NPR Story
4:53 pm
Thu January 9, 2014

Obama Picks 'Promise Zones' To Fight Poverty

Originally published on Tue January 14, 2014 5:13 pm

The Obama administration has designated five regions around the country as “promise zones” — areas where the administration will focus on closing the gap between rich and poor by creating jobs and strengthening existing poverty-cutting programs.

This comes 50 years after President Lyndon Johnson declared an “unconditional war on poverty.”

Derek Thompson, business editor for The Atlantic, joins Here & Now’s Robin Young to explain how “promise zones” work.

Guest

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Transcript

ROBIN YOUNG, HOST:

It's HERE AND NOW.

President Obama is marking the 50th anniversary of President Lyndon Johnson's war on poverty today with a pledge to put a new focus on narrowing the gap between rich and poor in America by pushing to raise the minimum wage and creating Promise Zones. The president picked five areas as the first Promise Zones: San Antonio, Philadelphia, Los Angeles, southeastern Kentucky and the Choctaw Nation in Oklahoma. He's expected to announce 15 more during the next three years.

Derek Thompson is the business editor with The Atlantic. He joins us from the NPR studios in New York. And, Derek, we see an interesting mix: urban, rural, tribal regions. Communities that are said to have good track records of working collaboratively are one of the reasons they were picked. But why is this proposal to have these Promise Zones? What makes it different from any other government help?

DEREK THOMPSON: Income inequality is the cause of the year, but it's a really complicated problem. It's a stew with a million ingredients. And so one of the administration's strategies here is to combat it with promises to these areas of direct federal assistance in specific cities to not only help them, but also establish, I think, a model of federal involvement that isn't overweening, but works with local governments and local businesses to say, what are your biggest problems? And how can we answer them with specific grants and tax incentives? So why these communities, you ask?

YOUNG: Mm-hmm.

THOMPSON: Well, the White House and some outlets are saying that these are the areas worst hit by the recession. But that's not necessarily true. San Antonio, for example, has actually been pretty resilient following the housing bust, since it never really had a housing boom. And so what you really see here is actually what you said, a diverse range of low-income areas across red and blue states that span the urban-rural tribal regions, but above all, are willing participants. These are communities that are saying, yes, we're willing to work with this administration.

YOUNG: Well, you mentioned they span, you know, red and blue states. Mitch McConnell, top Republican in the Senate, also from Kentucky, is praising the program. It's going to be in effect in his state. And we understand that it's going to offer states help navigating programs that already exist and offer - I mean, you mentioned tax incentives and funding, but also direct contact with the federal government.

THOMPSON: Right. These cities and communities have specific goals, like, say, raising high school graduation rates or reducing crime. And then they can work with the government agencies dedicated to these sectors to green light and expedite federal funding to reach these communities to solve them.

So, an example. Let's say you want to improve housing stock for low-income families. Fine. A region can apply for a housing and urban development grant to get private real estate investors to build high - neighborhoods in high-poverty areas. And then the president's plan also includes these credits for hiring workers and tax write-offs for capital investments for actual businesses to get involved in this.

So, you know, one way to think of it is that you have a push and a pull. You're pushing money into these communities with grants, but then you're also pulling private sector help through the use of these tax incentives.

YOUNG: And, Derek, one last thing: The Atlantic recently published a story, looking at factors most likely to help poor children move ahead. What were they?

THOMPSON: Right. We recently ran a piece that looked at the three factors most closely related to upward mobility, and they are: local income growth, number one, a high share of two-parent households, number two, and local spending, particularly on schools. So do these Promise Zones address these issues? Well, I'd say they do. The government isn't in the business of telling people to get and stay married, so we'll cross number two off the list. But these strategies are clearly geared towards getting money into low-income areas to help schools, and particularly lead - to get businesses involved through the use of both these grants and these incentives, to say we're willing to give you a little bit of extra money, push the table a little bit in your direction if you're willing to invest specifically in low-income, high-poverty areas.

YOUNG: And, of course, the other piece of the president's plan: pay the people in these areas more by trying to increase the minimum wage. Derek Thompson, The Atlantic's business editor, thanks as always.

THOMPSON: Thank you.

YOUNG: And you are listening to HERE AND NOW. Transcript provided by NPR, Copyright NPR.

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