2020 Newsletters
Linked below are Nowak Metro Finance Lab newsletters, shared biweekly by Bruce Katz.
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Last month we wrote that local economic stakeholders could not afford to wait for certainty about the federal balance of power before organizing their plans for recovery. We proposed a five-part roadmap to help them prepare in light of the uncertain prospect of federal stimulus. Today we examine how to advance New Localism generally, and the relationship between the federal government and American cities and metros specifically, in the Biden Administration.
Our thesis is straightforward: governing effectively to build back better from our current domestic crises will require the Biden Administration to utilize the full energy of American cities and metros (irrespective of who controls the Senate).
For many reasons, this is much easier said than done. Read more...
As our nation turns its weary and anxious eyes away from the election, we are thinking hard about what comes next. We are entering into one of the worst phases of the COVID pandemic with massive uncertainty about what type of stimulus will come and when.
Our message here is a simple one: local economic stakeholders cannot afford to wait to proceed until the federal fog of uncertainty lifts. They must start organizing now. Read more...
One of the best parts of my job is the chance to work with reflective practitioners from around the world. These individuals are often at the vanguard of problem solving in our societies, given their unusual combination of subject matter expertise and hard-earned practical experience. This is the essence of New Localism and helps explain the rise of city and metropolitan networks as key agents of change. Read more...
I am participating next week in a UK conference on Creating Communities: Places beyond the Pandemic. The conference is designed to wrestle with the central question: How can place-based policy and regeneration enhance communities and prosperity? Read more...
COVID-19 and the fallout from it confronts Philadelphia with series of overlapping health, economic, fiscal and social crises. These are perhaps the deepest crises the city has faced in modern memory, but its roots are not new. COVID-19 has accelerated and reinforced deep challenges the city was facing even before the pandemic struck — crises of equity and inclusion, of overcoming inequality and deeply concentrated urban poverty, of building a more robust, sustainable, inclusive and resilient economy. It has become something of a cliché to say a crisis is a terrible thing to waste. But we surely can’t waste this one. There is a rare opportunity and obligation to finally address the deep challenges and overlapping crises facing Philadelphia, and build the city back better. Read more...
Throughout the COVID-19 crisis, small businesses have been struggling. As discussed in earlier newsletters, federal relief efforts like the Paycheck Protection Program (PPP) have left too many behind, and the economic road to recovery will be lengthy. Throughout the summer, then, we’ve been working to understand the state of small business prior to the COVID-19 crisis, as a baseline to guide the substantial work that needs to be done during and following the pandemic. This focus has led a group of us to conduct national and state-level analyses of the Annual Business Survey, trying to understand specifically the state of Black-owned businesses in America. We have also done a deep dive into the work of foundations, think tanks, consultancies, constituency organizations, government, and academia to understand what strategies have been deployed in the past to promote economic inclusion and equitable growth. Read more...
Five months into the COVID-19 crisis, the outlook for the country’s small businesses is as murky as ever. COVID-19 cases continue to rise across the country, slowing and halting many states’ reopening plans. Even if we were as far along in combatting the virus as we had expected to be in mid-July, small businesses’ path to recovery would be extraordinarily challenging. Read more...
As Congress negotiates the next COVID-19 relief package, it is clear that the size and incentives surrounding unemployment benefits will be a major focus of contention between Republicans and Democrats in the Congress. We add another proposal to the mix: use unemployment insurance to encourage entrepreneurship as well as traditional employment. At present, in all but five states unemployment insurance only encourages employment pathways into traditional salaried jobs offered by existing companies, even though there are not enough jobs to go around. Fortunately, a solution already exists and is underway in those five states — Delaware, Mississippi, New Hampshire, New York, and Oregon. It’s time to expand it across the nation. Read more...
Our recent analysis of the US Census Bureau’s 2018 Annual Business Survey revealed that there are 124,000 Black-owned employer firms in the US, representing only 2.2% of all employer businesses even though Blacks make up 14% of the US population.[1] Black-owned employer businesses are smaller, with fewer employees, lower average revenues, and lower average payroll expenditures, than businesses overall. That’s partly because these firms concentrate in sectors of the economy that pay less and offer fewer opportunities for productive growth. Read more...
