Economic developers can increase economic opportunity and mobility for Black and Hispanic workers

By Lauren Duke, IEDC fellow

In a webinar hosted by the Urban Institute’s WorkRise network titled How Economic Forces and Racial Inequity Shape Opportunity and Mobility, professionals from around the country engaged in a discussion to address economic mobility and transforming a low-wage economy.

The Black unemployment rate has been nearly double the white unemployment rate since the early 1970s. In 1979 the wage gaps between white workers and Black and Hispanic workers were 17.3 and 18.8 percent, respectively. In 2019 the gaps rose to 26.6 and 28.4 percent. Lower rates of wealth and homeownership have also impeded economic mobility in Black and Hispanic populations. 

Economic developers can address barriers to economic mobility in Black and Hispanic communities by focusing on providing equitable workforce development opportunities, ensuring fair labor standards, and recognizing implicit bias.

Equitable workforce development opportunities are the foundation of increasing economic mobility among low-wage workers. Companies are beginning to shift training practices by providing longer term skills-based training for employees. While this was initially deemed too expensive, companies are seeing increased retention and higher profits when providing more training and higher pay for their employees. Economic developers can also push companies to offer equitable workforce development opportunities in their communities.

Fair labor standards and practices are imperative for increasing economic opportunity among minority communities. This may include pushing policymakers to ensure a fair minimum wage and standards for low-wage workers in times of crises.

Economic developers can further combat stagnant economic mobility by identifying examples of bias in their organization’s culture and adjusting their strategies. While the solution to many issues facing communities may be found at the policy level, economic developers should work to eliminate traditional practices that leave marginalized communities behind. For example, economic developers should be cautious when bringing new projects into a community and ensure that they plan to create an equitable space that allows for economic growth for all.

While barriers to economic mobility cannot be solved by economic developers alone, it is important to recognize them and advocate for change at the community level. There are many systemic issues in traditional economic development, and addressing them is a first step toward building a more equitable future where all workers have higher earning potential.