Generate Community Wealth

Minneapolis has one of the largest racial income and wealth gaps in the nation. These gaps come from decades of economic policies that guaranteed wealth stayed with a small group of people. Many white families in our city have been able to build wealth and assets over decades and generations, while low-wealth and, people of color and Indigenous (POCI) communities have been excluded.

Background

  • From 2009-2013, 36.9% of Minneapolis households earned under $35,000 per year
  • In Minneapolis, since 2000, the median household income dropped from $34,834 to $19,500 for Black families, from $34,828 to $21,847 for Indigenous families
  • While communities of color represent about 22% of the Twin Cities metro’s population, businesses owned by POCI represent just 7% of all employer firms
  • 59% of white households in Minneapolis own their home, while only 24% of POCI households own their home
  • During the period leading up to the great recession, high-wealth black residents were 3.8 times more likely to receive subprime loans for home purchases than very low-wealth whites
  • In Minnesota, a typical payday loan of $380 has an interest rate of 273%
  • Between 2005 and 2014, there were 5,550 violations of the Fair Labor Standards Act in Minneapolis, totaling over $2.7 million in unpaid wages
  • Minneapolis residents spend $570 million per year on electricity and gas—investing in clean energy, and efficiency and conservation programs could save us $250 million annually

Vision and Priorities

Generating Community Wealth is a transformational approach that focuses on creating local- and community-based ownership of the economy and utilizing city resources to create a supportive ecosystem for these enterprises to thrive. It is an intersectional economic development strategy rooted in social, racial, and economic justice.

  1. Build an economy that creates access to wealth and empowers local communities
    • Create local- and shared-ownership of small business by scaling workers cooperative models and partnering with anchor institutions like the University of Minnesota
    • Build wealth through homeownership by funding community land trusts, housing cooperatives, and pathway to homeownership programs
    • Utilize zoning codes to allow for more light commercial spaces in neighborhood interiors and small storefront spaces
  2. End practices that exploit low-wealth and POCI communities
    • Prevent predatory lending practices and provide alternatives to payday lending services
    • Strengthen wage theft enforcement and hold violators accountable
    • Combat modern day redlining in both the insurance and mortgage industries
  3. Protect Minneapolis workers
    • Implement the recent minimum wage increase and paid sick and safe time ordinances
    • Expand protections for Minneapolis workers, including passing a fair scheduling ordinance
    • Support the efforts of all workers to unionize and collectively bargain

Action

  1. Expand and invest in cooperatively owned enterprises: Worker cooperatives provide employees with higher wages, opportunities to build wealth through shared ownership, and create businesses that are grounded in communities. By expanding funding for existing cooperative technical assistance programs, and learning from programs in cities like New York City and Cleveland, we can scale worker-owned enterprises, create a supportive environment for them to thrive, and connect them to our city’s multiple anchor institutions.
  2. Limit payday lending interest rates: Currently, payday lenders in Minneapolis charge, on average, 273% interest. These loans perpetuate cycles of debt for low-wealth residents. I will partner with leaders at the county- and state-level to institute a 36% cap on payday lending interest rates.
  3. Implement stronger wage theft prevention practices: To ensure Minneapolis workers are receiving all their entitled compensation, we need to invest in community organizations that educate workers on wage theft. We need to use business licensing to ensure labor standards, protect workers who pursue back pay from retaliation, and hold companies accountable for the practices of businesses they contract with.
  4. Increase outreach and support for the Small Business Navigator Office: The city of Minneapolis already provides programs to support prospective small business owners. However, public awareness of these programs is lacking—we need to increase our outreach for existing programs in Minneapolis which empower entrepreneurs.
  5. Pass a fair scheduling ordinance: The growth in part-time and on-demand employment has increased insecurity for workers. When workers cannot predict their hours and pay each week, it becomes difficult to make time for their families, education, and other jobs. Minneapolis must pass a fair-scheduling ordinance which will require employers to provide employees with work schedules at least two weeks in advance, and deters practices like clopening—when an employee work two shifts within 10 hours of each other.
  6. Support credit unions and alternative banking options in their outreach efforts: The city should increase efforts to support local credit unions and community development financial institutions (CDFIs). Creating and expanding safe checking accounts for low-wealth residents and providing financial literacy education programs will empower people to utilize alternative banking options.
  7. Invest in quality green jobs: Green job growth doubled traditional job growth since the 2008 recession. Median wages in the green economy are 13% higher than US median wages. We must invest in green jobs by opening a training center in Minneapolis to provide training and form pathways to employment in partnership with clean energy companies. These programs should prioritize recruitment of low-wage and POCI workers.
  8. Create pathways to homeownership: Limited-equity cooperatives and community land trusts create pathways to wealth for families through homeownership, protect naturally occurring affordable housing, and preserve affordability. Additionally, I will continue to invest in the city’s homeownership programs.
  9. Promote small storefront and light commercial space: Minneapolis must incentivize street-level commercial space in new development projects for small storefronts and locally-owned businesses. Small storefronts promote foot traffic, shift neighborhood culture, and improve public safety.
  10. Ensure fair implementation of $15 minimum wage and the earned sick and safe time ordinance: We must fully fund the Labor Standards Enforcement Division (LSED) which is responsible for implementing the minimum wage increase and paid sick and safe time ordinances.
  11. Adopt inclusive financing programs for residential energy programs: A mechanism to adopt energy burdens for low-wealth renters and homeowners to participate in energy efficiency and clean energy programs without upfront cost, a loan from the bank, home ownership, or a good credit score.

Works Consulted

Abell, Hillary. “Worker Cooperatives: Pathways to Scale.” The Democracy Collaborative, June 2014.

Alperovitz, Gal, Thad Williamson, and Ted Howard. “The Cleveland Model.” The Nation, 11 September 2010.

Camou, Michelle. “How Urban Governments are Promoting Worker Co-ops.” Grassroots Economic Organizing, 10 October 2016.

Chaduvula, Raju. “University of Minnesota student takes on payday lending.” Minnesota Daily. 4 May 2017.

City of Minneapolis: Community Planning and Economic Development. City Council Study Session: Housing Stability [PowerPoint]. City of Minneapolis, 2017.

“Confronting Exploitation: The Face of Low-Wage Work in the Twin Cities.” Centro de Trabajadores Unidos en la Lucha, October 2015.

Energy Vision Advisory Committee. “Funding the Minneapolis Clean Energy Partnership.” City of Minneapolis, 2017. Report.

“Enforcement of a $15 Minimum Wage in Minneapolis Requires Strategic Community Partnerships” National Employment Law Project, August 2017.

Kaul, Greta. “When it comes to the number of minority-owned businesses, the Twin Cities are decidedly not above average”. MinnPost, 13 September 2016.

“Our Time Counts.” Minnesota Neighborhoods Organizing for Change, Center for Popular Democracy. July 2015.

Thaden, Emily. “Stable Home Ownership in a Turbulent Economy.” Lincoln Institute of Land Policy. July 2011.

“Twin Cities in Crisis: Unequal Treatment of Communities of Color in Mortgage Lending”. Institute on Metropolitan Opportunity. April 2014.