My colleagues and I recently completed an analysis of the 2018 Annual Business Survey to identify the state of Black-owned business on the eve of COVID-19. To refresh: our topline finding showed that there are 124,000 Black-owned employer firms in the US, representing only 2.2 percent of all employer businesses. Black-owned employer businesses in the U.S. are smaller, with fewer employees, lower average revenues, and lower average payroll expenditures, than businesses overall. A key — but not sole — reason for this is because these firms concentrate in sectors of the economy that pay less and offer fewer opportunities for productive growth. Read more...
Since the beginning of the COVID-19 crisis, my colleagues and I have chronicled the impact of the economic shutdown on small businesses in general and on small businesses owned by people of color in particular. This research has taken on new significance in recent weeks with the civil unrest following the horrific death of George Floyd and the intensified focus on police brutality and entrenched racial disparities in income, health and wealth. Read more...
Five weeks ago, we wrote about the shortcomings of the US response to the COVID-19 public health and small business crises and the need for a structural response, particularly the recommitment to, and rebuilding of, our institutions at the local, inter-local, federalist, and federal levels. Given the unprecedented fiscal impact of the crisis, we see the need for a respected federalist intermediary to address the third wave of this crisis—the oncoming state and local fiscal meltdown. Read more...
On April 8, the three of us — along with two close colleagues, Rick Jacobs and Jamie Rubin — published a piece entitled Needed: A Main Street Emergency Act. Our thesis was stark and straightforward. The COVID-19 crisis is wreaking havoc on small businesses across cities, suburban municipalities, and rural towns, particularly micro businesses that employ fewer than 20 employees and offer services vital for our communities. The local relief funds established by public, private and civic stakeholders, while fit to purpose, are already oversubscribed and undercapitalized. And the federal responses enacted as part of the CARES Act are already proving to be insufficient in scale, timing, product and distribution scope to address the needs of Main Street businesses. Read more...
The COVID-19 crisis is wreaking havoc on Main Street small businesses across the United States. Millions of small businesses have shuttered for the duration of the crisis. The hardest hit are Main Street enterprises living on the brink — restaurants, bars, coffee shops, barbershops, hair salons, auto repair shops, dry cleaners and others that provide face-to-face services. These entities, usually sole proprietorships or businesses with fewer than 20 or even 5 employees are running out of cash or already broke. Micro businesses owned by people of color are most at risk, given decades of redlining and structural racism in the financial industry. Read more...
The numbers are simply staggering. As of April 30, 30 million Americans had filed for unemployment since the onset of the COVID-19 crisis. As the United States slowly begins to re-open, the only certainty is that our uncertainty about how best to contain the contagion rules out any quick economic rebound. For the foreseeable future, our economy will stumble through a slow thaw and millions of people will be out of work. Now is the time to help these unemployed workers and young first-time college students acquire the skills they will need to thrive in our tech-powered economy. Read more...
Setting the Landscape
Weeks ago, as the extent of COVID-19’s effects on the economy were becoming a reality, we wrote that the sequencing and deployment of small business relief would be “messy and chaotic” rather than “linear”. Four weeks and one update of the CARES Act later, the situation remains as murky as ever: the spread of the virus is not yet under control, state responses are uncoordinated, and unemployment claims continue to climb. Read more...
As the demand for re-opening the economy takes hold, we must now think about how this will play out on the ground, particularly in those places — our downtowns and central business districts — that form the cores of our cities and metropolitan areas. Central business districts are not only centers of commerce but also hubs of cultural and civic life. Visible signs of revival in these places will go a long way towards accelerating the restoration of public and consumer confidence. By contrast, the persistent presence of empty streets and shuttered shops — buildings intact, but little life within them and few “feet on the street” — will retard the broader revival. Read more...
History teaches us that crises lead to institutional transformation. The United States is no exception and has a long history of new federal institutions being created in the aftermath of crises: The New Deal in response to the Great Depression, the Homeland Security Administration after 9/11, and the Consumer Financial Protection Bureau following the housing crash of 2008/2009. Read more...
