Hopeful signs in a place of little hope

If Compton, Calif., attempted to trade on its reputation it would quickly run a deficit. Over the years, the small city so close to Los Angeles has suffered mightily from crime, racial strife, urban decay, drug trafficking and gang violence.

From an economics standpoint there were two important consequences of this history. First were successive waves of middle-class flight. Second, a predictable consequence of the first, was a persistent scarcity of both public and private investment capital in the city.

While it is in people’s nature to be optimistic, generally, the cumulative effect of the middle-class emigration and investment drought on Compton was to encourage apathy and despair – neither of which is helpful to economic growth. There are two things happening in Compton, though, that nourish hope, not just in the city but in all of us. Maybe, at last, we are regaining our footing.

The first involves a private sector initiative. Businesses both have long known that blighted city areas are what economists call “under-served,” especially by supermarkets, banks and other retailers.

This represents a tremendous untapped market opportunity for companies, especially those whose domestic growth prospects were otherwise flat. Unfortunately, past efforts by large corporations to fill the needs of that market were so often thwarted by security issues that the market possibilities were pretty much written off as impractical.

A few years ago, though, a new Target store opened in Compton — and it’s still standing. It is the product of what we might call an “eyes-open,” realistic view of the market and what it takes to survive in it.

In its own way, entering an under-served urban market is every bit as demanding as entering a market in a distant country. It is nothing like opening the 1,800th copy of a Starbucks in a new shopping mall. Every detail, every possibility, every dimension of the operation has to be examined, thought through and planned out.

Target appears to have done just that for its new store in Compton. It knew it would have to deal with security issues, for example, and took care not only to boost its own security measures but also to coordinate its efforts with local law enforcement authorities, who agreed to establish a sub-station on the premises.

As thorough as the plan was, though, it failed to anticipate the problems that would beset its labor force. Most of the workers are not wealthy, or even prosperous. Additionally, many of them have had sketchy employment histories, and little in the way of savings to cushion the blows that life sends us.

Target has brought in someone whose principal task is to help workers cope with these problems so that they don’t interfere with their productivity and, in some cases, their employment. A part-time social services specialist talks with people who are showing obvious signs of some distress at work, often helping them thread through the bureaucracies, public and private, which control many of our critical services.

Target Stores seems committed to making its Compton operation a success. And if the move into domestic under-served markets proves to be economically attractive, the major brand stores could lead a revival in urban areas that have suffered so much over the past half century. After two solid years of endlessly dreary economic news, this is one economic story that is hopeful.

The second encouraging event in Compton recently was not a private sector initiative, but it wasn’t really a public sector initiative, either. It was more of a community movement.

McKinley Elementary is a public school in Compton that has been failing for at least a decade. On Dec. 7, more than 51 percent of the parents of kids attending McKinley voted to reorganize it as a charter school. This type of “parent power” was approved by the California Legislature just last year, and this is the first result. The Celerity Educational Group will soon be operating the school.

This, among other things, is about big money and big-money politics arriving on the scene quickly. The result is that there have been threats, intimidation claims, calls for investigations, editorials and op-eds — the full enchilada. The vested interests, most visibly the unions, the school board and their allies, are pulling out all the stops.

Charter schools are not the answer to everything that is wrong with public education. And they are not without their own problems. They are the answer to one thing, though: apathy. If we are convinced that nothing can be done, nothing will ever change or improve; nothing will ever get better.

It’s encouraging to see these efforts to change things in Compton. And if they can improve things there, there’s hope for all of us.

James McCusker is a Bothell economist, educator and consultant. He also writes Business 101 monthly for the Snohomish County Business Journal.