Thread by @TimBartik

My report on helping distressed communities w/ a federal block grant is being released today by @BrookingsMetro . This report provides a plan for how federal policymakers can cost-effectively boost employment rates for residents in distressed areas. (1/N) brookings.edu/research/helpi…

To achieve the ultimate goal of boosting employment rates for residents in distressed communities, the block grant would fund both public services to help create & retain jobs, & services to help unemployed and underemployed residents access those jobs. Both are important. (2/N)

The targeted distressed communities are local labor markets w/low employment rates (employment/ population ratios) for "prime-age" workers (ages 25-54). The targeted areas have a population of about one-sixth of the U.S., & include rural & urban areas throughout the U.S. (3/N)

Here is a map of distressed areas, based on the most recent comprehensive data on counties' employment rates. The report suggests both targeting persistently distressed areas, and then in 2022 adding in more areas that were made distressed by the pandemic. 4/N

The targeted areas would be provided with block grants to help make up their gap in employment rates with the national average. The block grant would be provided for 10 years, at annual funding that would average around $231 per capita per year for each area. 5/N

Total federal cost would be $12.8 billion per year for 10 years, for a total cost of $128 billion. The per capita funding levels are similar to what was provided to the Tennessee Valley Authority at its peak funding, but provided to multiple local labor markets. 6/N

The block grant funding would go to public services that would enhance business inputs to create jobs, including: business advice programs such as manufacturing extension programs; customized training programs provided to business by local community colleges; 7/N

infrastructure programs such as broadband, transit improvements; land development programs such as brownfield redevelopment, business incubators, & research parks. 8/N

These public services have been shown to be more cost-effective in creating jobs than business tax incentives: (9/N)

Block grant $ would also go to increase resident access to jobs via workforce programs, including customized training, raining services embedded in trusted institutions in low-income neighborhood institutions, & success coaches to help residents retain jobs. (10/N)

The block grant is designed to allow for local creativity in meeting diverse local needs, & not a federal top-down approach. But there would be accountability requirements. Local areas would be required to come up with approved plans and use programs that are cost-effective 11/N

States in which local areas received federal help would be required to CAP business incentives provided to LARGE firms in NON-distressed areas, at max cost/ job. Such incentives are not cost-effective, unfairly favor large firms, & go against helping distressed areas. 12/N

The proposed plan would be sized to eliminate half the gap in employment rates between distressed areas & U.S. over 10 years. By targeting areas with high non-employment, the program is estimated to increase overall U.S. employment by 0.9%. (13/N)

This program complements macro programs to have a good jobs recovery from the COVID-19 recession. Macro job creation still will leave many distressed areas behind, both those previously distressed & new distressed areas. Local economic distress does not solve itself. (14/N)

By providing targeted aid to distressed areas, and further designing aid to both create jobs and increase job access, the block grant will make the recovery from the COVID-19 recession more inclusive of all of the U.S. (15/N)