Achieving Shared Prosperity in the Bull City
[Note: This is the first of four position papers that outline Carl’s policy platform for change in Durham. Other papers in this series will address environmental/climate justice, community safety, and affordable housing.]
Summary:
Durham has a dynamic economy, but not all residents share in that prosperity. Every adult in Durham should have the opportunity to thrive as a worker or entrepreneur, and in making this happen, our economy will be stronger. To achieve more widely-shared prosperity in Durham, we should:
- Connect more young people, especially those from disinvested communities, to jobs in the dynamic growth sectors in the local economy, such as life sciences
- Promote and incentivize living wage jobs
- Support more residents to succeed as entrepreneurs
- Help erase medical debt for local residents
- Expand downpayment assistance for first-time, low-income homeowners
- Endow nest-egg savings accounts for DPS students starting in kindergarten
What is shared economic prosperity?
Shared economic prosperity means that everyone in Durham has the opportunity to thrive as a worker or entrepreneur and benefit from our dynamic, growing economy. This includes the notion the no one who works should be poor, that all jobs should provide at least a living wage with benefits, and that all households should have the opportunity to build real wealth — whether in the form of home ownership, small business equity, or human capital.
Why is shared economic prosperity important for Durham?
Durham’s economy continues to expand, with rapid job growth, low unemployment, and the highest average weekly wage of any county in North Carolina. According the U.S. News and World Report*, Raleigh/Durham is the 6th best place to live in the U.S. In a post-Covid era in which more workers are working remotely and also more likely to move, Durham is one of the small metro areas that is on the receiving end of these trends. Since 2020, Durham has grown at a rate of 2.4% per year (or almost 300 net new residents a month).** And as reported in the NY Times, college-educated workers are particularly likely to migrate from major metropolitan areas toward smaller metros like Durham.***
Yet, in a region that is thriving economically, not all residents in the City of Durham share in this prosperity. With respect to income (the flow of money that households receive monthly):
- 1 in 7 residents in Durham are poor,****
- 40% of residents live below 200% of poverty (ranking Durham among the bottom 30 counties in North Carolina),*****
- 1 in 7 residents in Durham are food insecure, including 1 in 5 children,****** and
- The average income of the richest 5% of households is 24 times greater than the income of the poorest 20% of households (ranking Durham among the bottom half of counties in North Carolina).*******
And with respect to wealth (the stock of accumulated financial resources the households own, including stocks and bonds, home equity, retirement savings, equity in a small business):
- 1 in 6 households in the City of Durham have ZERO net worth,********
- 1 in 4 households in the City of Durham are “asset poor” (meaning they lack the net worth needed to subsist at the poverty level for three months in the absence of income), and
- 42% of Black households in Durham County (data not available for City of Durham) are asset poor, compared to 16% of white households.
How can Durham achieve more widely-shared prosperity?
Accepting this level of inequality defies basic principles of fairness and opportunity. Plus, our economy is stronger when all have the opportunity to thrive as workers and entrepreneurs. There are a number of strategies that Durham can pursue to achieve more widely-shared economic prosperity:
Combatting income inequality:
- Connect more young people, especially those from disinvested communities, to jobs in the dynamic growth sectors in the local economy. Like many other cities, Durham offers a Youth-Work Program that provides youth ages 14–24 the opportunity to gain work experience and develop skills through paid summer positions. But the program often lacks commitments from local businesses. The City of Durham should invest in scaling up efforts like the B.U.L.L.S. Initiative (the flagship program of Made in Durham) to connect local youth to career pathways in the growing local life sciences sector.
- Promote and incentivize living wage jobs. Durham was the first city in North Carolina to pass a living wage ordinance, which requires all city workers to earn a minimum of $17.60 for FY 2023. The City of Durham could also encourage more private sector business to pay a living wage by actively promoting local living wage certification programs, like the Durham Living Wage Project, and amending the city’s incentive policy to provide an extra bonus for all incentivized jobs to be living wage jobs (currently the city’s policy only mandates that incentives be granted under the condition that the average wage for new full-time jobs must equal the average wage in each category of employee hire).
