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Store Closing
A United Methodist Insight Exclusive
One of the most important sayings in business is “you can’t improve what you don’t measure.” This anonymous quote explains why the American economy is weak and crime, unemployment, and poverty are major problems throughout the country. Politicians recognize that all politics is local. However, they ignore the fact that public policy solutions to chronic social problems must be based on local employment statistics. These statistics are key as well to The United Methodist Church, which not only is seeking to sustain its churches but also lists working with impoverished people as one of its primary mission goals.
Federal, state and local government policies have failed because they are based on national economic models that define a community where 100 people make $1 million a year and 1,000 destitute people make $0 a year as a thriving neighborhood (because the average annual salary of the 1,100 residents is $90,909.) This faulty economic analysis has allowed government to largely ignore the employment needs of people struggling in economically challenged neighborhoods. This results in social problems plaguing communities where unemployment is rampant. Churches in such neighborhoods may be victims of crime or they can become genuine beacons of hope by working on behalf of more equitable local economies.
The quickest way to turn a community around is to ensure that a majority of residents have a living wage job (where an individual earns sufficient money to cover basic living expenses). When these jobs are plentiful chronic problems like crime, low graduation rates, poverty and poor healthcare disappear. Tragically, living wage jobs are vanishing in local communities because the small and independent businesses providing these jobs are under assault in America.
Government policies have ensured that the large businesses that are supposedly “too big to fail” increase profit margins. Mega-businesses like the major banks, oil companies and big-box stores are being given unfair financial gifts that have provided them with a significant competitive advantage over the small independent businesses that provide living wage jobs to most local residents. Economists have ignored the fact that local businesses that hire most people in America are “too small to fail.” In other words, they're far more important to a healthy economy than giant corporations. The small size and entrepreneurial nature of these companies motivates them to take the risk of hiring local residents (who historically have been the backbone of the American workforce and economic system).
Unfortunately, because local employment trends are rarely measured, politicians are not held accountable for the loss of living wage jobs resulting from the closing of small businesses. Thousands of local businesses are dying in secret across the country. It is therefore essential that every municipality in America utilize a simple measure of free-market living wage employment that holds local, county, state and national politicians accountable for the closing of small businesses and the loss of local jobs. This simple measure is called the “Living Wage IndexTM” or “LWI” because it quantifies the percentage of people holding jobs that enable them to pay their bills.
The simple equation for the LWI is: L / W where “L” represents the number of people in living wage jobs in the target community and “W” represents the total number of people of working age in the target community. Wall Street is driven by measures like the Dow Jones Industrial Average (DJIA) and quarterly corporate reporting. Federal government policy is guided by aggregate indicators like national unemployment, the Consumer Price Index (CPI) and housing starts. If utilized to measure municipal employment trends the Living Wage Index will force political and business leaders to advocate for policies that would strengthen small business and rapidly increase local living wage employment.
The best way to save local businesses, transform poor communities and revive the national economy is to rely on the Living Wage Index to influence politicians to develop community programs like a “Shop Local Create JobsTM” campaign. Churches can be catalysts for this kind of campaign by opening their buildings to community group meetings and encouraging members to shop locally and monitor local economic indicators. This type of effort would have the benefit of increasing living wage employment, saving those businesses who are truly too small to fail and increasing the social impact of the United Methodist Church.
Dale G. Caldwell is the author of “Intelligent Influence: The 4 Steps of Highly Successful Leaders and Organizations.” He founded the nonprofit Work for Peace, Inc. (WFP) to reduce poverty by increasing free-market employment around the world. Email him at dalegcaldwell@aol.com