Conclusions and Key Recommendations

 

The report has presented a broad range of lessons that can be learned from Baltimore’s ongoing economic inclusion efforts. These lessons, derived from the actual experiences of Baltimore businesses and anchor institutions engaged in the economic inclusion work, can be useful in guiding future efforts. Other reports on economic inclusion activities from around the country have come to similar conclusions or made similar recommendations.

One key insight from Baltimore’s experience is that training to overcome implicit bias and structural racism enable institutions, businesses, and their employees to better understand and modify policies, practices, and behaviors to address historical dynamics and the racialized context of economic inclusion strategies.

A second key insight is that any Baltimore-area business or anchor institution, regardless of its size or the resources available to it, can make contributions to economic inclusion. The specific nature of the economic inclusion activities being pursued will of course be shaped by the type of business or anchor entity involved, and by the opportunities available at the time. Nonetheless, the many examples provided in this report demonstrate that, if a business or anchor institution is fully committed to the economic inclusion activities, positive outcomes can be achieved.

Full Report and Appendices

Why Increased Business Engagement and Expanded Economic Inclusion Efforts Are So Necessary

After reviewing the various examples, however, a businessperson might ask: “With all the economic inclusion efforts that are already underway in the city and region, why is the involvement of additional businesses and anchor institutions in similar efforts necessary?” The truth of the matter is that, despite all efforts that have occurred to date and the progress that has been made, there are continuing disparities in education, employment, economic opportunity, and income between the Baltimore area’s persons of color and the region’s white populations. For instance:

Education

While Baltimore City has made commendable progress in recent years in reducing the number of working-age adults who lack a high school diploma or GED (see bar chart on next page), the percentage of the city’s low-income African-American residents over 25 years of age for whom a high school diploma or GED represents their highest educational certification remains substantially greater than that for white residents (41.4% versus 27.7%). This is a telling statistic in terms of future employment prospects for those African-American residents.

Employment

Although unemployment rates in Baltimore City have declined dramatically from the highs of the Great Recession, Baltimore’s African Americans continue to experience unemployment rates that are triple those of white residents. While the unemployment rate for Baltimore’s white residents over 16 years of age in 2016 was less than 4%, the unemployment rate for African Americans in the same age range was over 13%.

Using 2012 to 2016 U.S. Census 5-Year ACS data, if Baltimore City African Americans had the same higher labor participation rate as white residents (67.8% vs. 58.3%) as well as the lower white unemployment rate (5.1% vs. 15.9%), it is estimated 47,155 additional African-American residents would be working, if all the factors that lead to employment were equalized.

In addition, according to a February 2018 report released by Associated Black Charities, the region’s African-American workers tend to be concentrated in lower-wage, lower-skill occupations and in industries with more turnover. These patterns help to account for the fact that African-American workers in Baltimore City earned approximately half of what white workers earned. Across the Baltimore metropolitan region, the disparity in earnings is somewhat smaller, but still substantial.

Business Growth and Strength

While there has been considerable growth in recent years in the number of African-American-owned and Hispanic owned businesses in Baltimore, they still represent only a small fraction of total business sales. Between 2002 and 2012, for example, the number of African-American-owned businesses in Baltimore City increased by 61% (from 14,644 to 23,600). However, the cumulative annual gross receipts for the African-American businesses only increased by 10.7% during that period, and the percentage of total citywide sales represented by those businesses barely changed over the decade—from 1.2% to 1.4%. This suggests that the vast majority of the African-American businesses in Baltimore are severely under-resourced and struggling to access markets. In addition, Hispanic-owned businesses saw annual gross receipts decline significantly, despite the growth in the number of firms. (Appendix 2 provides an analysis of Minority- and Black/African-American-owned Businesses in Baltimore by the University of Baltimore Jacob France Institute. It is available at www.baltimorepartnership.org.) These statistics and many others make clear that more needs to be done.

How Can Other Businesses and Anchor Institutions Get Engaged?

Although the economic inclusion activities of a variety of business entities have been profiled in this publication, they represent a small share of the business community. To achieve the scale and level of effort necessary to “move the needle” in reducing disparities and eliminating equity gaps, many more business entities need to be involved. For the good of the city and region, and to foster a thriving economy in which all can benefit, it is incumbent upon every Baltimore-area business and anchor institution to do its part in promoting economic inclusion.

