One Economic Question That Could Decide the Next President
Newsflash: National Polls leave little doubt the economy is the most worrisome issue for the electorate in this presidential election, followed closely by jobs/unemployment. But perhaps the presidential candidates’ response to one very specific economic question may be the determining factor in who moves into the Oval Office next January.
Who will create America’s future jobs?
It’s a deceptively simple inquiry, yet vital for the framing of myriad questions to follow. Unfortunately, fear of dredging up presumed past racial problems seems to prevent deep public discourse and analysis on why nearly all jobs in America are still being produced by just one racial demographic group. If the public is to learn “how” to create more jobs in a society that is becoming more multicultural with each decade, journalists and policymakers must ask: Who is creating jobs in the U.S.?
When journalists, pundits and pollsters want to better understand voter support for any candidate, they factor in descriptions of who the supporters are because they know the electorate is divided among a number of categorical demographic fault lines.
Today, it is essential that the American public fully understand who creates jobs in the U.S. because such awareness helps focus the nation’s attention toward expanding opportunity for others to also engage in the process of growing business productivity and job-creation.
Perhaps candidates running for office across the country and journalists already know the answer to the question of who is creating the vast majority of U.S. jobs, but no one talks about it. I wonder if they avoid addressing the issue for fear of acknowledging the fact that America’s economy, much like the criticism that the election process is “rigged,” is based upon an obsolete 20th century infrastructure designed to privilege some and assert artificial barriers for others. I can understand why this would be an issue a candidate would like to avoid. But why would media?
RACE & ECONOMICS
An apparent national aversion to engaging the racist-laced elephant in the room actually inhibits our capacity to deal effectively with economic problems that manifest in virtually every aspect of American society, typically along racial dividing lines. Journalists and policymakers tend to pretend that race plays a marginal role in American society when, in fact, it is deeply embedded in the bedrock of our nation’s strategic economic planning process. And race is unavoidable as a major issue in the presidential election on both sides of the aisle, although media have sought to avoid it as much as possible. What would happen if we stopped our willful ignorance and removed the blinders that prevent us from seeing the truth offered by empirical economic data and common sense observations? Could we accelerate progress toward implementing solutions?
Regardless of our individual predilections toward belief in a “post-racial” society, there’s no denying the fact that the Supreme Court in 1883 officially carved the nation into two separate distinct and unequal landscapes: one white and economically privileged, the other black and economically distressed. The struggle to overcome that destructive decision continues today, 133 years later, with no resolution in sight. And throughout that time, the nation has continued to operate under the presumption that job-creation — which is a result of investments and growth of successful businesses — is largely a reserved bastion for white males. But that default thinking isn’t necessarily realized until we listen carefully with an informed ear to our business and elected leaders talk about the economy and employment.
The challenge for media is to tell a comprehensive economic story that the public can fully understand, and then give that story massive legs to ensure it penetrates the noise that accompanies presidential elections. When it comes to job-creation, the presidential candidates all have policies on how to create jobs. Surprisingly, the most important question of who will create jobs under the next presidential administration was not asked of any of the many candidates during any of the 21 debates and several town halls in which more than 250 million viewers tuned in.
It turns out that this question isn’t as easy to answer as it seems. Bringing jobs back from overseas doesn’t change who is producing those jobs. Manipulating the tax code doesn’t magically produce an increased flow of scalable startups by an expanded diverse landscape of new entrepreneurs nor scale existing businesses that have diverse owners.
ECONOMIC INCLUSION & COMPETITIVENESS
The question of who will create the jobs of tomorrow is actually hard to answer. But it was the focus of the nation’s first Economic Inclusion & Competitiveness Summit hosted by Clark Atlanta University on April 22–23. Summit participants included a broad spectrum of leaders and stakeholders across America’s innovation economy. Asst. Secretary of Commerce for Economic Development, Jay Williams, gave the keynote address following the opening presentation by Johnathan Holifield, the author of “The Future Economy and Inclusive Competitiveness.”
“Discussions of economic inclusion and empowering underrepresented populations in today’s economy have traditionally centered upon workforce development while overlooking the extraordinary inherent value, unparalleled momentum and segmented growth of entrepreneurship among African-Americans and other peoples of color,” Clark Atlanta University President Ronald A. Johnson said.
