DOCUMENT RESUME ED 061 436 VT 014 933 AUTHOR McLennan, Kenneth; Seidenstat Paul TITLE New Business and Urban Employment Opportunities. INSTITUTION Temple Univ., Philadelphia, Pa. SPONS AGENCY Manpower Administration (DOL), Washington, D.C. NOTE 355p. EDRS PRICE MF-$0.65 HC-$13.16 DESCRIPTORS Business; Economic Development; *Employment Opportunities; *Geographic Distribution; Ghettos; *Industrialization; Labor Market; *Manpower Needs; Unemployment; *Urban Areas IDENTIFIEPS Philadelphia ABSTRACT In an examlnation of the geograph c dist_ibution of the urban demand for labor and its relationshipw .th unemployment in Philadelphia, this study:(1) considers the potential contributin of new businesses in rehabilitating the ghettos, CO examines the relative attractiveness of different parts of the cityto various types of industries, and (3) presents a cross-sectional analysisof the industrial employment structure by geographicarea. The study concludes that the city's slow employment growth has beendue to a failure to compete with suburban areas fornew industries, rather than inadequate growth in existing industries. A policy ofattracting new industry is not considered feasible, because economic forces deter business expansion..The findings indicate that policiesshould be directed toward increasing the productivity and mobilityof ghetto residents. Programs such as training and urban transitsystems should be given priority. (BH) U.S. DEPARTMENT Or HEALTH, EDUCATION & WELFARE OFFICE OF EDUCATION THIS DOCUMENT HAS BEEN REPRO- DUCED EXACTLY AS RECEIVED FROM THE PERSON OR ORGANIZATION ORIG- INATING IT POINTS OF VIEW OR OPIN- IONS. STATED DO NOT NECESSARILY REPRESENT OFFICIAL OFFICE OF EDU- CATION POSITION OR POLICY USINESSES AND URBAN EMPLOYMENT OPPORTUNITIES by Kenneth McLennan 'and Paul Seidenstat This report was prepared for'the Manpower Administratiod, U. S. Depart- ment of Labor, under research contract NO. 81-40-69-20 authorized by Title I of the Manpower Development and Training Act. Since contractors perfoyming research under Government sponsorship are encouraged to ex- press their own judgment freely, thereport does not necessarily repre- sent the Department's official opinion or policy.. Moreover, the con- tractor is solely responsible for the factual accuracy of all material developed in the report. a -emple University of e Commonwealth System of Higher Education Philadelphia Acknowled_gements This study was made possible by the generous financial support__the Manpower Administration, U.S. Department of Labor. The authors are grateful for assistance throughout the project provided by many of the staff -f the Manpower Administ ation.The confidence in the nature of the project shown by Dr. Howard RosenDirector. Office of Research and Development, Manpower Administration, was most helpful during the execution of the research as was the constant assistance and advice provided by Joseph Epstein, Lester Rindler and Har y Burton. Robert Manifold and John Ryan of the Manpower Administration -e e of great assistance in arranging and adjusting the budget to suit the needs of the research. Their patience and understanding were certainly appreciated. The personnel of the City of Philadelphia also gave considerable support by providing much of the data used in the analysis. In this respect Bertram Todd, Milton Silverstein of the Management Infor_ation Systems Division, Departmnt -f Finance and James Crummett formerly of the Office of Econo ic Development, Department of Finance deserve special recognition for their time and effort in explaining and processing some of the data. Background information for the study was willingly provided by the staff of the Bureau of Employment Securi-y, Pennsylvania Department of Labor and Industry. The collection of original data from some bdo hundred firms would- not have been possible without the participation of senior company . officials and a team of devoted and sometimes tenacious interviewers including David Binkley, Nancy Cliff James Keddie Rebekah Rosenberg, and Shelley Staller. The participation fro_ Philadelphia businesses was very gratifying and to a large extent the assistance of the Greater Philadelphia Chamber of Commerce and its Executive Director, Thatcher Longstrethensured the business community's support. The computer prograrrner for the project, Wayne Kaplan, displayed considerable skill and patience during the extensive processing of the data. His assistance was of great value to the project. Statistical advice in the des_gn and execution of the project was willingly supplied by our colleagues John Flueck, Stanley Henemeir and Bernard Siskin. Special thanks are due to the two research assistants attached to the project, Brian Dittenhafer and Stephen McDonough. They helped