Economic Development

Why you should cover poverty and economic development in your county

Ron Sherer, veteran reporter of social issues at the Christian Science Monitor, puts economic development above all other topics related to poverty. “People with good jobs aren’t poor. So in my mind, that’s the biggest issue: How do we get more jobs for people?” he said in an interview.

Don’t assume that economic development coverage belongs to the business desk. It’s important for any reporter covering poverty.

Here are five reasons to include business and economic development in coverage of poverty:

  • To have an income that raises them above the poverty level, people need good jobs. Economic development is all about creating jobs.
  • From the Occupy Wall Street movement to debates about health care and welfare, many of the leading issues of the decade involve economics and the need for development that addresses societal problems. Few areas of coverage touch on so many hot-button topics, many of them related to poverty.
  • Spending on economic development is a big chunk of every federal budget. The Obama administration pinned its jobs policy to the hundreds of billions in stimulus money under the Recovery Act. Yet much of that spending is invisible to citizens as it makes its way through the system and down to the state and local level. It’s our job to make that federal spending trail visible.
  • Economic development is about solutions. By focusing poverty coverage on “what works” in economic development, we make the topic more engaging and interesting.
  • Economic development itself is the source of much debate. What’s the best way to create jobs? What measures are most cost-effective? These questions are an essential part of reporting on government policy and accountability.

How to measure the opportunity to cover poverty and economic development in your county

Under the American Recovery and Reinvestment Act of 2009, better known as the federal stimulus program, the government allocated $840 billion through 2012 in direct grants, entitlements and tax benefits. Yet, down at the street level, many people would be hard-pressed to say where they’ve seen this spending in their community.

How the government can best contribute to economic development is a key political question even in times of prosperity. Looking at the stimulus is one way to learn the framework of government approaches to economic development, and how money flows from federal and state levels to local communities.

The main starting point for information about federal spending is at USASpending.gov. For information about the stimulus money, there is also Recovery.gov and the nonprofit ProPublica.org.

From there, you’ll want to look at details on federal and state agency websites, and follow those down to the level of your county or all the counties in your market area.

Start with some basic measures of where and to whom the federal money went, and let the story ideas emerge from there:

  • How much money in total flowed to your state in the past year? To your county?
  • Who were the biggest recipients?
  • How much went to loans for businesses? How much for grants to state agencies? How much awarded to contractors? How much went to direct assistance?
  • How many jobs were created or supported by those allocations?

1. USASpending.gov has data on all federal spending that can be searched using multiple filters, so it is a good resource for reporting on economic development in general. It has details results on recipients. You can narrow your search to include only stimulus money.

Keep in mind that the search results will show only what has been awarded from federal government agencies, not state agencies. Results will include awards for which no money has yet been spent.

2. Recovery.gov is a user-friendly government website with a graphic interface focused just on stimulus money. Recovery.gov actually pulls its data on agency spending from USASpending.gov. But Recovery.gov also shows the breakdowns of stimulus funds paid out by the federal agencies and expenditures by recipients, which are not displayed on USASpending.gov.

Not all of the spending data is reported on Recovery.gov because it covers only those recipients who have to file jobs reports directly to the federal government. Although the site says it includes loans, it does not include loans to individuals such as student loans.

3. ProPublica.org, the nonprofit public interest reporting organization, has created a tool for journalists and citizens to understand how the stimulus affected their communities. Three reporters have done much sifting and cleaning of the government data, and the site presents it in a very usable form. ProPublica creates a number of tools for following money spent in the public sphere.

Measuring job impact is trickier.

The Recovery Act, like many economic development packages, was touted as a way to create jobs. But accurate and current figures about the number of jobs are nearly impossible to calculate except at a very local level.

The reason is that there are no cumulative reports about the number of jobs created under the stimulus. Even the quarterly reports are misleading. Each recipient of a stimulus award has to report quarterly, even if no work has been done. So some awards are listed with zero jobs for the quarter.

In addition, Recovery.gov notes, you cannot simply total the number of jobs for each quarter to get a cumulative total. This “would present misleading and inaccurate information because some of the jobs span quarters so they would be counted more than once. And, some recipients only report the job in the first quarter but mistakenly believe that they don’t have to report the same job in subsequent quarters.”

Also, subrecipients and vendors do not have to report on the number of jobs created, the site notes. Since much of the money from prime recipients is spent through contracts with vendors and other subrecipients, many jobs don’t show in any reports.