Johnson hit the nail on the head. Across America, minority groups have traditionally been viewed as participating in the economy purely as a workforce. The nation is slowly and incrementally evolving in its recognition of myriad contributions made to society by extraordinarily talented and creative inventors, innovators and entrepreneurs who are women and people of color. But there still remains a persistence of generational policies and perspectives reflecting an era when minority business owners and women weren’t perceived as “job creators.”
NEED FOR NEW ENTREPRENEURIAL INFRASTRUCTURE
Yet, the fastest rate of entrepreneurial growth today, in a nation desperate for new business startups, is among Hispanic (46.3%) and Black (34.5%) entrepreneurs respectively. Additionally, black women-owned businesses have grown at an astounding rate of 322% since 1997.
The Kauffman Foundation finds that while mature small businesses and corporations hire the lion’s share of workers, they also fire the lion’s share, thus canceling out their net job growth. Startups, young businesses five years old or less, account for 20% of gross job creation and nearly all net new job creation in America. Nevertheless, record high rates of business starts among Hispanic and Black populations have not translated into new job creation.
For example, out of the 2.6 million black-owned businesses (up from 1.9 million in 2007), 2.5 million are sole proprietors with no employees (in 2007, it was 1.8 million businesses without employees).
Unfortunately, outside of the leadership of Clark Atlanta University and the efforts of Dr. Robert Blaine at Jackson State University, there’s very little discourse about strategic solutions to overcoming systemic barriers to entry for minority entrepreneurs seeking to start and grow new businesses in today’s tech-based innovation economy. These barriers include generational poverty, low quality public schools serving high-poverty communities, lack of exposure to STEAM education (science, technology, engineering, arts and math) and entrepreneurial training, and lack of access to experienced mentors, networks and capital resources required to start and grow successful businesses. This lack of basic infrastructure for America’s fastest-growing entrepreneurial landscape is a uniform neglect nationwide.
Amazingly, there isn’t a single economic development strategies plan that I can find focused on communities of color anywhere in America. Of course, there are pockets of nascent efforts that offer hope, like in Portland, OR and Atlanta, GA. But then there are many more places like Baltimore, MD.
Baltimore is a minority-majority city comprised of 63% black and 30% white populations. It is ranked No. 7 in regional competitiveness nationwide and No. 17 in global competitiveness. It has a Maryland Competitiveness Coalition and a Department of Economic Competitiveness and Commerce. Yet, the term “economic competitiveness” isn’t part of the community lexicon for Baltimore’s black residents. Economic competitiveness highlights business productivity, job growth, wealth creation and improved quality of life in a region. Yet, the economic competitiveness scene in Baltimore is a tale of two disconnected cities: one economically privileged and powerful, the other economically distressed and weak.
Inclusive Competitiveness would be a worthy priority for consideration at Morgan State University in Baltimore, one of 105 Historically Black Colleges and Universities (HBCU) in the nation. Such a focus would establish a competitive advantage for MSU and develop the school into a campus culture of entrepreneurial competitiveness. Today, most of Baltimore’s black residents, some of who participated in a major uprising last year following the police killing of Freddie Gray, remain disconnected from the benefits of regional competitiveness strategies, plans and outcomes in Baltimore and across the state. Their future depends upon raising awareness, educating the public and investing in much-needed entrepreneurial infrastructure through the current strategic planning process that has made Baltimore one of the most competitive regions in the nation, just one step behind San Francisco in the rankings.
Baltimore, D.C., Detroit, Jackson, MS and other minority-majority cities suffering from economic apartheid-like systemic conditions, would benefit greatly by establishing Inclusive Competitiveness strategies that connect to the current regional competitiveness strategies and plans in which large swaths of the population are missing. Unfortunately, out of more than 500 regional development organizations receiving funding from the Economic Development Administration (EDA) to produce Comprehensive Economic Development Strategies (CEDS) plans for every metro region in America, not one contains a codified strategic approach to investing in scaling up existing entrepreneurial activity among Hispanic and Black populations with measurable results. Ironically, the EDA lists a focus on underserved communities as one of its six investment priorities. The systemic neglect in each region creates long-term degenerative economic conditions for residents of communities of color. The generational outcomes are predictable.
