Lasting Livelihoods

The allure of wealth building is its capacity to improve lives. For that reason, the last essential component of wealth building is lasting livelihoods.

You might well work hard to increase stocks of capital, along with local ownership and control, in your region. But if low-income people, places and firms in the region are not doing better or are not well poised to do better, you have not met the WealthWorks test for wealth building.

Why is this so important? It’s because improving livelihoods for low-income people, places and firms is simply good economic strategy. If they stay low-income or fall further down the economic ladder, they have less to spend in your region, fewer family resources—like ready transportation, good health, time or network connections—that enable them to participate in and contribute to the community, and they may create strains on scarce public resources. If they do better, they spend more in the region, their children do better, and they contribute more time, resources and ability to community activities. As low-income people move toward and enter the economic mainstream, everyone does better.

How can this economic development strategy be altered so that those on the margins can participate in its design, and so that they will benefit from it?

Defining lasting livelihoods

In WealthWorks, people, places or firms achieve lasting livelihoods when they:

Increase upward mobility. This means that the person, community or business is doing better economically than in the past. They have more income, revenue, profit and can more easily “make ends meet” and move further up the economic ladder.
Increase resilience. This means that when a crisis hits, they don’t go into a tailspin. They are able—through their know-how, networks and available resources—to marshal what it takes to make it through the crisis and bounce back in a reasonable amount of time.
Increase future prospects. This means that the person, firm or community has acquired more of the kind of capital that will help them do even better in the future. They have gained know-how, health, savings, connections, energy and influence that position them to move even further into the economic and social mainstream.

When low-income people do better, they spend more in the region, their children do better, and they contribute more time, resources, and ability to community activities.

Photo University of Wisconsin Health Department

Making the Case for Lasting Livelihoods

How many times have you heard a story about an economic development effort in which jobs were created or new businesses opened but local residents—particularly those working hard but struggling to get ahead—were left out? Or a story where a boom in a region’s economic activity has boosted income and housing values for the well-to-do, but had the effect of pushing low-income people down and out?

Why does this happen? It’s partly because economic development strategies typically are not designed to specifically include low-income people, places and firms in the action and the benefits. So they rarely do. Without intentional design, low-income individuals are left out of the idea generation, the planning and the decision-making—and as a result, they miss out on any positive results.

Of course, WealthWorks strives to help any and many people, places and businesses in a region attain lasting livelihoods. But it places special and intentional focus on moving those on the economic margins up the rungs of the livelihood ladder.

One way to think about this is to recall the five guidelines for thinking about the eight capitals: One guideline encourages you to always be on the lookout for underutilized resources. Low-income communities, people and firms often are exactly that—sorely underutilized resources in a region. If they are drawn into more participation in new ways, they will become more productive as a result, and the entire region and economy will benefit. That’s why intentionally and always including a focus on improving low-income livelihoods is critical to the WealthWorks notion of wealth building.

When low-income people do better, they spend more in the region, their children do better, and they contribute more time, resources, and ability to community activities.

Wealth Building Opportunity: Improve Livelihoods

Only by constantly asking the livelihood design question will you consistently produce better livelihoods. That question is:

How can we choose, organize or adjust this economic or community development strategy so that those on the margins can participate in its design, and so that they will benefit from it?

In answer to that question, low-income people, places and firms can play many roles in economic and community development efforts:

Explorers and planners. Most every economic or community development activity will—or could—have some impact on low-income people, places or firms. One thing those on the margins can always do is offer their ideas about what those impacts will be, and how to either diminish them if they are negative, or leverage the activity to actually produce some benefits instead. In fact, they may be the experts on this!
Producers or suppliers. Economic and community development efforts can be intentionally structured to incorporate lower-income producers and suppliers. For example, a regional tourism consortium might intentionally work with local mom and pop restaurants or motels to improve their look, fare and service—producing benefits for both those firms and the regional effort as a whole. Or an effort to get farmers to grow a new biofuel crop might conduct special outreach and training for small-plot farmers that might not have had the resources to get in the game.

Investing to train local workers for existing jobs not only builds skills but leads to better jobs, larger incomes, and greater stability for families.

Employees. Low-income people can move into new or better jobs. Regional partnerships that are tasked with attracting and growing businesses can provide incentives that have low-income-benefit strings attached—like local hiring, livable wages and opportunities for advancement for local residents. Partnerships can be structured with local agencies or community colleges to help train and build career ladders that can move low-income workers and the unemployed into jobs in key sectors.
Consumers. Economic development projects can benefit low-income people, places and firms by asking how new businesses or developments can provide cost savings or provide new services for low-income people. For example, project partners might choose to produce or protect quality affordable housing for low-income consumers. Or a collaborative could figure out how to help low-income residents afford energy retrofits that save energy costs over the long-term through affordable short-term payments on their monthly bills.
Owners of assets. Low-income people, places and firms sometimes own assets that, if integrated or better utilized, could save costs or generate income. For example, families might have small forest plots that could generate some income through sustainable harvesting. Or community members can pool their tools to create a Tool Lending Library that they can all use to help with home and Main Street improvements. Low-income mobile home renters can band together to become joint owners of a mobile home park.
Beneficiaries of products or services. Economic development projects can produce indirect benefits for low-income people, even if they are not the primary customers. For example, a “local food system” effort might share excess produce with schools and a regional food bank, providing low-income people with greater access to fresh food. Or a regional tourism effort that includes gaming might intentionally set aside 2% of the gaming profits for investment in a tribal community fund—and assign tribal youth decision-making power over its use.

In WealthWorks, the goal is not to build wealth for a small handful of residents, but to build wealth for many, and especially for those who need it the most. Incorporating low-income stakeholders in key roles ensures that investments are made in ways that will build their wealth, connections and prospects.