During the State of the Union speech, President Obama plans to explain his plan to battle inequality and poverty including the "promise zone" plan, which is a new version of an old idea: the "enterprise zone," writes Annie Lowrey of The New York Times. Recently Obama named a large part of southeastern Kentucky a promise zone, which means it will attract "renewed attention from Washington, which vowed to provide it top priority for grants and, if Congress goes along, new tax dollars as well," Lowery notes, adding that "this remote part of Appalachia" suffers from an unemployment rate of 12.8 percent, rampant drug abuse and a 26 percent rate of poverty.
The zone is one of five named so far; the other rural one is the Choctaw Nation in eastern Oklahoma. The Kentucky plan continues to gain advocates "from across the political spectrum," Lowrey reports. For example, Kentucky Gov. Steve Beshear and Sen. Rand Paul, a Democrat and a Republican, support the the program. "This adds up to significant stimulus," Paul told Lowrey. "It could have a big effect for people who are really hurting."
Lowery writes, "But experts are broadly skeptical that any federal initiative would be enough to combat either the immediate economic upheaval caused by the loss of coal jobs or the long-term economic torpor that is a product of remoteness, poor infrastructure and an under-educated work force." Bob Turner, a Skidmore College professor who has studied enterprise zones, said, "There's a real gap between the amount of private and public disinvestment in these areas and the scope of the public intervention."
Local workers and officials are unsure how significantly the government will be able to improve the area's economy. "There isn't a magic bullet here," said Jeff Whitehead, the executive director of the Eastern Kentucky Concentrated Employment Program. "My agency is involved with trying to retrain 8,000 coal miners who have lost their jobs. Unfortunately, one of the more successful things we're doing is helping them find jobs outside the area."
The government had helped enterprise zones by providing better tax rates and anti-crime programs in an attempt to attract businesses to the area while also seeking to improve education programs and build the work force. Past enterprise zones have had mixed results. In 1994 two and a half counties on the edge of the East Kentucky Coal Field became an empowerment zone, but the resulting improvements in employment and poverty may have simply resulted from improvements in the broader economy, Lowery writes. She notes that the region is still dependent upon federal programs, and the declining coal industry to the east has brought on a rise in crime and poverty.
Supporters of the promise zones remain optimistic that the program could be more effective this time. In Kentucky, the initiative involves worker retraining, business investment and anti-drug policies. "The idea is to build a diversified economy based on the talents of the local people as they are now," said Alison Davis, director of the Community and Economic Development Initiative of Kentucky at the University of Kentucky. She emphasized the importance of not only attracting large businesses but also assisting workers to start new businesses: "In the past, it's been a lot of 'Shoot anything that flies! But in Appalachia, particularly in these counties—it would be a special, unique company that would find its needs met in Eastern Kentucky." (Read more)
Also, the effort will have some corollary help, which the Times story fails to note. The U.S. Department of Agriculture has added it and several other counties to its StrikeForce list for preferential treatment, and Beshear and 5th District U.S. Rep. Harold "Hal" Rogers, chair of the House Appropriations Committee, have mounted a joint effort to boost the economy in the state's Appalachian counties, including $100 million for highspeed Internet. Also, the promise zone will be managed by Kentucky Highlands Investment Corp., a venture-capital agency that handled the empowerment zone.
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| Not all of Whitley County, the westernmost county in the zone, is in it. |
Lowery writes, "But experts are broadly skeptical that any federal initiative would be enough to combat either the immediate economic upheaval caused by the loss of coal jobs or the long-term economic torpor that is a product of remoteness, poor infrastructure and an under-educated work force." Bob Turner, a Skidmore College professor who has studied enterprise zones, said, "There's a real gap between the amount of private and public disinvestment in these areas and the scope of the public intervention."
Local workers and officials are unsure how significantly the government will be able to improve the area's economy. "There isn't a magic bullet here," said Jeff Whitehead, the executive director of the Eastern Kentucky Concentrated Employment Program. "My agency is involved with trying to retrain 8,000 coal miners who have lost their jobs. Unfortunately, one of the more successful things we're doing is helping them find jobs outside the area."
The government had helped enterprise zones by providing better tax rates and anti-crime programs in an attempt to attract businesses to the area while also seeking to improve education programs and build the work force. Past enterprise zones have had mixed results. In 1994 two and a half counties on the edge of the East Kentucky Coal Field became an empowerment zone, but the resulting improvements in employment and poverty may have simply resulted from improvements in the broader economy, Lowery writes. She notes that the region is still dependent upon federal programs, and the declining coal industry to the east has brought on a rise in crime and poverty.
Supporters of the promise zones remain optimistic that the program could be more effective this time. In Kentucky, the initiative involves worker retraining, business investment and anti-drug policies. "The idea is to build a diversified economy based on the talents of the local people as they are now," said Alison Davis, director of the Community and Economic Development Initiative of Kentucky at the University of Kentucky. She emphasized the importance of not only attracting large businesses but also assisting workers to start new businesses: "In the past, it's been a lot of 'Shoot anything that flies! But in Appalachia, particularly in these counties—it would be a special, unique company that would find its needs met in Eastern Kentucky." (Read more)
Also, the effort will have some corollary help, which the Times story fails to note. The U.S. Department of Agriculture has added it and several other counties to its StrikeForce list for preferential treatment, and Beshear and 5th District U.S. Rep. Harold "Hal" Rogers, chair of the House Appropriations Committee, have mounted a joint effort to boost the economy in the state's Appalachian counties, including $100 million for highspeed Internet. Also, the promise zone will be managed by Kentucky Highlands Investment Corp., a venture-capital agency that handled the empowerment zone.
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