As this report has demonstrated, economic inclusion activities that generate positive results can take a variety of forms. Businesses and anchor institutions can, for example, offer increased employment opportunities to Baltimore’s persons of color and individuals facing challenging employment barriers, or they can work to procure more goods and services through MBEs/WBEs and local firms. Businesses and anchors can also participate in public-private collaborations to advocate for broader improvements to increase economic vitality. Below, we outline key steps that a business or anchor can take to begin economic inclusion efforts.

Suggested Actions for Baltimore-Area Businesses and Anchor Institutions Interested in Economic Inclusion Efforts

The following are recommended steps for a business or anchor institution to take in initiating (or ramping up) its
economic inclusion activities:

  • Make an explicit commitment to diversity as a business or anchor institution and take proactive, intentional steps to help close the equity and opportunity gaps that Baltimore’s African-American workers and minority-owned companies experience. As part of this:
    • Business or anchor leaders should establish clear, quantitative targets relative to providing increased
      employment opportunities for Baltimore-area persons of color and those facing employment barriers, and/or for engaging in increased procurement from MBEs/WBEs and small local firms.

    • The business or anchor should make sure that it has sufficient data infrastructure in place to track progress toward those targets.
    • Leaders of a business or anchor institution should establish a schedule for regular reviews of progress
      and performance. These should ideally occur on at least a quarterly basis, and organizations should share the findings with all relevant parties.
  • Become familiar with the tools and resources available to assist Baltimore businesses and anchor institutions in their economic inclusion activities. Among the tools that are available are:
    • Workforce Resources in Baltimore: An Employer’s Directory to Support Local Hiring and Workforce
      Development (Baltimore Integration Partnership & Central Baltimore Partnership, October 2017): This
      directory provides profiles of 49 nonprofit and public sector organizations offering workforce development
      programs and services in Baltimore City. The directory is available at www.baltimorepartnership.org.

    • Resources and Intermediaries to Help Find Local and Minority Business Enterprises (Baltimore Integration
      Partnership; updated March 2018): This document lists entities and databases that can assist in identifying minority-owned firms and local companies to provide goods and services. The document provides electronic links to each resource. The directory is available at www.baltimorepartnership.org.
  • Explore collaboration with individuals, organizations, and partnerships that can facilitate and further economic inclusion work. These could include:
    • Workforce development service providers and the Baltimore Workforce Development Board;

    • Business assistance programs and organizations;
    • The BLocal initiative (for businesses), and the Baltimore Integration Partnership (for anchor institutions);
    • Chambers of Commerce, the Greater Baltimore Committee, and other business sector associations, particularly those that have a regional perspective;
    • Community-based organizations, faith-based organizations, resident associations, and civic leaders; and
    • Government officials.

All employers embracing economic inclusion should track the diversity of their workforce relative to entry-level,
mid-level, and senior positions, as well as for the turnover in those positions. They should also have the staff responsible for hiring, promotion, and disciplinary decisions undergo training on implicit bias. Following such training, employers should review their hiring and personnel policies to eliminate any policies or practices that, however unintentionally, create unnecessary barriers for persons of color or contribute to implicit bias. Finally, businesses should identify career advancement strategies for their workers, particularly for those employees in entry-level positions.

What Additional Actions Can Baltimore Stakeholders Take to Foster Broader Economic Inclusion Efforts?

Economic inclusion efforts undertaken by businesses, institutions, and state and local governments have been effective in catalyzing and supporting a variety of initiatives. However, there are additional things that public officials and other Baltimore stakeholders could and should be doing to promote greater economic inclusion.

  • Place more emphasis on transportation solutions and develop those and other economic inclusion strategies at a regional level One clear need is a strategy to improve regional public transportation, which is essential to increase Baltimore residents’ ability to reach family-supporting employment opportunities throughout the region, and particularly the growing job centers outside of Baltimore City. It is projected that 83.4% of future jobs will be in the suburbs where 74% of the region’s existing jobs are now located. Consequently, government officials should collaborate with each other and regional stakeholders in taking a much more active leadership role in promoting improvements in regional public transportation.