HIGH GROWTH — LOW PRODUCTIVITY
But despite the lack of inclusion in economic competitiveness strategies and plans, minority communities continue to produce investment-worthy entrepreneurial talent at an unparalleled rate. In 2007, Black and Hispanic populations produced a combined total of 4.2 million businesses with a productivity output amounting to less than 3% of GDP and virtually no job growth. By 2012, the number of Hispanic and black-owned businesses ballooned to nearly six million with a revenue output of less than 4% of GDP and roughly 1% job growth.
Demographic shifts occurring across America project that by mid-century the U.S. will be a minority-majority nation. Black and Hispanic populations alone will comprise at least 42% of the nation’s total. And with so much entrepreneurial effort occurring among these two demographic groups, it seems like a no-brainer for business and economic development leaders, impact investors, educators and policymakers to prioritize finding ways to strategically invest in scaling up economic productivity among these populations for the benefit of a nation suffering from a crisis in entrepreneurship.
AMERICA’S ECONOMIC FUTURE
President Obama has targeted investing in rebuilding America’s entrepreneurial landscape as a priority. From promoting entrepreneurship through Startup America to passage of the JOBS Act, which ushered in a new era of crowdfunding resources, the Obama administration has taken a number of initial steps toward overcoming generations of systemic institutional biases ingrained in the private sector’s centuries-long practices of prejudice against business competition from nonwhites. The next president must follow the path that’s been laid and expand on it.
It would be unconscionable for the next presidential administration to allow the global competitiveness of the U.S. to plummet over the next several years or decades due to 20th century economic neglect that continues to plague the nation well into the 21st century. If we never ask the important question of “who” will create America’s future jobs, we will continue to think and speak of job-creation as the default domain reserved for privileged white males. This election is a national referendum on the future economic competitiveness of the nation, and whether all citizens will be afforded access to resources needed to reach their highest potential to pursue the American Dream.
OHIO: BIRTHPLACE OF INCLUSIVE COMPETITIVENESS
I predicted last August that Ohio Governor John Kasich was the one candidate to watch in a field of 17. And it was deeply disappointing to see Kasich compete to be one of the last two Republicans left standing in the primary election before bowing out on May 4 to leave Donald Trump as the presumptive GOP nominee, without ever mentioning Inclusive Competitiveness, a demographically driven policy that’s likely to become a national economic imperative. Kasich failed to let the nation know that the Ohio Board of Regents, led by Chancellor John Carey who he appointed from the business sector, unanimously adopted a policy report of Inclusive Competitiveness in the fall of 2014.
When it comes to preparing and equipping the nation’s underrepresented populations to improve their performance as both employees and employers, the landscape of higher education plays an essential role. And Ohio has a leading strategy of Inclusive Competitiveness that its own governor failed to speak of even when faced with Trump’s extraordinary divisive rhetoric.
“America cannot, indeed will not, reach her highest economic competitiveness goals with so much of her population producing so little,” said Johnathan Holifield, architect of Inclusive Competitiveness, a strategic framework for developing community systems that empower underrepresented populations to compete in the innovation economy. Holifield lives in Cleveland, a minority-majority city that will host the RNC convention in July.
Given America’s rapid-paced trajectory toward acknowledging and embracing its destiny as a multicultural melting pot, it seems in the best economic interest of us all to empower underrepresented populations (minorities, women and rural residents) to improve their productivity and become more competitive in America’s knowledge-based, tech-driven, globally competitive innovation economy.
ASK THE QUESTION
Now is the best opportunity we have to transition the nation away from past policies of economic exclusion and progress toward a future frontier of Inclusive Competitiveness. Trump’s business background and the presumption that the GOP is the party with a focus on economic issues, coupled with Sen. Bernie Sanders’ campaign against the hoarding of America’s wealth within the top 1% and Secretary Hillary Clinton’s huge support among Black and Hispanic voters, suggests we have three leading candidates who can champion the cause of Inclusive Competitiveness. Media can jump-start the process of economic empowerment of all Americans by consistently asking and addressing the question: WHO will create America’s future jobs?
I hope the national response is all of us. Let’s respond this November at the ballot box.