Giving Compass' Take:
- Experts at the RAND Corporation discuss the need to update the methods used for assessing whether or not to invest in a project so that underserved communities can receive funding to improve infrastructure.
- What changes can be made to cost-benefit and risk analyses to ensure that small and poor communities receive funding equitably? How can COVID-19 recovery efforts intentionally utilize a racial equity lens?
- Read more about fostering equity in infrastructure jobs.
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The American Jobs Plan and the American Families Plan propose to address racial inequities through significant infrastructure, workforce, education, and child care investments. These kinds of targeted investments could address historic discriminatory practices and disinvestment in communities. Successfully implementing these plans to achieve equitable outcomes, however, may depend on purposeful steps around longstanding policies and procedures that have led to differences in access to opportunity and resources.
The American Jobs Plan identifies multiple types of historically underserved organizations or communities where these investments will be targeted. For instance, 15 decarbonized hydrogen demonstration projects are proposed to be sited in distressed communities. A Community Revitalization Fund is proposed to close gaps in access to the innovation economy for disinvested communities of color and rural communities. Half of the $40 billion proposed for upgrading research infrastructure will be reserved for historically Black Colleges and Universities (HBCUs) and other Minority Serving Institutions (MSIs).
Similarly, the American Families Plan aims to close equity gaps with investments directed at making college more affordable for low- and middle-income families, including students at HBCUs and other MSIs. Additional investments aim to strengthen completion and retention rates at colleges serving students from disadvantaged communities.
Identifying target groups is necessary, but may not be sufficient. Multiple barriers may need to be addressed for the funds to reach their intended destination. Unfortunately, the process of applying for and receiving federal funds is much more difficult for underserved communities than for others. Many infrastructure projects require a benefit-cost analysis, which has a built-in bias toward larger population centers and higher-income communities because a willingness to pay for a benefit is based on income (PDF). Other projects may require a risk analysis, which has a built-in bias toward wealthy communities because damages are captured as direct economic asset losses—the monetary value of damage to physical assets (PDF). As a consequence, benefit-cost, and risk analyses tend not to support investments in small or poor communities.
Read the full article about social equity in infrastructure by Melissa Finucane, Jaime Madrigano, and Jhacova Williams at the RAND Corporation.