For our mid-year Economic Roundtable, TNJ editors posed the following questions to a panel of Council of Urban Professionals members: 1. What should be the No. 1 domestic economic issue for the new administration in Washington? Why this particular issue? What steps/solutions would you like to see the administration adopt in addressing this issue? 2. What one or two developments domestic and / or global can impact your specific industry over the next six months to a year and how? How would that impact affect the overall economy? Here are the panelists responses:
Michael Alexander Blake
Assemblyman, 79th District
The Bronx, N.Y.
1. Implementing policies and regulations that will provide more access to capital and contracts to minority and women business enterprises so that they create jobs and economic opportunities in communities of color. Since the Minority Business Development Agency has determined that people of color will be the majority by 2050 if not earlier, there is a need to increase the amount of capital, and contracting opportunities for MWBEs. This effort will be impacted significantly by policies implemented within the administration. According to the MBDA, the number of minority-owned firms in the United States rose from 5.8 million in 2007 to 8 million in 2012 and employed 7.2 million people as of 2012. A study by the Kauffman Foundation in 2013 found that immigrants are nearly twice as likely as native-born Americans to start businesses each month. When you consider that 53,000 Latinos turn 18 years of age each month and an estimated one out of every three African-American males will be incarcerated at some point in their lives, it is critical for the new administration to develop a comprehensive strategy for MWBE success to ensure the economic vitality of the nation. In addition, with the increase of international trade and development, it is essential for an approach that facilitates engagement across global diverse partners.
2. Ongoing challenges posed by international terrorism and domestic gun violence can impact development and trade worldwide. There are regions in the United States where the private sector and other entities may be willing to invest, but may be deterred by the perception or reality of violence. Internationally, whenever another incident occurs or ongoing violence ravages a region, the likelihood of addressing the systemic poverty and economic conditions becomes even more challenging. Security, safety, academic, economic and quality of life investments in communities are absolutely essential in order for industry and entrepreneurial growth totake place over the next six months and beyond.
Council of Urban Professionals
1. Retooling the skills of our workforce for a 21st-century knowledge economy. Corporations have identified a skills gap and have turned their attention to workforces outside the U.S. The current administration has taken some steps to address this issue, allocating about $450 million in Trade Adjustment Assistance Community College and Career Training (TAACCCT) grants to train workers and job seekers in high-demand sectors (manufacturing, health care, IT, energy, transportation and logistics and agriculture). While this is a good start, it is imperative that the next administration build upon this by dedicating more resources to programs of this nature; focusing on higher capacity initiatives, such as leadership training, to mitigate the exodus of the baby boomers; and nurturing entrepreneurship and innovation so that we are not only addressing current demand but aggressively defining future needs.
2. Over the next six months to a year, we are keeping a very close eye on the U.S.s foreign policy stance as this will have a direct impact on how our corporate partners, many of whom are international organizations, will be able to conduct their business. In a global economy, where long-standing U.S. economic and strategic alliances have been tested by diverging interests, Americas trade and competitiveness need a reboot. As profits dwindle due to diminished competitiveness, companies are forced to be leaner, resulting in retraction across the board, including in philanthropic arenas, meaning less financial support for nonprofits. Nonprofits that do not have a well-diversified revenue portfolio, especially those whose portfolios rely heavily on corporate support, may suddenly find themselves struggling to remain sustainable.
Raymond J. McGuire, J.D.
Global Head, Corporate and Investment Banking, Citigroup Inc.
1. Jobs and education. We need to ensure that not only are we continually striving to create jobs but also preparing people to take those jobs. Our educational system must reflect the shift from a manufacturing to a service-based economy, such that everyone has an opportunity to participate in the mainstream economy. Additionally, the economic and social costs of issues such as long-term unemployment place an enormous burden on taxpayers.
2. ?Domestically, the U.S. elections, which will inform the political landscape. Globally, the coordination of central banks around the world. Both of these issues over the next 12 months will impact the regulatory environment. The nonuniformity of regulations among countries, particularly in Europe and Asia, creates a challenging competitive landscape. For example, the regulatory environment is having a significant impact on the competitiveness of financial institutions, globally. How central banks implement economic policy and influence the global regulatory structure will help to shape the overall economy in the months and years to come.
Partner, Macro Advisory Partners LLP
Former White House Deputy Chief of Staff
1. Passage of a tax reform package that includes more support to middle-class Americans, and financing for major infrastructure investments to repair our crumbling transportation, energy and water systems. The American Society of Engineers estimates it will cost $3.6 trillion by 2020 to close the infrastructure investment gap. Combined with a fairer tax system for the middle class, and a reformed and more competitive tax system, the U.S. would provide the foundation for a new era of economic growth, high-wage jobs, and more sustainable energy and transportation systems. We need to finance this investment while interest rates are low.
2. Chinas transition to becoming a service economy and its social, economic and political pitfalls is the most important driver of global economic growth. This rebalancing is likely to be rocky and will have a cascading effect on the global economy and emerging markets in particular. The other issue of concern is cohesion within the European Union as it grapples with slow economic growth, migration challenges and rising nationalist sentiment. The U.S. relies on Europe to be a strong partner in promoting global economic growth and combatting terrorist and other transnational threats and responses to geopolitical crises. So, while continued European stress may not cause immediate harm to the U.S. economy [with the exception of Brexit (U.K. withdrawal from the EU)-style risks], it creates long-term uncertainty about the trajectory of one of the worlds top four economies.