EMPOWERMENT ZONE STRATEGIES FOR BALTIMORE: LESSONS FROM RESEARCH AND EXPERIENCE
The goal of this study is to examine strategies that can be used to design productive economic and social programs for Baltimore's Empowerment Zone (EZ). To establish the foundation for this review, the report begins with a needs assessment that profiles the significant physical and social indicators in the two residential areas of the EZ, the East and West sides. We then assess the likelihood that the EZ incentive package can achieve the key goals of job creation and sustainable community development. Subsequent chapters address each of the following areas in turn: job creation and access; job training; child care; crime; and teen pregnancy.
Needs Assessment
- Labor force skill level. There is a clear discrepancy between the skill level of the EZ workforce and the level required to take advantage of citywide job opportunities.
- Potential for growth. Several areas in the EZ are potential "zones of emergence." That is, they are neighborhoods that already enjoy comparative stability and may be well suited to take advantage of EZ funding. Their resources include untapped labor pools, schools, churches, and unused land.
- Inadequate transportation. Although both EZ areas include a large pool of potential workers, existing public transportation is not yet capable of adequately transporting workers to existing and anticipated job sites.
- Economic diversity. Both the East and West sides of the EZ are economically diverse. Disparities are often extreme between neighboring census tracts. The northern and southern edges of each area tend to be more stable and prosperous--property values are higher, transit is more accessible, and crime is less prevalent. Central neighborhoods, in contrast, have greater needs.
- Impact of historical development on current needs. Temporary private housing has become permanent. Inadequate housing and economic inequality contribute to a weak physical and social infrastructure.
- Physical infrastructure. The quality and appearance of housing affects a neighborhood's ability to attract new home buyers and spur investment. Dilapidated housing, combined with inadequate roads and abandoned buildings, create the perception of a community in distress among both EZ residents and other residents of Baltimore.
A Critical Review of the EZ Incentive Package
The EZ initiative combines tax incentives with Social Services Block Grant (SSBG) funding to achieve overall economic gains and sustainable community development. In proposing the EZ legislation, the Clinton administration argued that it represented an important departure from past enterprise zone strategies that focused primarily on tax incentives to encourage capital inflows and business creation. The theory underlying the EZ legislation is that SSBG funding will compensate for the shortcomings of tax incentives used alone. In fact, careful review shows that past successful enterprise zones combined tax incentives with funding for job training and infrastructure improvements. Thus, combining tax incentives with social service funding is not a new approach. What is new, however, is the direct, proactive role of the federal government in its provision of SSBG spending and a traditional package of targeted tax incentives. The scale and scope of these combined incentives also make the EZ unique.
Our analysis suggests that small businesses in or near the EZ are the most likely sources of economic development. However, because small firms are typically unstable, they may have a difficult time using the delayed tax incentives effectively. On the other hand, the facility bonds provide an important source of capital, as long as they are accompanied by business development assistance. Fostering connections between fledgling, small businesses and larger firms with well-established track records could improve the success of the program. Strategies that cater specifically to large employers in the area, including the University of Maryland Medical Center and the Johns Hopkins Hospital, would bolster the commitment these institutions have already demonstrated to the success of the program and could yield long-term employment for the EZ residents. SSBG funds are likely to make the greatest contribution to sustainable community development if they are directed toward improving the social and physical infrastructure of the EZ, with the ultimate goal of achieving economic viability.
Job Creation and Access
Job creation is central to successful community development. Absence of earning opportunities causes the poverty that underlies the social problems manifest in the inner cities. The shift away from relatively high-paying, low-skilled manufacturing jobs partially explains the real wage declines for black, inner-city residents, especially for black high school dropouts (Peterson & Vroman, 1992). The decrease in manufacturing jobs especially affects EZ residents because many do not possess the skills or experience to qualify for higher-skill level service sector employment. The jobs for which EZ residents do qualify typically have low wages and limited opportunities for career advancement. This "skills mismatch" is compounded by a "spatial mismatch" in which jobs have steadily moved to largely inaccessible suburban regions.
Current thinking on inner-city job creation suggests that two strategies will need to be pursued simultaneously in the EZ: building upon any economic competitive advantage that exists in the EZ, and building upon the social stability already demonstrated in the "zones of emergence" that exist in the EZ. Based on a review of the literature, three strategies have emerged as successful generators of employment opportunities in inner-cities: loan programs combined with management and technical assistance; physical infrastructure improvements; and community-initiated job programs. However, the employment generated for EZ residents will likely be in the low-wage service sector. Typical wages fall short of annual living expenses for EZ families. Job access for EZ residents could be increased through mobility strategies, such as reverse commuting programs, which link residents with available jobs outside the EZ. Unlike job creation initiatives, mobility strategies can produce immediate results.
Job Training
Job training is an essential component of comprehensive efforts to improve conditions in distressed communities. By improving basic skills and providing vocational skills training in a classroom setting or in the workplace, job training programs attempt to address the skills deficit that exists in the EZ. A skilled workforce helps to attract and keep businesses. Thus job training also begins to address the spatial mismatch problem.
A review of the evidence indicates that past job training programs have had only modest success. While a number of the evaluations showed statistically significant positive impacts, these impacts did not necessarily help people achieve the desired results of economic self-sufficiency. The economic gains achieved by many in these programs did not always help to reduce the number of participants on welfare or lift them out of poverty. In addition, positive impacts were often concentrated among particular groups, like high school graduates or adult women. For youth, basic education skills were integral to program success as well as job placement and retention rates. Adults, however, benefited more from hands-on job training. Basic or remedial education alone appears to be less significant for adults. Programs which offered concurrent education and occupational training gave participants more skills than sequential programs, which require job search or completion of basic education training before providing skills training.
