ASSETS Program Director Jonathan Coleman recently published an article in the Lancaster Newspaper titled “Business-based solutions can address violence, poverty”. In this article Jonathan gives some advice on how he thinks we can reduce poverty in the city.
When I moved to Lancaster city in 2013 to work at ASSETS Lancaster, I was often told that the city is new and improved, a different place than it was a decade ago. The dramatic development of downtown, the popularity of First Fridays and the influx of new residents, both young hipsters and still-hip retirees, were examples of a city on the way up. As I began to dig into some of the economic realities of the city, however, I soon realized that this success narrative was missing some important components. A decade ago, poverty rates in Lancaster city were 21 percent, according to U.S. Census figures. Today, that number has jumped to 29 percent. Worse yet, poverty rates in parts of the south side of the city today are at 40 percent.
It is clear from these statistics that despite the apparent rising tide of city development, not all boats have been lifted. Many of our citizens are being left behind. This reality impacts all of us, regardless of our economic status. Take recent criminal activity in Lancaster as an example. Each headline likely involves crippling economic underpinnings that go unmentioned in the news reports. It stands to reason that in light of this reality, a primary tactic to reduce violence could be poverty alleviation.
We must recognize that a renovated downtown, involvement in community peace initiatives, and more security cameras — while all positive initiatives in their own right — cannot offset the challenges to those living in poverty.
With this in mind, we want to propose a few ideas to reduce poverty using business-based approaches:
Support businesses and “social enterprises” that pay thriving wages.
The best way out of poverty is a good job. Why not, therefore, do everything we can to promote businesses that intentionally pay high enough wages for a family to not only survive, but thrive? The Lancaster Food Co. is a great example of a new social enterprise established for this purpose, intending to create more than 40 thriving wage jobs for those who struggle to find work elsewhere.
These companies only succeed, however, with adequate market demand. In Lancaster, that could include all of us who eat bread (and the expanding line of food products the company produces)!
Consider a Social Impact Bond to fund efforts to reduce poverty in the city.
A Social Impact Bond is an innovative financial product created to get funding into the hands of the most successful nonprofits. These bonds bring in for-profit investors who get financial returns, paid by the government, if the funded project results in reduced government expenses. Think this is unrealistic? Goldman Sachs recently made a $13.5 million investment into a Social Impact Bond aiming to reduce recidivism in New York. This model proves the financial value to society of investing in poverty alleviation.
Get money into the hands of underrepresented entrepreneurs so they can grow their businesses. Millions of dollars have been invested into city businesses over the last decade, but those efforts have not created prosperity for all, so maybe we should add a new approach.
At ASSETS, we are already working on this through our Lending Circles Microloan Program, empowering entrepreneurs from low-income communities to grow their businesses, creating new jobs and developing their neighborhoods from within. Lancaster needs more targeted solutions to fight poverty. These are a few ideas, but there are certainly others to be considered. Neighbors, nonprofits, businesses, and government should consider new shared vision and common goals to reduce poverty. The future is bright, but only if all boats can rise with the tide.