Why income inequality is the wrong issue

BY MIKE GREEN | OB BLOGGER

The problem with the issue of income inequality is that it’s typically an afterthought to a region’s economic planning, and not a core priority around which primary economic strategies revolve.

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BY MIKE GREEN | OB BLOGGER

Four major developments will unfold across cities and metropolitan regions this year, according to a new report by the Brookings Institute titled, “Lessons from the Road: The Metropolitan Revolution 2014.” Co-authors Bruce Katz and Jennifer Bradley traveled to dozens of metro regions listening to leaders and reported on the trends for regional economic development. They can be summed up as:

1. Collaboration. The financial health of regions will depend upon collaborative financial commitments and proactive involvement of private, nonprofit and civic organizations, along with government institutions.

2. New models. New and old will work together with a common vision and shared strategy directing the paths of metros within established networks. (Greater Portland Inc. and Portland Development Commission were highlighted as prime examples of new regional economic development strategies that represent trends nationwide.)

3. Address Income Inequality. Cities and metros are on the front lines of income inequality and using new tools to tackle it.

4. Copy and/or customize. Cities are looking at one another and copying what works and customizing good ideas to fit their region’s needs.

The trends all sound reasonable. But, if this report is an accurate reflection of the intentions of policymakers in cities and metro regions across the nation to bolster economic competitiveness regionally and globally, then we may need a coroner to stamp the date and time of the death of the issue of income inequality. But, that’s not necessarily a bad thing.

The problem with the issue of income inequality is that it’s typically an after-thought to a region’s economic planning, and not a core priority around which primary economic strategies revolve. Or it is set aside as a separate issue unequal to the strategies devised for economic competitiveness. In either case, it is dead on arrival in any discussion of the innovation economy.

Let’s face reality. The issue of income inequality isn’t taken very seriously by cities. And it isn’t regarded as comparable to the issue of regional competitiveness. It doesn’t belong in the same conversation.

Twenty-first century cities are concerned about the economic competitiveness of their urban centers and metropolitan regions. Their primary issues are job growth and wealth creation. Minority communities have remained largely disconnected for decades from the tech-based innovation activity and wealth-building mechanisms in urban regions that exist all around them. These communities are also worthy of investment and infrastructure with a focus on producing jobs and wealth. But income inequality conversations don’t begin to discuss those strategies.

Ironically, the elevation of income inequality as a separate priority among 21st century economic strategies reveals it as window dressing distinct from the core foundation upon which the mainframe of the innovation economy house is built.

Just as 20th century economic constructs wherein policies targeting low-income communities were relegated to charities and public welfare programs — versus public-private partnerships and equity investments with measurable returns – Brookings describes the approaches of today’s leaders to the problem of income inequality as:

• closing education achievement gaps with pre-kindergarten programs,
• closing wage gaps by raising the minimum wage and
• helping millions of high school students prepare to go directly into the workforce.

These are all good efforts and laudable within context. But they do not represent the best thinking and leadership of a nation concerned with upward mobility, fostering an inclusive competitiveness landscape and cultivating all of its homegrown talent in every region to contribute meaningfully to the tech-based high-wage workforce and the tech-driven high-growth entrepreneurial landscape that buttress the overall economic competitiveness of America.

Twenty-first century cities and metros are investing heavily in startup communities and Innovation Districts. These centers of innovation are often located nearby or directly adjacent to impoverished and disconnected communities. Incorporating the inherent talent within those communities doesn’t require a separate but unequal approach. Inclusion is the solution to the income inequality equation.

When leaders see their entire regions through the lens of inclusion, they won’t be satisfied with zip codes that aren’t competing in the innovation economy. They will build into their plans the means and resources by which all children and adults across the socioeconomic spectrum can not only find a bridge to participate but be fully prepared and equipped to compete to the best of their abilities in the regional innovation economy.

If the 2014 metro revolution ushers in an era of inclusive competitiveness it will empower all populations to meaningfully engage and compete in a capitalist landscape. That may potentially kill the conversation on income inequality as a 21st century economic strategy. And perhaps that’s what’s needed to focus on inclusive competitiveness.   

Mike Green blogs on technology and equity issues for Oregon Business.