may have just intended a little humor with your “communism” comment. But you frequently hide behind your libertarian persona. So here is what I think of that. I know, for a fact, from personal interactions on multiple occasions which I will not divulge, that you show more than a little empathy for those in need.

        1. Mark West

          You are calling me out for understating the obvious?

          Frankly, considering the extent of opposition to change that exists in this town, I think a little empathy for those who do not have a good job or an appropriate place to live might go a long way.

           

  2. Bill Marshall

    Tying (as in mandating, rather than possibly ‘logical consequences’) economic development to regional income equality, is likely “mission creep”, and likely a fool’s errand… if any economic development proposal is saddled with an additional litmus test of proving it will serve towards reducing economic/income inequality… well, we won’t need measure J/R… it just won’t happen… within current City limits, or outside… so much for the rumors of DV ‘promoting development’…

    It is true that economic development may help with IE, yet, there are indications that the piece equates income inequality with ‘race’, and,

    Finally, it is a way to provide jobs to recent graduates of UC Davis.  One of the biggest shortcomings of UC Davis, which has hurt it in rankings, is that students who graduate from UC Davis utilize our community for resources, utilize our state for resources, and then have to leave

    How ‘diverse’ are the recent graduates, and how does income inequality for college grads deal with income inequality for the population at large, as many of the ‘less equal’ do not have a college degree?

    Economic development good… reducing income inequality likely good… tying one to the other is questionable… except as a “trickle-down” effect…

  3. Bill Marshall

    BTW… “income inequality”… how many folk “of color” (or, even if not “of color”) in professional sports, many of whom either never went to college, or ‘squeaked thru’, are making less than someone who is a professional, with a BS and/or MS degree?

    Compare a rookie baseball player’s salary to that of a 20 year teacher … ’nuff said…

  4. Tia Will

    Mark

    Precisely. Which is why I have no idea why you felt the need to reiterate what I just said, that you initially understated. However, since you chose to do so, one further point. Any given change may be for good, or it may be for ill. A given individual saying “we must change” says nothing about the likely outcome of the specific change that individual is proposing.

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