Why Business Must Fight Detroit’s Poverty in COVID-19

By Louis E. James

It’s no secret that poverty negatively impacts our community.  Even more daunting, the effects of poverty have the greatest impact on the lives of children.  These effects can follow them into adulthood and lead to chronic illness, a lack of a good education and consequently the ability to work.  In many communities this has created a vicious cycle as unemployment and the lack of basic services and income lead to poor education and malnutrition.  Chief among the causes of poverty are little or no access to livelihoods or jobs, inequality and poor education.

These are difficult times for many in the black community and with recent news headlines, circumstances will only get worse before they get better.  In Detroit, the poverty rate has dropped for the past three years from nearly 40% to 35%.  Despite this marginal progress and Detroit’s current economic recovery, the poverty rate is still three times the national average with the poverty rate for children topping 50%. Clearly, the impoverished are not keeping pace with the city’s recovery. Detroit still remains the poorest large city in the nation.

While any solution is complex, businesses have a duty to take an active role in the reduction of poverty. This should not be regarded as social welfare, but instead corporate social investment in the local community it serves.  We can help alleviate poverty by stimulating entrepreneurship that services and provides opportunities for others in the community.

Businesses can and should play a successful role in addressing poverty by working diligently to increase productivity and real income for the poor.  As business owners, we are uniquely positioned to enhance job opportunities through direct employment and the mentoring of those who seek to be self-employed.  We should also pay decent salaries, lending to the support of healthy communities which, in turn, is good for business.

Businesses have a role in serving the poor.  Business leaders should seek to participate in the dialogue and become actively engaged in reducing poverty.  Private sector individuals and organizations can seek solutions that go well beyond tokenism.  In particular, black business owners have a duty to serve the community by providing training and opportunity in the form of jobs, earning a decent wage that allows employees to take care of their families.

But this is not the responsibility of business alone. The challenge is not easy.  Jobs are just one factor that can work to alleviate poverty. Many also need assistance with transportation and childcare which are two impediments to job preparedness. Alleviating poverty is an important issue that requires a well thought out plan and collective action of both local government and business.  Participation in public/private partnerships and supporting organizations, programs and initiatives that directly address the issues will help lift families out of poverty.

This includes programs like those offered by the city like the Detroit at Work initiative to work hand-in-hand with the private sector to train citizens for jobs like truck driving, tree trimming, the construction trades and jobs in the healthcare industry.  This initiative is important in offering skills that will help citizens acquire the ability to qualify for quality jobs. Working with the private sector ensures that there are jobs to go to once the skills have been acquired.  It can also serve as a pipeline for qualified candidates.

Banks can play a role in fostering entrepreneurship in the community by offering microloans – small short-term loans with flexible repayment schedules – to those interested in starting their own businesses, but who may not qualify for conventional loans.  Entrepreneurship is an effective strategy for poverty reduction and employment creation.  Business can play a significant role by mentoring new entrepreneurs, which can expose them to strategies and tactics on how to run successful businesses.

With entrepreneurship, comes the important role of women as well as the impact poverty has on them and their families.  That is why we must support efforts to create more women entrepreneurs. Directly helping women can also have a huge economic impact on the community. Providing women with economic opportunities ensures that they have enough money for food, healthcare, education and other benefits for their families.  This goes a long way toward making sure that children who would be the leaders of our communities have better opportunities to grow into healthy, educated, competent and productive adults.

As we know, the challenge is not easy especially in this coronavirus crisis; a job is just one factor that can work to alleviate poverty.  It is important that we understand the needs of poor Detroiters and put programs in place to wrap-around our most vulnerable population advancing their success and ability to arrive at the job mentally prepared to work.

We are our brother’s keeper.  This is not work that we can just leave to the government and human service organizations.  Business at all levels in Detroit can play a key role and the business community must step up to ensure access to jobs for everyone who wants to work.

Louis E. James is the president and CEO of SEEL, an energy efficiency program management company, considered the largest minority owned energy efficiency entity in the nation.