1. Siamese Twins: Family Economic Success and Community Economic Success You can’t move one without moving the other!

2. Traditional Economic Wisdom: Invest at the Top & Wealth Trickles Down Most community and economic development programs are built on one faulty premise: Investing in job creation will build the local economy and families will do better as the investment at the top trickles down Investing in job creation will build the local economy and families will do better as the investment at the top trickles down The persistence of low wages and economic instability in many places with full employment and worker shortages demonstrates that investment in jobs is sometimes not enough Some economic models show that investment in creating low-wage jobs can suppress a local economy

3. How can over-reliance on job creation and “work first” hurt? Forcing low-income workers to accept low-skill / low-wage jobs while ignoring barriers to employment can limit their ability to keep a job and attain skills needed to advance Trapping workers in low-skill jobs hurts the quality of the workforce & reduces business productivity and profitability This puts downward pressure on wages and reduces business competitiveness and stability Businesses that rely on low-wage labor are often forced to look overseas for even lower wage labor to compete Government costs go up as it is forced to provide more and more services for low-income families, increasing the tax burden

4. Workforce Quality Stagnates / Declines Business Productivity Suffers Business Profitability Decreases Businesses Close, Outsource, or Freeze / Reduce Wages Workers Have Less to Spend Service & Retail Sales Decrease Service / Retail Firms Close or Shed Jobs Government Receives Less Tax Revenue Government Invests Less in People, Services and Place Barriers Inhibit Work & Skill Training Ignore families and workers and… …the Economy Spirals Down

5. New Economic Wisdom: Invest in Workers and Wealth Gushes Up! If you invest in barrier reduction and job skills, you will improve business productivity and profitability If you increase productivity and profitability, businesses can pay more, they become more stable and they build stronger ties to the community Higher wages for families earning the least circulate in the community, create more jobs and a build a healthier community economy People already doing well do better in the long run because their businesses and employers thrive Communities prosper as higher incomes and increased community wealth boost tax receipts -- allowing them to do more with lower tax rates

6. Increasing Family Income: The Multiplier Effect Low income families spend about 70% of every new dollar they receive locally – –Percentage spent locally decreases as income increases – –Increasing income at the bottom contributes more to a local economy than increasing it at the top In 2006, each $37,000 in additional income received by low-income families in a community created one new job – –This includes benefits, transfer payments, tax-credits, and wages Small wage increases add up! – –$1.00 / hour for 19 FT workers = one new job – –$.50 / hour for 37 FT workers = one new job – –$.25 / hour for 74 FT workers = one new job

7. … the Economy Spirals Up Invest in workforce skills and reducing barriers and…

8. A Case in Point: The Tupelo Story 1950 – poorest region in poorest state in union Invested in the poorest people - increasing the value of their work and predictability of their income by helping them move from growing crops to raising pigs and chickens Better farm income boosted Main Street sales – and raised incomes for middle-class and wealthy residents too Continued to invest in people and their skills Local businesses prospered – outside businesses were attracted to the quality of their workforce By 1980’s the Tupelo region became one of the fastest growing / most prosperous areas in the south Many companies have been attracted by the quality of their workforce - including Toyota which build a new plant in 2007

9. So what does it take for both families and communities to do better? Enough jobs to go around Strategies include: Entrepreneurship programs and new business supports Business retention and expansion programs Sound advice on management, financial and technical issues Investment capital at reasonable terms Skilled, productive workers & stable families Strategies include: Effective K-12 and higher education systems Services and supports for families - transportation, childcare, etc. Worker training that meets employer needs Community support for both families & businesses!

10. Every family must somehow reach or surpass “The Line” Food Clothing Shelter Transportation Childcare Taxes Healthcare Entertainment, Gifts, Vacations Savings, Investments, Retirement Luxuries, Treats, Indulgences Anything and Everything Else “The Line”

11. It is how families reach the line and how much they surpass it that helps or hurts a local economy!

12. Remember - when families do better economically… …it helps in non-economic ways: Improves physical and mental health Improves community stability Creates an orientation towards the future Stimulates savings & development of assets Provides a foundation for taking sensible risks Increases social & political participation …and enhances the welfare of generations to come!