supervise the collection of data and the analysis of data. They also read sections of the manuscript and made valuable suggestions which were incorporated into the final version. Their role in the p oject went far beyond the requirements of their position and for this the authors are very grateful. The help of the secretarial staff of the Depart-ent of Economics, Temple University, particularly that of Grace Tappert and Peggy Rawling, was essential in processing the manuscript. To Thomas Walsh and George Knecht of the Graphic A_Is Departme:tAud °visual Center, Temple University, we owe thanks for the quality and service p ovided in the preparation of the charts. The details of administering the research contract were ably carried out by Richard Harrington and Richard Smith of Research and Program Development, Temple University and Marshall Esterson of the School of Business Ad_ nistration, Temple University. To Dean Seymour Wolfbein and Associate Dean Louis T. Harms of Temple the authors owe a considerable debt for the encouragement and support they provided while the research was being executed. Many persons in various Federal government agencies and the academic community p ovided valuable comments on an earlier draft of the manuscripts. In this respect the authors especially wish t- thank Ellen M. Bussey, Gerald L. Duskin, Stanley Miller Ellen Sehgal, and Thomas M. Stanback,'Jr. None of these commentators or anyone named above ii responsible for any shortco_ings in the manuscript. Rapid demographic changes in u _ban areas and re atedgeographic changes in racial and income distribution are a-_ong the mostsignificant socio- economic phenomena of the 1960's.The relationships among these new features of urbanizatiOn and the high rate _f unemployment poverty, deteriorated housing, and inadequate education are today onlydimly understood. Statistics which present only urban and nonurbancomparisons in unemployMent, growth of new job opportunities, drime, et . are extre-_ely misleading. The magnitude and relative importance of each major socio- economic problem appears to vary with the size of thecity or community within the city. In segments of every major urbafl area thousands ofpeople are cro ded together in slums where theseverity of socio-economic problems is many times greater than the more affluent parts ofthe urban area. The differential In the socio-economic conditions within urban areasis cert inly a major cont ibutor to thechanging de ography. It is less clear whether the slow growth of job opportunities within some sectionsof the urban area increase the severity of many of the serious socio economicproblems which plague many parts of our inner cities. During the latter part of the past decade policy-makershave recognized the need for massive financial aid to our cities. This has led to heavy investments to rehabilitate the city. Investment has taken many forms. Renewal of dilapidated housing and t some extent commercial property,aid to educationally disadvantaged children, aid toghetto businesses and manpower retraining efforts have concentrated onthe residents living in the most blighted sectors of the central cities. Despite the massive financial efforts the social indicators of human andphysical well-being in the city have not improved. Crime rates have risen, the stock of deteriorating housing does not seem to be shrinkin- and the educational income and employment opportunity differen '-ls among residents of different geographic sectors within the urban areas do notseem to be narrowing. In fac_ there is a widespread feeling of pessimism about the future role of the city in the nation's social andecono ic systems. Some have questioned whether the large city Is a viable unit for providng the services and economic opportunities demanded by the population and have suggested that public policy should attempt to accelerate the current decentralization trends. In contrast, it is frequently pointed out that there are serious institutional and economic ba-iers (such as discr _a- on_ which, given further decentralization, 11 simply worsen the plight of millions of slum residents. For the latter,rehabilitation of the inner city may be their only chance of economic tmprovement. The choice of an effective urban policy requires a mdre complete understanding of the economic structure of the various segments which make up the metropol tan area. If it is assumed that economic oppOrtunity is the appropriate linkage between the social decay of the poverty areas and the more affluent sections of the city and its suburban ring it seems appropriate to make a comparative analysis of selected ge_graphic parts of the metropolitan area. The emphasis should be on the potential economic solution to the problcm rather than the cri