November 14, 2008

Commentary:

Targeting Economic Recovery Efforts in Latino San Diego

By Vince Vasquez

On Election Day, the citizens of Chula Vista, National City and San Diego voted in new City Council members, which will have to be prepared to rapidly respond to our challenging economic times once they are officially sworn into office. Taking a closer look at recent unemployment trends reveals that job creation in Latino neighborhoods should be high on their priority action list.

According to the most recent estimates from the federal government, our nation has experienced a 30% unemployment rate increase over the last twelve months. Most of the heaviest losses have been in production-related jobs (butchers/garment workers), maintenance work (landscaping/house keeping), and the construction industry (cement masons/drywall installers), all areas where Latinos are heavily employed across the country. As a result, the national Latino unemployment rate has disproportionately risen 37% in the last year, higher than both the overall national rate change and the change in White unemployment (29%). These “big picture” trends are mirrored in San Diego County, where more than 25,000 residents have been added to the unemployment list since September 2007. Layoffs of construction and retail workers have soared highest, hurting Hispanic families: according to state labor statistics, the Latino workforce in San Diego County is concentrated primarily in construction and service occupations.

It’s clear that a new economic stimulus package is sorely needed in Latino San Diego that will create jobs and help families recover from hard economic times. However, many municipal governments are now struggling with multi-million dollar budget deficits that make new funding for new programs hard to come by. For example, the City of San Diego now faces a $43 million budget deficit, which may require public libraries and recreation centers to slash their operating hours and even close. If an effective pro-jobs strategy can be put together that doesn’t require lots of public funding, we may see our newly elected officials supporting a community consensus to retain and create jobs where they’re needed most. To begin the dialogue, three key policy changes should be reviewed:

1) Expanding Local Vendor Access to City Government Contracts. Public work is a great source of economic opportunity for local and small businesses; earlier this spring, government officials identified more than $80 million in existing purchase agreements awarded by the City of San Diego. Millions more are given to private firms for additional service contracts such as window cleaning and landscaping at public facilities. Currently, few cities in San Diego County have effective laws in place that give strong merit to bids from small and local vendors for contract work, which stands in contrast to most big cities such as San Jose and San Francisco, which give deep discounts. Mayors and City Council members can ensure that local and small businesses will get their fair share in the future by enhancing local preference policies for city contracts, weighing the bids of local vendors and small contractors more in their favor, rather than out-of-state companies.

2) Reform Construction Project Policies for Minority-Owned Contractors. The City of San Diego has historically stumbled in its efforts to improve the fair distribution of public construction projects, which has been a black eye in our community. This September, it was revealed at City Hall that of the $116 million in major city construction contracts awarded from July 2007 to March 2008, only 1.6% went to Hispanic-owned firms. City officials are now demanding action and taking steps in the right direction that will improve diversity outreach, which should spur every city in San Diego County to review their contracting policies. To promote greater access to projects for women and minority-owned firms, city leaders should consider reducing regulatory barriers to competition, including breaking up big contracts and limiting insurance requirements, and improve contract monitoring and legal compliance.

3) Target Job Creation in the Inner-City Neighborhoods. One exciting development that has the potential to soften the impacts of our economic downturn is the success of our local “enterprise zone,” (EZ) which targets special state government benefits for businesses located within a limited economically-distressed area. San Diego’s enterprise zone stretches across 36,000 acres, reaching major Latino neighborhoods that need additional investments and job opportunities: Barrio Logan, Sherman Heights, San Ysidro, and the west side of National City and Chula Vista. Most importantly, lucrative “hiring credit vouchers” can be awarded to EZ business owners who hire disadvantaged workers, including those on unemployment, and residents of the enterprise zone. San Diego leaders should identify best practices to boost enrollment for hiring vouchers, and protect the funding and staffing levels of EZ coordinator offices, so gains will not be lost during the fiscal budget crunch.

As we confront our nation’s greatest economic challenge in more than a generation, we will look to our elected leaders to pave a path to recovery and future prosperity. Mayors and city councilmen and women throughout San Diego County can help us weather this storm, if we give them the public support and new ideas to make happen.

Vince Vasquez is the senior policy analyst at the San Diego Institute for Policy Research.

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