Equitable Development and the Twenty-First Century Company Town

Alabama company mining town
Alabama company mining town

By Skeo Solutions

Our company has seen firsthand the disastrous consequences that occur when financial gain is divorced from environmental and social considerations.  Nowhere are these consequences more tragic than in former company towns that have gone bust – places created to concentrate workers on a singular economic enterprise, but are now landscapes of abandoned assets, economic atrophy and poisoned land and water.  They include mining towns in the West and Appalachia, lumber towns in the Northwest, textile villages in New England and the Southeast, steel towns in the Rust Belt, and motor cities in the Midwest. These places struggle with the aftermath of environmental contamination, economic disinvestment and frayed social fabrics. More than anything, these communities are looking for new ways to build a secure and sustainable future.

21st Century hindsight:  Connected people and places

Starting in the 1860s, company towns sprung up across America, peaking at 2,500 in the 1930s. Some company towns were exploitive, where the boss owned the workers “heart, soul, skin and guts.” Other company towns were utopian, investing in social institutions such as schools, libraries and hospitals.

In 2013, it’s easy to think of the classic company town as an historical relic. But more than ever – with globalization, rapid advances in information technology, mass consumption and the long reach of transnational corporations – we live in a world that is shaped, for better or worse, by business priorities. In the 1860s and even the 1950s, we didn’t have the information to understand the interrelatedness of economic activities and the health of people and ecosystems. In the 21st century, through science and shared stories, we know better.

We know that pollutants from a chemical plant in one state can form ozone that can impact a whole region, and that pollutants from a single coal-fired plant can contribute to climate change that affects the global ecosystem. We know that pesticides used on a farm located on one continent affects consumers living in another. We also know that these environmental externalities not only affect the health and well-being of current residents, they can have profound negative impacts on human, social, physical, and natural capital that can last for generations. This dramatically diminishes the ability of individuals, communities and even entire regions to contribute positively to a struggling global economy.

No equity, no sustainability

Over the past 30 years, corporations and businesses have increasingly embraced sustainability principles and materials management to reduce their impacts on the environment. But even as we’ve gained traction on the environmental front, social equity issues have lagged behind. In 2012, 15 percent of the U.S. population – approximately 46.5 million people – live at or below the poverty line.  According to a 2013 study by economists from the University of California, Berkeley, the Paris School of Economics and Oxford University, the income gap in the United States has reached its widest point since 1928, the year before the stock market crash. And poverty is encroaching on historic middle class havens. During the 2000s, poverty grew twice as fast in suburban regions as in cities and rural counties according to a recent study released by the Brookings Institution’s Metropolitan Policy Program.

Dramatic economic inequity and the lack of access to all forms of capital in these communities is bad for the environment, society and the economy. Income inequality and entrenched poverty keeps us mired in a “jobs vs. environment” vicious circle where lack of jobs justifies the need for harmful economic activities that deplete natural capital and lead to impoverished communities desperately needing new jobs at whatever environmental and social price.

Creative disruption: Equitable development and environmental justice

Although the traditional sentiment has been that environmental justice is a disruption to business, it has become a strong force for disruptive innovations and holistic thinking. Through collaboration with communities, companies are eliminating wasteful inefficiencies and costly externalities.

Our company has found that communities struggling with disproportionate environmental burdens and social disinvestment are places that are forging new business paradigms. They are reclaiming blighted and contaminated sites for new uses, creating robust public-private collaborations, and training the next generation of workers in sustainable technologies and practices. For example, with support from U.S. EPA’s Superfund Redevelopment Initiative, communities have put more than 600 cleaned-up Superfund sites back into a wide range of commercial, recreational and social uses. Studies in 2003 and 2012 reviewed impacts at 25 of these sites and found significant economic value for local communities, including new businesses, jobs and increased property values. In Atlanta, Georgia, STAND-UP, a community think tank, and the North Georgia Building & Construction Trades Council, has developed apprenticeships in green building and the construction industry. Many other green jobs initiatives are taking off around the country.

In our era, industries and businesses rush to stay relevant in a rapidly changing world driven by new technologies, policies, trade agreements, demographic shifts, and environmental change, including global warming. On the government front, the White House recently proposed Manufacturing Innovation Institutes to restore American manufacturing after the industry’s downward slide over the past decades. But as one business writer in Fast Company magazine observed about the current business frontier, “From the rise of Facebook to the fall of Blockbuster from the downgrading of U.S. government debt to the resurgence of Brazil, predicting what will happen next has gotten exponentially harder.”  Whatever the business climate, we need to approach economic development with a different mindset – one that values environmental and social well-being as prerequisites to long-term profitability. If the country is to move forward sustainably, we also need to deepen our investments in people who have been historically marginalized.

The Twenty-First Century company town

Just as we now readily acknowledge that pollution in one area of the world impacts the entire global ecosystem, we must also acknowledge that we live in the 21st century version of the company town, a global economic and corporate village, and that our economic futures are all connected. We must move beyond just acknowledgement, outrage, and the moral arguments for corporate social responsibility. We must understand the ultimate consequence of environmental injustice and the subsequent depletion of human, social, physical, and natural capital is lost market opportunities and a permanently stagnant global economy.

True economic prosperity and environmental sustainability will require that we design business and economic models going forward that focus on industrial practices that get as close to a zero waste model as is practical. Equally important will be creating businesses and economic systems that are rooted in supporting the highest and best future for every child, every person, and every place to be able to productively contribute to building a strong, healthy, vibrant global economy. Over the past decade, we have seen businesses focused on waste reduction and environmental sustainability enjoy significant strategic advantage and prosper. In the coming decades, strategic advantage and success will come to those businesses that embrace the need to address inequity as part of their core business mission and take bold steps to meet the challenge.

Image credit: Library of Congress

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