Day: Community benefits agreements make economic sense
Public policy debates pivot on a number of unwritten codes.
One such code is that the pressing issues of the day are uniquely and profoundly complex. This assumption is written into the background of nearly every debate and dovetails nicely with another: that those issues can only be resolved by a class of experts whose opinions must always be taken seriously regardless of substance or merit. When taken together, they can be used to support some pathetically thoughtless conclusions.
The evidence is on full display as Detroit debates a proposed Community Benefits Agreement, an arrangement that requires developers to negotiate benefits with community members when working on megaprojects in the city. It’s worth noting that the projects in question often rely on massive public subsidies to be viable. That is, Detroiters literally make these things possible with their tax dollars.
Yet the idea that projects relying on public largesse should benefit the public has come under considerable fire. Here, I’ll focus on one of the more consequential, and painfully obvious, realities that CBA opponents miraculously manage to confuse. Take the recent remarks from the Detroit Economic Growth Corp.’s CEO Rodrick Miller:
“I think it will be the most damaging piece of legislation that the city can have. We still haven’t hit critical mass as it relates to economic expansion in Detroit. This will make sure we don’t hit it.”
I include Miller’s comments not because they’re uniquely heinous, but because of their near-universal acceptance within the anti-CBA crowd.
There are two underlying assertions here. The first is that requiring developers to negotiate benefits with community members will discourage them from initiating projects in the city.
You’ll notice that those who make this claim never bother to cite any evidence. That’s for good reason — none exists. Instead, they place their bets on the public’s uncritical acceptance of their roles as the stewards of prosperity and the seeming complexity of the issue. The response is viciously dishonest remarks like Miller’s.
The second is that Detroit’s woeful economic condition is best solved by expanding economic growth. But when anyone implicitly links growth to public well-being, they’re invoking one of the most pervasive economic myths of the past half-century: that the benefits of growth inevitably trickle down. But that’s demonstrably false.
Not since the late 1960s, when public policy ensured America’s rapid growth benefited the bottom of the income scale slightly more than it did the top, has such change had any meaningful relationship to the economic status of America’s working-class.
As the Economic Policy Institute shows, what we’ve actually seen is that while the size of the economy has more than doubled since the early 1970s, the working class has been blocked from claiming its fair share of the growth.
Though not specific to Detroit, the basic point stands: The notion that growth inevitably trickles down has zero basis in economic reality. Strangely, this history goes unmentioned by the anti-CBA crowd. That’s likely because of what it would reveal, which is that this isn’t a profoundly complex issue.
Greater Detroit, where poverty festers alongside tremendous opulence, is this arrangement’s predictable conclusion. In an age of titanic inequality like ours, vague talking points about growth and prosperity aren’t just wildly misinformed. They’re historical forgeries.
I continue to be surprised that anyone takes this line of argument seriously to begin with. What’s less surprising is that CBA opponents prefer abstract economic thought experiments when the facts, though knowable, are decidedly stacked against them.
The well-grounded fear is that absent policies that reconnect growth and the economic well-being of the working-class Detroit may grow economically, but the gains will be almost entirely captured by a narrow slice of the population. Recent history gives no reason to assume otherwise. CBA opponents would have you believe that increasing the bargaining power of communities is somehow damaging when the exact opposite is true. Public participation in the decision-making process is one of many quivers in the arsenal to secure working-class prosperity.
The CBA is a partial, but meaningful, attempt to alleviate economic misery in the here and now by reconnecting the productive power of communities with the economic growth they help generate.
It’s precisely the type of policy idea warranted by the economy in which we actually exist. It may serve to bring some semblance of justice to a profoundly unjust economic arrangement. Our greatest threat comes from those who refuse to see history in its full detail.
Eli Day is a fellow at the ACLU of Michigan.