The COVID-19 crisis is wreaking havoc on Main Street small businesses across the United States. Across the U.S. tens of thousands of small businesses have closed for the duration of the crisis. The hardest hit are local face-to-face Main Street services — restaurants, bars, coffee shops, barbershops, hair salons, auto repair shops, dry cleaners and others that are living on the brink. These entities, usually sole proprietorships or businesses with fewer than 25, 10 or even 5 employees are running out of cash or already broke. Read more...
As the COVID-19 crisis continues to wreak havoc on small businesses across the country, local and national actors have begun to realize the enormity of the economic challenge at hand. Shortly after a record high 3.3 million in weekly unemployment claims were announced, President Trump signed the CARES Act into law. The race to save our small businesses is on, and it promises to be a challenging one. Read more...
The impact of COVID-19 on small businesses and the places where they co-locate and concentrate — downtown, Main Streets, commercial corridors — has been immediate and devastating.
“Almost overnight, downtowns have eerily become lifeless movie sets — literally former shells of their former selves; the buildings are intact (unlike after a flood), but there is little or no business being transacted given the imperative of social distancing and the collapse of basic consumerism,” we contend in our new report, “Why Erie's Downtown is a Proxy for the Nation: The Future of Main Street Businesses amidst the Covid-19 Crisis.” “If we can keep businesses alive, then the bounce back will be rapid and pronounced. If businesses collapse, then the recovery will be slow and painful.” Read more...
The public health system in the United States, suffering from budget and staffing cuts precipitated by the Great Recession and current administration’s decisions, does not have the capacity to address the coronavirus crisis. We are equally concerned that our current suite of disaster relief and financing programs are unable to respond to the devastating blow dealt to America’s small businesses. Tuesday evening, Treasury Secretary Steve Mnuchin warned that, absent stimulus and intervention, unemployment in the U.S. could reach 20% in the near future. Read more...
It’s hard to avoid the topic of billionaires in Democratic politics these days. Senator Sanders has focused on the 400 wealthiest people who together control $2.9 trillion to justify his agenda of broadly expanding the welfare state. Senator Warren on the other hand, has proposed a wealth tax on households worth more than half-a-billion which would raise $3.25 trillion of federal revenue over the next decade. Vice President Biden, the frontrunner after Super Tuesday, shows less outright hostility to billionaires. Nonetheless, his proposal for raising revenue is similarly oriented to those of Warren and Sanders in focusing on taxing wealth rather than work (especially through capital gain tax increases and closing foreign tax havens). Read more...
In my first newsletter this year, The Year of Advancing Community Wealth, I wrote the following,
“…we need to codify the new governance features and innovative practices used by leading urban institutions and intermediaries so we can speed replication horizontally across cities.” Read more...
On Monday, Iowa gave a significant boost to the candidacy of Pete Buttigieg, the mayor of South Bend, Indiana. Although the results (incredibly) are not final, Mayor Pete defied recent expectations set by the national media, political pundits and a raft of polls. His performance has prompted me to re-publish an oped that appeared in the Financial Times on December 15, 2019. The opinion piece was my effort to explain how a little-known mayor of a small city could ascend so quickly in in the scrum that is Democratic Party politics. Read more...
In the early days of this year, we’ve both been heartened by the changing behavior of institutional investors towards climate: divesting from the bad and investing in the good.
Earlier this month, for example, New York City Mayor Bill DeBlasio and London Mayor Sadiq Kahn launched the latest version of their Divest/Invest campaign to persuade cities to move pension fund investments out of fossil fuel industries. A growing number of cities around the world — New York City, London, Auckland, Berlin, Copenhagen, Melbourne, Oslo and Stockholm — have signed on and C40 Cities, the international group now led by Los Angeles Mayor Eric Garcetti, has released a high quality toolkit to guide city actions. Read more...
A New Year is a time to plan, which is always a bit daunting for someone like me who likes to dabble, gets easily distracted and is always captured (if not obsessed) by the new and novel. But I did spend some time during the holiday break thinking about how to make 2020 The Year of Advancing Community Wealth, drawing upon the work that I have been doing with Ross Baird, Rick Jacobs, my colleagues at Drexel and a group of remarkable practitioners and organizations from around the country. Read more...