Two Roads Diverging: Economic Inclusion and Educational Opportunity

Two Roads Diverging: Economic Inclusion and Educational Opportunity

By Robert McLaughlin and Susan Ballard
Originally published in the March/April 2020 issue of AC&E

As long ago as 1990, when Mark Tucker and the National Center on Education and the Economy published their landmark report, America’s Choice: High Skills or Low Wages!, we were warned.   American policy makers needed to undertake a sustained initiative to foster a high-skill, high-wage economy. Without concerted, proactive efforts at the national, state and local levels, the authors made clear that ours would become a second- or third-rate economy, where most job opportunities would be of the low-skill, low-wage variety.

We should know by now that America has made a decision, by default, to accept prolonged movement toward a low-skill, low-wage economy in which income inequality has grown, wealth has become increasingly concentrated, the middle class is being steadily eviscerated, and the political polarization that comes from intensifying income inequality has become the new normal.

If we are not chastened by our failure as a society to make better choices, we should be. This is how empires die.


What happens to a dream deferred?
Does it dry up
Like a raisin in the sun?

Or fester like a sore—
And then run?

Does it stink like rotten meat?
Or crust and sugar over—
Like a syrupy sweet?

Maybe it just sags
Like a heavy load.

Or does it explode?

Fortunately, we have a second chance to make much better choices, fueled now by a deeper, more visceral understanding of just what a low-skill, low-wage economy actually looks like. Buried deep in the bowels of federal policy is a statute – the Community Reinvestment Act (CRA) – that since 1977 has required federally insured banks to make investments for economic opportunity and inclusion in the nation’s low- and moderate-income (LMI) communities they serve.

If you are not a bank compliance executive or affordable housing advocate, you might never have heard of this policy, but if you care about economic vitality and the crucial role that educational and economic opportunity play in healthy communities, you would do well to become familiar with what CRA has done but, more importantly, what it can much more effectively do.

Precise figures are not available on how much banks spend each year on economic opportunity and inclusion in LMI communities. Estimates range from $100 billion to $200 billion each year. Banks currently receive credit toward meeting their CRA requirement by making loans, equity investments, and grants and by providing volunteer services in LMI areas, relating to affordable housing, financial literacy, financial inclusion (access to banking services such as loans, credit and checking accounts), and economic inclusion.

The National Collaborative for Digital Equity

Because of our policy advocacy and pilot efforts at the National Collaborative for Digital Equity, the Federal Reserve (one of three federal agencies that monitor banks’ CRA compliance) issued a report in 2016 adding digital equity as a fifth broad purpose eligible for CRA credit. Our premise has been simple: in an increasingly digital economy and society, it has become nearly impossible to learn about, apply, prepare and qualify for living wage jobs without digital access and skill.  Therefore, we contended, it made no sense for federal CRA policy to support $100 billion in economic inclusion investments each year without allowing banks to earn any CRA credit for removing increasingly crucial digital divide obstacles to economic opportunity.

We’re now busy mobilizing banking leaders and their partners in educational systems, workforce development and philanthropy, to make digital equity investments that are systemic.

By “systemic digital equity” we mean that CRA and other investments in tackling the digital divide, if they’re to merit sustaining and scaling, should address affordable access for LMI learners of all ages not only to broadband and computers but also to tech support, quality digital learning resources for economic and educational opportunity, apps/software for learning and productivity and, not least, librarian support for digital literacy and cybersafety skill development and to anticipate and minimize the risks of device addiction.

But, simply adding digital equity-related purposes into the array of CRA creditworthy purposes will likely achieve very little to move us toward the high-skill, high-wage economy we need for economic opportunity and vitality and healthy communities. We know from over $3 trillion invested in economic opportunity in LMI communities under CRA over the past four decades that these well-meaning investments have not appreciably lessened income inequality, the numbers and percentages of children growing up in poverty, and related indices of economic well-being. We know that it is increasingly difficult to fill living wage jobs, because our educational systems appear not to be equipping youths and adults with the skills they need to fill these jobs.

While banks have been investing vast sums under CRA for economic opportunity in LMI communities, taxpayers, state and federal policy makers and foundations have similarly made enormous investments for educational opportunity in LMI school systems.

We believe that it is the siloing of such investments in, respectively, economic and educational opportunity that dooms them both to continued failure to move the needle. Schools need the promise of imminent economic opportunity to persuade children living in unrelieved poverty that it is worth their while to persist, stay in school, and master the skills and dispositions needed to take advantage of pathways into living wage employment and self-employment. Equally, those who invest in and offer living wage jobs need school systems to reliably prepare their students to fill the living wage jobs that are necessary to move toward a high-skill, high-wage economy. CRA policy does not require that banks collaborate in sustained ways in LMI areas with educational system leaders and community leaders who provide voice and agency for those living in poverty. Federal regulators examine how banks spend their CRA resources and assess whether they have complied, but compliance is no longer enough. We must move beyond compliance to designing sustained local collaborations for impact on economic inclusion and educational opportunity.

Collective Impact Creates Pathways Out of Poverty

Equally, education foundations, school system leaders, and postsecondary leaders need to move beyond providing educational services “despite” poverty to designing educational efforts that dovetail with economic inclusion investments intended to build pathways out of poverty.  This is the work the National Collaborative for Digital Equity has undertaken. In collaboration with a growing array of partners, NCDE has launched state summits that mobilize diverse state and LMI community leaders in education, banking, workforce development and philanthropy to work together, using collective impact approaches that address both economic and educational opportunity in the same LMI community.

CRA funding can provide crucial catalytic fuel for locally appropriate efforts to move toward a high-skills, high-wage economy, through highly intentional partnerships that build educational pathways for children, youths and adults out of poverty and into living wage employment. We invite you to join us. There is much to be done.

Bob McLaughlin conceived the effort to persuade federal policy makers to give banks credit toward meeting CRA requirements in LMI communities, by providing grant and in-kind support for digital equity. He co-founded and is the Executive Director of NCDE. He has experience in teacher preparation – including chairing the Association of Teacher Educators’ National Commission for Technology and the Future of Teacher Education (and) as administrator of NH’s educator preparation program approval. He has also been active in STEM education reform, policy analysis and innovation, and designing and leading large-scale technical assistance initiatives at the federal level.

Susan Ballard is Vice-President of NCDE. A Past-President of the American Association of School Librarians and a Director of Library, Media and Technology in NH, she guided her district to National Program of the Year Award recognition. She has served as an adjunct professor and lecturer in a variety of school librarian preparation programs and has recently been involved in development of AASL’s National School Library Standards for Learners, Librarians and School Libraries (2018) as well as Standards for the Preparation of School Librarians (2019).

The American Consortium for Equity in Education, publisher of the "Equity & Access" journal, celebrates and connects the educators, associations, community partners and industry leaders who are working to solve problems and create a more equitable environment for historically underserved pre K-12 students throughout the United States.

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