Hey Supposed Economic Recovery, You Missed a Spot

The economic recovery is not reaching all people in all places. I suppose this should be obvious. But as a resident of the mostly affluent Silicon Valley, I found the […]

The economic recovery is not reaching all people in all places.

I suppose this should be obvious. But as a resident of the mostly affluent Silicon Valley, I found the hype of the recovery had seeped into my subconscious.

So, while on a recent four-day weekend trip up the coast, I was surprised to be viscerally reminded of how uneven and incomplete the recovery has been, even in my home state of California.

We piled the family into the minivan and drove up to see redwoods, tide pools, sand dunes, and beaches. We stayed two nights at a motel in Eureka and used it as our base station for day trips of hiking and exploring.

A great and refreshing trip despite some of the observations that follow.
My wife (then girlfriend) and I had been through Eureka on a road trip almost 20 years ago. This was far before kids and much of the responsibilities we have in our current jobs and lives took over.

The downtown area at the time had the feel of these main street redevelopment efforts that were popular in California in the 1990s. The streets were full of pedestrians. Maybe it was misplaced optimism, but it looked like Eureka was going to make it.

Now, Eureka’s main drag is a shadow of what it had been. We were there on a Friday at dinner time and the streets were practically empty. There were vacant storefronts. There seemed to be more homeless people (though this may be a trick of perception—maybe the homeless people were there all along, they just became more evident through the absence of other people). While the vestiges of past/current revitalization efforts were still evident, it seemed like they were barely hanging on.

Just Capitalism?

In the late 1800s and into the 1900s, Eureka was a boomtown, an export-oriented port city, the hub of a rich and growing regional economy, known for its wealth and architecture. Things changed for Eureka and it was on the outs long before its mini-renaissance in the 1990s.

In hindsight, you could say that boomtown Eureka was too dependent upon a single, unsustainable, extractive set of industries (logging, lumber, wood and paper products and also gold and fishing). You could say that this is just capitalism. The rise and fall and rise and fall of places, of industries, of economies is just part of the churn—the creative destruction—that moves us forward.

Economic development is necessarily uneven. We live in a system that creates winners and losers. The path forward for Eureka might be ecotourism, oyster farming, medicinal marijuana, some combination of industries, or some new technology/industry that hasn’t been conceived yet. This is just the system working the way it is supposed to.

We live in a system that creates winners and losers. We know this from the outset. This means that we have a moral responsibility to make sure that life doesn’t suck for those who happen to be the losers and that opportunities to succeed are open to everyone.

We are coming up short on both of these counts.

The nation’s current economic recovery (such that it is) is being driven by a relatively small number of more successful metro regions. And even within successful regions, the bounty of the recovery is not trickling down everywhere, to everyone. In my home region of Silicon Valley and in the greater Bay Area, a place that is one of the leaders for the recovery in California, low-income folks feel like the rising economic tide is pushing them out, not lifting them up.

The current poster child for economic decline and municipal failure, Detroit, was once the hub of a booming industry like Eureka was and like Silicon Valley is now. Your time on the top is finite. And this has implications for the future economic destiny of children growing up in these areas.

A recent study reported in the New York Times says that low-income children who grew up in Silicon Valley in the 1980s had a relatively good degree of economic mobility compared to the rest of the country. Eureka was one of the few regions in California where economic mobility for kids from low-income families was less than the national average. Detroit had one of the worst economic mobility scores in the country for an urban region outside of the South. But who knows how much longer Silicon Valley will be on top? Who knows the degrees of mobility that low-income kids growing up in Silicon Valley will have in the future?

Success Is Impermanent

There is a pivot happening in philanthropy right now. Some people advocate that investment in job growth, economic development, and infrastructure are the key strategies to creating sustainable improvements in economic outcomes in low-income people’s lives. These folks are generally in the same milieu as those who tout regional economies as the geographic level at which growth and innovation happen, who see economic problems as having regional solutions.

Now, I am all for regional economic growth. And I can agree with most higher-level arguments about how regional economies function and that there needs to be more regional coordination and more investment in region-wide systems and infrastructure. But none of this can take the place of programs and activities that directly target poor people in the places where they live.

Eureka says that economic development will always have incomplete coverage and unintended consequences, success will always be uneven and impermanent. I’ve talked in other blog posts about how a growing economy is insufficient, in and of itself, to address poverty.

If we really want to help people, we have to help them directly. We have to meet them where they are.

(Photo by Chuck Coker CC BY-ND)

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