- Support more residents to succeed as entrepreneurs. According to the Small Business Equity Toolkit*********, Black entrepreneurs in Durham are more than seven times less likely to start businesses than white entrepreneurs (and Latinos are more than five times less likely). To accelerate entrepreneurial starts and small business growth, especially among people of color and non-traditional entrepreneurs, Durham should follow the model of innovative cities, such as Baltimore, Kansas City, and Long Beach, that have built out robust entrepreneurial “ecosystems” to support entrepreneurs and build a stronger local economy. Durham already has an existing network of public-sector and nonprofit entrepreneurial support organizations. What’s needed is greater investment in access to capital and in a high-capacity “backbone” organization to coordinate efforts and work with partners to set outcome metrics and report on progress.
Combatting wealth inequality
- Help erase medical debt for local residents. One important strategy for building wealth is to reduce the amount of debt that burdens families, particularly Black and brown families. Several leading cities, such as Chicago, St. Paul and New York City, have already adopted this approach to reduce medical debt. In Chicago, the city is working with RIP Medical Debt, a nonprofit that buys medical debt from the debt-buying industry in bundles of millions of dollars at a time and at a fraction of the original cost. Using this strategy, donations can relieve 100x their value in medical debt. Local civic organizations in Durham, including churches, are already supporting this strategy. Additional support from the City of Durham (in the form of matches or other incentives) could leverage additional community investment and retire medical debt for even more families in Durham.
- Expand downpayment assistance for first-time, low-income homeowners. Home equity is the single largest source of wealth for most Americans. Moreover, owning a home with a predictable mortgage is also a way to control housing costs in rapidly gentrifying neighborhoods. The City of Durham just relaunched its Downpayment Assistance Program with $5.7 million funded by Forever Home, Durham, the city’s $160 million, multi-year investment in housing. The program provides downpayment assistance in the form of a forgivable loan up to $80,000 with a 0% interest rate and a 15-year term. The generous loan cap likely means that the program will reach far fewer than the 400 low-income homebuyers originally envisioned by Forever Home. In order to enable more low-income residents to build as homeowners, the City should increase its investment in downpayment assistance.
- Endow nest-egg savings accounts for DPS students starting in kindergarten. Innovative cities across the country, including Atlanta, St. Louis, St. Paul and Los Angeles, open savings accounts for young people at birth or in kindergarten that are dedicated to building savings for post-secondary education. Research shows that students with as little as $500 in college savings are three times more likely to attend college and four times more likely to graduate than students with no college savings. Local nonprofits, such as Book Harvest and Student U, already provide such college savings accounts for their participants. The City of Durham should work with DPS to scale this type of asset-building strategy to more kids in Durham.
* Bureau of Labor Statistics, County Employment and Wages in North Carolina — Fourth Quarter 2022, https://www.bls.gov/regions/southeast/news-release/countyemploymentandwages_northcarolina.htm#:~:text=Weekly%20wages%20in%20the%203,the%20top%20one%2Dfourth%20nationwide.
** U.S. Census Bureau, Quick Facts: Durham County, NC, https://www.census.gov/quickfacts/fact/table/durhamcountynorthcarolina/PST045222
*** Emily Badger, Robert Gebeloff and Josh Katz, “The Places Most Affected by Remote Workers’ Moves Around the Country,” New York Times, June 17, 2023.
**** U.S. Census Bureau, Quick Facts: Durham County, NC
***** Data provided by NC Budget and Tax Center
****** “2020–2021 Durham County Profile,” Food Bank of Central and Eastern NC, http://foodbankcenc.org.
******* Data provided by NC Budget and Tax Center
******** Prosperity Now Scorecard, Prosperity Now, Washington, DC, https://scorecard.prosperitynow.org/