Child Care
Because a sizable proportion of families in the EZ have children, the need for child care will increase when parents enter job training programs, the workforce or education. Child care must be addressed from two perspectives: the immediate needs of the parents and the long term needs of children. For parents in the EZ, adequate and affordable child care would facilitate entry into the labor force, receipt of job training, or completion of education. Children need not only adequate, reliable care, but quality care that enhances school readiness and social development. Low-income families are often forced to make trade-offs between these needs. Child care interventions in the EZ should aim to achieve both goals.
Our review suggests that there is no one solution to the child care challenge that will be faced in the EZ as increasing numbers of parents enter the labor force. Since no one type of care has proved to be better than any other, programs should strive to give parents the opportunity to choose the type of care that works best for them. Because many of the new entrants to the workforce are likely to earn low wages, their child care costs will have to be subsidized. Subsidies that take the form of vouchers have the advantage of allowing the parent to choose the preferred mode of child care, although they are not typically allowed for the reimbursement of informal, unlicensed care. A high quality child care program that could be replicated in EZ is the Connecticut Family Resource Center.
Crime
Although it is difficult to establish a cause and effect relationship as to why several large cities such as New York, Chicago and Houston are experiencing dramatic reductions in crime, one characteristic these cities share in common is a substantial increase in community policing. Rather than focusing solely on responding to emergency calls and investigating crimes after they have occurred, community policing is a proactive approach focusing on crime prevention and problem-solving. It also promotes citizen involvement in crime prevention. Although the research literature on the impacts of community policing is still being developed, there is evidence that it reduces the fear of crime, and, in some cases, has also been associated with a reduction in actual crimes.
By some estimates, Baltimore has the nation's highest per capita rate of drug addicts. Yet the Greater Baltimore Committee (1995) reports that no state or local dollars are currently spent on drug abuse prevention in Baltimore. Further, although there are approximately 50,000 addicts in Baltimore City, there are only 5,300 publicly-funded drug treatment slots. The increase in juvenile crime in Baltimore has been associated with drug use. Two strategies to address juvenile substance abuse are school- and community-based prevention programs. One of the most widely recognized and successful programs targeting economically disadvantaged youth living in high-risk environments is the SMART Moves program of the Boys and Girls Clubs of America. This program focuses on enhancing personal and social competency through life skills training, along with alcohol and other drug education.
To address delinquency more generally, several major changes have been advocated for the juvenile justice system. Included here are: (a) the creation of a Juvenile Justice Center for the City; (b) a redefinition of juvenile law to consider the seriousness of the crime and not only the age of the offender; (c) the establishment of a system that identifies and removes problem children from destructive environments; and (d) compelling parental responsibility for their children.
In addition to actual crime, fear of crime is an important consideration because it can isolate residents in their homes, deter businesses from locating in certain areas, and frighten customers away. Initiatives to reduce fear of crime and disorder include community clean ups, community courts, foot patrols and substations, the Guardian Angels, and environmental design projects.
Teen Pregnancy
In the past 35 years, the national rate of out-of-wedlock teen pregnancy has increased steadily from 15 percent in 1960 to 71 percent in 1992 (Moore, 1995a). Baltimore's teen pregnancy rate today is three times the national average. There are no easy explanations as to why this has occurred. Factors such as job opportunities, educational advancement, deteriorating family structures and increased poverty influence a teen's decision to be sexually active and/or become pregnant.
The most effective teen pregnancy prevention programs include abstinence awareness and sex education, life-skills or negotiation training, access to contraception and case management. The Self Center program, previously active in Baltimore, included all of these components and teen pregnancy rates did decline. Baltimore's current array of school-based teen pregnancy prevention programs target adolescents of all ages and include some of the components that have proved most effective. However, most programs do not offer direct access to contraception, and Baltimore's teen pregnancy rate remains above the national average. Evidence suggests that the most promising strategy combines and aggressive teen pregnancy prevention strategy with increasing the opportunity structure for at-risk youth.
Implications and Conclusions
Because the EZ strategy is unique, its potential for success cannot be neatly extrapolated from past experience. Such extrapolation is especially hazardous given the wide range of approaches and programs we have reviewed, their different locales, and inconsistent methods of evaluation. Nevertheless, our review suggests that expectations for the EZ should be tempered by the knowledge that even the strongest approaches in the past have fallen short of their goals. Moreover, programs that had relative success elsewhere may not succeed in Baltimore's EZ.
Deliberate coordination of efforts may multiply the effects of success in ways that isolated programs have not. For example, new jobs may provide young people with the goals and opportunities that can help reduce teen pregnancy. A better trained workforce would not only qualify for more jobs, but could also attract more employers to the EZ. Reduced crime and a sense of improved security could foster investment. Coordination of programs may better enable neighborhoods to identify and build on their relative strengths, ideas that both the "competitive advantage" and "zones of emergence" theories of inner-city development consider key to success.
Regardless of the mix of programs implemented, the success of Baltimore's Empowerment Zone could be enhanced by ongoing evaluation. A formative evaluation would have the benefit of alerting policymakers to necessary mid-course corrections. The flexibility to change or modify programs along the way seems particularly appropriate to a policy as ambitious, complex and largely untested as the Empowerment Zone.
