DAVE HENGEL COLUMN: An inclusive economy is crucial to our regional competitiveness

By Dave Hengel

October 08, 2022 at 6:50 AM

Earlier this year, Greater Bemidji went through extensive strategic planning. The goal was to assess our current initiatives and identify challenges, opportunities and emerging trends that affect our community. Ultimately, we wanted to ensure we are doing all we can to drive economic development and promote prosperity in the region.

We identified several opportunities we wanted to pay particular attention to, one of which centers around building an inclusive economy. Simply put, building an inclusive economy involves identifying and implementing strategies that aim to improve economic opportunity for all our community members, with a focus on disadvantaged residents.

Let鈥檚 be clear about what we mean by disadvantaged. For this conversation, I consider community members who are not given access or opportunities in the economy as disadvantaged. This may take a variety of forms. It may include residents who are generationally poor, single mothers, people of color or someone with a disability.

Disadvantaged community members may have education barriers 鈥� not completing high school or having no further skill development or work experience. They may face practical barriers such as a lack of childcare or reliable transportation.

Regardless, we are talking about those who want the opportunity to support themselves and participate in community life but will require some support and assistance to do so.

Before we address why it has risen to such importance to be one of the top strategic challenges facing Greater Bemidji, let鈥檚 get past any question of whether economic disparities are a problem nationally and in our region. The facts are clear.

The stats

Since the Great Recession ended in 2009, the United States has gone through one of the longest economic growth cycles in our history. Yet not everyone is benefiting from our economic growth. Actual median household incomes (adjusted for inflation) in the United States are lower than they were before the recession.

The decline in median household income is dramatically higher for disadvantaged individuals and families, especially for people of color. This has resulted in a reduction in the middle class, widening the gap between the haves and have-nots.

Moreover, there has been almost no change in the percentage of people living in poverty over the last 50 years. The U-6 unemployment rate (which includes discouraged workers that the reported unemployment rate does not factor in) remains high nationally at 7%. Distressed communities are becoming more distressed and prosperous places are becoming more prosperous.

These disparities are true for our greater Bemidji region as well. We have seen strong economic growth in the last decade. We have had good job growth. Sales and investment are increasing. Unemployment rates are declining. But the benefits of Bemidji鈥檚 emerging region center economy have not been universally shared.

Here are just a few examples. The median household income for white households in our region is $49,000, yet for our Native American households is just $29,800. Unemployment rates show a similar discrepancy.

White workers have an unemployment rate of 3.1%, while Native American workers face a 21% unemployment rate. Poverty for white residents is 13%, while 35% of Native American residents live in poverty. The poverty rate for other people of color is similarly high. For example, the poverty rate for Black residents of our region is 65%.

The discrepancies are not just based on race. The less educated have far worse economic outcomes than those more educated. Residents with a high school education (but no additional schooling) have a median household income of $21,000 and nearly 6% are unemployed.

Community members that had attained a bachelor鈥檚 degree have incomes 225% higher than high school graduates ($47,000) and experience almost no unemployment (1% unemployment rate).

These are just a few examples.

The impact

While I am open to arguments about how we got here and what we should do about it, the evidence is very clear: the benefits of our community鈥檚 economic growth have not been widely shared.

At our core, economic development organizations like Greater Bemidji are focused on encouraging capital investment and job creation in their communities. While we are concerned with the distribution of jobs and investment in the region, economic developers historically have seen the issue as a challenge for some other organizations to address.

We have believed that if we just continue to drive development and create jobs a rising tide should lift all boats. Unfortunately, this idea has been shown to be fundamentally flawed.

We now realize at Greater Bemidji that we, too, have a role to play in building an inclusive economy. It鈥檚 clear that disparity in opportunity not only affects the quality of life for many of our citizens but also has a major impact on our economy and future economic growth. To remain economically competitive, we have to build a more inclusive economy.

The question is, 鈥渉ow?鈥� What steps can Greater Bemidji take to be a part of the solution? That is where we need your help.

We have made some key strides in the past few years. We have worked to ensure resources and opportunities are widely shared. In partnership with the state, we have a loan fund targeted specifically to disadvantaged businesses.

We provide business support and counsel to disadvantaged small businesses all at no cost. We created the Minnesota Innovation Initiative to provide skill training and job placement, particularly for low-skill and low-income workers.

We are addressing key barriers to work 鈥� working to expand childcare and beginning conversations around how we at Greater Bemidji can impact workforce housing and transportation as well.

We know there is more to do, but we don鈥檛 have all the answers. Bemidji is blessed with committed organizations and individuals who have fought for decades to support our disadvantaged community members.

We will be reaching out to these partners in the coming months to seek their advice. We are certain success will require a community-wide, collaborative effort. While we are only one piece of the puzzle, we stand ready to play our part.

So once again I ask, 鈥淲hich way, Bemidji?鈥� What do we need to do to ensure we are building an inclusive economy? How can we create opportunities for all, particularly our disadvantaged community members? We鈥檇 love to hear from you.

Dave Hengel is the executive director of Greater Bemidji Economic Development. He can be reached at (218) 444-5757 or dhengel@greaterbemidji.com.

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