  • Focus on Economic Development and Small/Minority Business Development:
    • Public officials should continue to take steps to increase government and state higher educational procurement from local and minority-owned firms. Public agencies, anchor institutions, and businesses should break down their contracting into smaller procurement opportunities, make their economic inclusion goals public, and regularly release progress reports on their inclusion-related procurement efforts.
    • Businesses, funders, community partners, and government officials should enhance the connections and alignment across Baltimore’s growing portfolio of programs for start-up businesses and small business development. Explore ways to provide more financing and mentoring to business start-ups and small businesses, especially minority-owned firms, and create ongoing funding streams to support business development programs.
    • Public and private stakeholders should develop new strategies and tools to connect qualified businesses to supply chain needs, including the use of business databases, pitch events, mentoring, sector focused
      accelerators, and networking.

    • Public officials should continue to make improvements to MBE/WBE certifications through increased collaboration between local and state government officials, including adopting uniform definitions and standards across jurisdictions. The lists of MBE/WBE vendors should also be expanded to reflect a more diverse list of goods and services desired by businesses.
  • Increase workforce development resources and employment opportunities:
    • Public and private stakeholders should collaborate in identifying and pursuing strategies to expand
      resources for training programs and support services to generate a more skilled and job-ready Baltimore
      area workforce. The expansion efforts should build on proven, effective program models such as the 1B4J
      initiative and EARN Maryland. The efforts should also be targeted to growth sectors, and to industries that
      offer jobs with family-sustaining wages and benefits, as well as career advancement opportunities.

    • Business representatives, nonprofits, funders, and government officials should work together to increase programming and resources and refine policies to expand workforce development and employment opportunities for individuals with a criminal background.
    • Public partners, regional business entities, and community partners should collaborate to improve communication and dissemination of information on the job openings, qualifications for such jobs, and workforce development resources (such as the BIP workforce directory) that are available.
    • Stakeholders should expand the focus on employment opportunities for youth, including approaches that integrate demand-driven workforce development strategies and positive youth development such as mentoring and on-the-job training.
  • Identify and take steps to increase the economic inclusion results and community benefits derived
    from development and revitalization projects in Baltimore. In particular, public officials can:

    • Create a more predictable and transparent set of economic inclusion and community benefits standards for businesses and developers that receive public subsidies, such as tax increment financing
      (TIF) awards.

    • As part of the public approval process for development projects, set explicit standards for developers
      relative to community engagement and solicitation of community input regarding potential project impacts
      and economic inclusion.

    • Develop a framework with construction and community development leaders to align public and
      nonprofit workforce development resources to help support economic inclusion outcomes for construction projects of all sizes. At present, larger projects get political scrutiny and negotiated economic inclusion plans, while smaller and midsized projects are not a focus for such activities.
  • Pursue a more intentional approach to use local and state tax policies to promote economic inclusion. Public officials can:
    • Create tax incentives for buying or producing locally made products;
    • Redirect a portion of the Baltimore City PILOT (payment in lieu of taxes) fees paid by anchor institutions to a fund to provide seed funding and modest-sized grants to help promote the capacity of businesses and anchor institutions to undertake economic inclusion efforts as well as capital projects in distressed neighborhoods; and
    • Offer reduced property tax rates to businesses, and reduced PILOT fees to anchor institutions, in return for
      achievement of specified economic inclusion metrics that reflect concrete results for residents and other community stakeholders.

Conclusion

This report has provided evidence showing how increased economic inclusion can promote a healthier, more robust economy, alleviate social tensions, and improve the quality of life of all residents of the city and region. The report has also demonstrated that businesses and anchor institutions, working on economic inclusion efforts in partnership with each other, with community stakeholders, and with public officials, can create greater economic opportunities for Baltimore’s persons of color and its disadvantaged communities. If enough Baltimore-area businesses and anchor institutions adopt economic inclusion practices, together the collective effort will have a transformative effect, helping the city and greater Baltimore region realize their full economic and social potential.

———————————————————————————————————-

The section above is from the Conclusion and Key Recommendations Section of Collectively We Rise: The Business Case for Economic Inclusion in Baltimore.  The full report incorporates any necessary sources and footnotes.

bipabagConclusions and Key Recommendations