Atlanta is one of a growing number of local governments across the country that are doing economic development differently, with a focus on ensuring development brings high-quality jobs and benefits people from historically marginalized groups and neighborhoods. Traditionally, economic development authorities have provided financial incentives to companies to attract or retain them, with the aim of bringing jobs to their communities and growing the tax base. It’s a practice that has come under scrutiny, particularly at the height of Amazon’s HQ2 competition, with some questioning whether providing economic development incentives to corporations is the best use of taxpayer dollars. Atlanta is flipping the script, requiring companies to help build an inclusive local economy in order to qualify for those incentives.
The City of Atlanta funds the Economic Opportunity Fund (EOF) — where those incentive payments come from — through the legislative process. Invest Atlanta, the City’s economic development authority, manages the EOF on behalf of the City. In 2021, Invest Atlanta launched the Economic Empowerment and Equity (E3) Program, which requires companies seeking incentives from the EOF to deliver on job quality, workforce development, and equity commitments, rather than just focusing on the number of jobs they create.
Through its E3 Program, Atlanta is demonstrating one innovative way local governments can advance job quality and equity by leveraging policy, one of the five levers for change RFA has identified in its Job Quality Playbook. Atlanta’s not alone in this; Indianapolis, St. Louis, San Diego, and Wake County, North Carolina also leverage business incentives to encourage companies to create high-quality jobs and focus on equity, each with varying approaches.
The Origins of Atlanta’s E3 Program
The E3 Program emerged from Atlanta’s creation of a comprehensive economic mobility strategy for the city, informed by data analysis and community engagement to identify barriers to economic mobility facing people in disadvantaged neighborhoods, such as transportation barriers preventing them from getting to work. From that effort came the One Atlanta: Economic Mobility, Recovery and Resiliency Plan. The plan was recently updated to include additional priorities.
Bonika Wilson, Invest Atlanta’s former Chief Equity and Inclusion Officer, recounted how the E3 Program emerged out of this larger effort:
“We saw there were a lot of things that Invest Atlanta, as an economic development authority, doesn’t control. We can’t really control health care because we don’t have a direct impact. We can’t control transportation because we’re not MARTA. But we thought, what if there’s a way that we can indirectly impact those areas? That’s how the conversation about E3 started. How can we indirectly impact education, transportation, and health care by leveraging our strengths? From there we started thinking about companies that are moving to Atlanta. When we bring companies to Atlanta, [some] get incentives to come here. We thought they should have shared responsibility and accountability for closing economic gaps. Companies that are moving to Atlanta because of our diverse workforce or our technology innovation centers should also have a stake in the problems and solutions. And so that’s how the E3 Program started.”
How the E3 Program Works
Under Atlanta’s E3 Program, companies receiving EOF incentives must meet several requirements, including the following:
- Pay every incentivized job a minimum of $15 an hour,
- Offer health insurance benefits,
- Conduct an annual employee satisfaction survey, and
- Partner with the local workforce development system and with local universities and technical colleges to recruit jobseekers and students from historically marginalized populations.
In addition to meeting these requirements, companies participating in E3 must choose commitments they will deliver on. Companies that receive larger incentives must take on more commitments. Commitments can include providing paid leave and child care to employees, purchasing from small businesses in the city, and partnering with local organizations and educational institutions to provide paid work-based learning opportunities for Atlanta residents. Companies can meet commitments by having established company policies or undertaking new work. Invest Atlanta will be able to adapt the menu of commitments companies can choose from as strategies to advance equity change over time.
The Employer Response
Many companies have been enthusiastic about participating in E3 and delivering on their commitments, Bonika said, because E3 aligns with their company’s core values. Ten companies entered into E3 agreements in 2021, followed by another four companies in 2022.
Some companies have pushed back on the E3 Program though, citing the significant amount of work it would take to deliver on their commitments. Those companies may opt out of receiving incentive payments or may even move to other cities that don’t require job quality and equity commitments in exchange for incentives.
The Mayor’s office has stood strong in the face of this pushback, and this steadfast support has been crucial to E3 and Invest Atlanta’s efforts. The administration was adamant that the city would only use taxpayer dollars to attract companies that valued equity and were willing to take shared responsibility for closing the city’s economic gaps, Bonika recalled. The new mayoral administration under Andre Dickens continues to support E3, with a renewed focus on using it to create opportunity for young Atlantans.
Bonika recognizes the E3 Program is unique in the economic development sphere, and other economic development authorities have reached out to learn more about Invest Atlanta’s work on equity. “I think there is still so much work to be done to ensure people are looking at equity in economic development. For so long, practitioners in the economic development space have been looking at job growth and whether people have jobs, but is it a good job?”
Invest Atlanta, along with a growing number of economic development entities across the country, is working to make sure the answer to that question is “yes.”
This is a part of our blog series on job quality. Read the previous blogs:
- Worker Empowerment Is Important for Job Quality. It’s Also Good for Business
- How to Make a Better Job: Our New Blog Series
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