Thursday, June 4, 2015

Sustainable Development — Economy, Ecology and Equity

By Jim Vaughan, Senior Fellow 

When I was president of the Chattanooga Area Chamber in the 1990s, our chamber, economic development organization, community leaders and elected officials developed a community growth strategy based on sustainable development. 

Sustainability was a new term for cities and my friend and city councilman Dave Crockett, an early leader in the movement, helped position Chattanooga as a national leader among sustainable cities. 

In 1994, we hosted the first national meeting of the President’s Council on Sustainable Development where Vice President Al Gore called Chattanooga “an environmental success story, not only for the United States, but for the world.” 

As a native Tennessean, Gore’s declaration could be viewed as a play to the home folks except that Chattanooga was making quite a name for itself— 

  •  It cleaned up its air, meeting all federal standards, just 20 years after legendary CBS News anchor Walter Cronkite said Chattanooga had the worst air quality in America; 
  • It engaged thousands of citizens in a public planning process to envision Chattanooga as the “best mid-sized city in America” and attracted the public and private resources to realize its dreams; 
  • It constructed the Tennessee Riverpark—walking and biking trails along the Tennessee River, six fishing piers, public art throughout, and including active and passive destination parks; and 
  • It opened the world’s first and largest freshwater aquarium in 1992 as the lynchpin of the transformation of the city’s downtown. 

Fast forward 21 years and today, almost every leading city in America has embraced sustainability and is committed to prosper with a stronger economy and through environmental excellence. 


But sustainable development includes three elements—economy, ecology and equity. How are we doing on the equity front? 

Not so good. 

Between 2000 and 2013 every state has seen its share of middle-class families shrink, according to a Pew Charitable Trust report. 

The current federal minimum wage, $7.25 per hour, has not been increased since 2009. And even though 29 states have minimum wages above the federal minimum, none would qualify as a “living wage” which is typically $10.00-$14.00 per hour. 

Workers aren’t benefiting from their increased productivity. From 1948 to 1979, net productivity rose 108.1 percent, and hourly compensation increased 93.4 percent. But from 1979 to 2013, according to Economic Policy Institute, while productivity rose 64.9 percent, hourly compensation rose only 8.0 percent. 

Sociologist Tali Kristal has documented that the share of revenues going to wages and benefits in manufacturing has declined by 14 percent since 1970, while the share going to profits has correspondingly increased. 

CEO-to-worker pay-ratio was 20-to-1 40 years ago, according to the AFL-CIO. Today it’s 354-to-1

Scientific American, in a March 31, 2015 article, “Economic Inequality: It’s Far Worse Than You Think,” paints a pretty bleak picture of America in the 21st century when it says, “We may not want to believe it, but the United States is now the most unequal of all Western nations.” 

The article also references an infographic video on wealth income inequality in America that went viral and has been watched more than 16 million times. It’s worth looking at right now. 


More than 100 years ago, Henry Ford roughly doubled his workers’ wages to $5.00 a day. “No one loses anything by raising wages as soon as he is able,” Ford said. “Low wages are the most costly any employer can pay.” 

“The new wage rate set off seismic shifts in American society,” wrote John Galagher in the Detroit Free Press. “A tidal influx of job candidates from the South and around the world flowed into Detroit. Factory jobs became prized, helping turn America into the world’s industrial colossus.” 

In 2015, Walmart raised its minimum wage to $9.00 per hour. Hardly a seismic shift, but the world’s largest retailer is running television ads to say they are “investing in the most important part of our company, our people, because a raise in pay raises us all.”
President Obama has called economic inequality “the defining challenge of our time.” But even if it is just one of the defining challenges we face, it’s time for chambers and economic development organizations to remember that sustainable development is about economy, ecology and equity.