ADOT has begun work to improve Mariposa Road between the border and Interstate 19. Property owners are seeking new building permits for warehouses in the trade corridor, and the City of Nogales is moving to annex land north of town along the interstate.
All of it comes in anticipation that the renovated Mariposa Port of Entry, when completed sometime next year, will mean a boom in economic activity.
But as the city licks its chops over the tax revenue that will accompany a surge in development, local leaders should also be taking a hard look at how new development can address Nogales’ serious poverty problem.
According to U.S. Census figures, approximately 34 percent of city residents are living below the poverty level, more than twice the state figure of 16 percent. The median household income in the city is $28,843, compared to $50,752 for the state. In a sign of how acute the problem of poverty is among local children, the Nogales Unified School District recently began offering free meals to all of its students in order to reduce the stigma of participating in a free lunch program for which 87 percent of students were already eligible.
Nogales also has a big unemployment problem – the latest available state figures showed that Santa Cruz County’s jobless rate in August was 20.4 percent, the highest it had been since 1999. But a job isn’t an automatic ticket out of poverty. A study released last week by the University of California-Berkeley’s Labor Center found that 73 percent of enrollments in America’s major public benefits programs are from working families.
According to the report, titled “Fast Food, Poverty Wages: The Public Cost of Low-Wage Jobs in the Fast-Food Industry,” 52 percent of the families of front-line fast food workers and 30 percent of the families of retail trade employees are enrolled in one or more public programs, compared to 25 percent of the workforce as a whole.
The fast food and retail sectors, of course, are big employers in Nogales. The largest local employment sector, produce distribution, was not included in the study. But we know that the seasonal nature of produce warehouse work can mean hard times in the off-season for employees, many of whom have to turn to public assistance.
In other words, new economic development and growth are not solutions to poverty in and of themselves, especially if the opportunities they create for poor people are low-wage, non-benefit or seasonal jobs.
In a recent online commentary for the New York Times, Nobel laureate in economics Joseph E. Stiglitz wrote about growing wealth inequality around the world (“Inequality is a choice,” Oct. 13). Countries such as Chile, Turkey and Hungary have managed to significantly reduce income inequality, he wrote, “suggesting that inequality is a product of political and not merely macroeconomic forces.”
Stiglitz also singled out the United States for having “some of the worst disparities in incomes and opportunities, with devastating macroeconomic consequences,” citing figures showing that 95 percent of all income gains since 2009 have gone to the top 1 percent. “The typical American man makes less than he did 45 years ago (after adjusting for inflation); men who graduated from high school but don’t have four-year college degrees make almost 40 percent less than they did four decades ago,” he wrote.
Stiglitz sees a world divided not only by inequality, “but also between those countries that do nothing about it, and those that do.”
At the community level, people should take a hard look at issues of equality, especially when preparing for growth. In the case of Nogales, we should ask whether economic activity spurred by the upgraded commercial port of entry will simply bring more opportunity for the haves and more of the same for the have-nots, or if it will help lift people out of poverty and working poverty.
The expansion of the local community college and University of Arizona branch is certainly a step in the right direction, since a skilled workforce will make the area more attractive to employers with good-paying, benefits-eligible jobs. Efforts to attract so-called “value-added manufacturing” to town are helpful as well, especially if it means better opportunities for low-skill workers.
But what else can we do? Could the port authority serve as a mentor organization for aspiring small business owners, and help identify new port-related entrepreneurial opportunities for people who want to get a foot in the door? And could that effort operate in tandem with outreach from local development-minded NGOs to connect aspiring entrepreneurs with microcredit programs? Meanwhile, could the city and county team up with the community college to create a local small business advisory center?
If, to paraphrase Stiglitz, our community wants to be among those that do something about inequality, the problem of poverty should be a key component in the discussion of local economic growth. At the very least, it’s worthy of a study session or two at the city and county governments.
(Clark is managing editor of the Nogales International.)