If you cover a single county with a limited number of businesses and organizations that received money, you might be able to make a good estimate of the number of jobs, although it would take a fair amount of leg work and calculation. You’d need to compile numbers from the quarterly reports and contact each of the recipients to check those numbers. You’d also need to find out about subawards, and contact those recipients to ask about jobs.

A step-by-step approach to finding and reporting important and engaging stories

Economic development spending by the government has numerous facets, and flows into communities through many federal and state agencies. Here’s a step-by-step that you can follow to look at federal spending to boost jobs.

Step 1:

Gauge the impact of federal and state spending on your area’s economy. If you’re looking at stimulus money, start from ProPublica’s Eye on the Stimulus project and get a comparison between your county, the state and the nation. It also allows you to drill down to get details about the money in your county. For all loans, grants, or contracts, whether related to the stimulus or not, start from the USASpending.gov site’s summaries by location.

Step 2:

Evaluate where the bulk of spending was. Compare your area to others.

How does unemployment in your county compare to the national average, and the state average? What about the per-capita funds for your county compared to national and state? If there are significant differences, why?

Now look at the spending by category. How does your area compare to others in terms of the per-capita small business loans, educational grants, highway construction contracts?

From hospitals to Head Start, the Department of Health and Human Services distributes more money in contracts and grants than any other federal agency. These are some of the most important programs that support low-income people. Where does that money go in your community? How effectively does it help people move into better jobs?

Step 3:

Following the money from the federal and state agencies down to your local level, you can prioritize where you should look more closely at economic development.

A few examples:

  • Small businesses create more jobs than large businesses. Every year, the federal government backs Small Business Administration loans. Who were the recipient businesses in your community? How many jobs were saved or created as a result of the loans? Did any of the businesses fail in spite of the loan?
  • In Georgia, as in many other states, by far the largest portion of stimulus money was directed to education. A big chunk was in Pell Grants. How many students went to college that would not otherwise have gone? [For stimulus money, ProPublica includes these numbers in its data, but Recovery.gov does not.]
    Other money flowed down to local boards of education. What did your local school district spend stimulus money on? Was it new funding, or was it a renamed substitute for previous federal funding (for example, on special education)? Did it add jobs, or prevent layoffs – or preserve the status quo?
  • The Department of Agriculture received millions for housing loans to very low to moderate income families. How many families in your area benefited? Do local real estate agents have any anecdotal evidence of how these loans resulted in home purchases that would not otherwise have been possible? How did the stability of owning a home affect the lives of these families?
  • The Department of Energy spends money on conservation measures that reach all the way to individual homeowners; more than a million homes nationwide were included in a weatherization program under the stimulus. How many people in your area had their homes weatherized? Was the work done by local businesses, and if so, did it create any new jobs?
  • The EPA routinely issues water quality grants across the country. What improvements were made to the water system? What were the public health benefits? Were any jobs created?

Step 4:

Find the people who were employed in these programs. Did their employment last? Did other jobs follow?

Track the results of programs intended to boost employability for the employed or in low-wage jobs. What do the participants in those programs say about them?

Step 5:

Talk to the major employers in your area. What are the barriers to growth for their companies? Of all the government spending, which ones have helped them to add jobs?

 

Essential resources

Data

The go-to resource for federal spending is USASpending.gov. USASpending has documents on contractors, which you can search for by name.

When investigating a contractor, check the list of debarred federal contractors.

For data specific to the Recovery Act, you can use the official federal Recovery.gov site, or the Recovery Tracker on the ProPublica site.

Each state has its own website about stimulus spending. You can look up your state from this directory on the Recovery site: http://www.recovery.gov/FAQ/QuickLinks/Pages/StateRecoverySites.aspx

Georgia’s page is here: http://stimulusaccountability.ga.gov/02/gov/stimulus/home/0,2804,134245182,00.html

Policy, Politics, and Background

Politifact rates the truth of political statements in an engaging and concise format. Many of their truth-o-meter reports and stories have covered the fact and fallacies about the stimulus and, more broadly, economic policies.

The Center on Budget and Policy Priorities is a think tank which publishes research related to economic development.

The Corporation for Enterprise Development takes a “think-do-invest” approach to economic development in low-income areas and offers analysis of approaches to economic development.

For the “social entrepreneur” perspective on all development issues, read the discussions on Social Edge.