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Box 4-2. Helping Areas Left Behind: Opening New MarketsThe movement from agriculture to manufacturing that took placeat the beginning of the 20th century implied a movement of jobs andpeople from rural to urban areas. Later, suburban employment grewas the rise in service occupations led to job creation outside the centralcities. Accompanying this change has been a broader movementof manufacturing jobs out of the Northeast and the Midwest, theNation’s traditional manufacturing centers, to the South and the West.In all geographic regions, however, the largest share of employmentgrowth between 1980 and 1990 took place in suburban counties. Themovement of manufacturing and service jobs from central cities andrural areas has led to the further decay of many of these areas and toa spatial mismatch between the availability of jobs and workers to fillthem.To help revitalize areas that have been left behind because of sectoralshifts or urban flight, the Administration has implemented anumber of important policies and proposed others. A prime exampleis the creation of empowerment zones and enterprise communities instruggling areas, as provided for in the Omnibus Budget ReconciliationAct of 1993. Businesses in these areas are eligible for tax incentivesto facilitate employment, financing, and investment. In 1994 thefirst 9 empowerment zones were designated, along with 95 smallerenterprise communities. These programs have leveraged over $10billion in additional public and private revitalization efforts, and arecent survey of businesses operating in the 31 empowerment zonescreated to date finds that these tax incentives have been an importantfactor in employment decisions. The fiscal 2001 budget proposes aseries of extensions to this program, including a third round of 10new empowerment zones. It will also extend existing wage credits forexisting and new empowerment zones through 2009.In addition, the Administration has proposed a new set of policiesto spur investment in low-income areas. These include a tax credit tospur equity capital; creation of America’s Private Investment Companies(APICs), patterned after overseas investment institutions toleverage investment in untapped domestic markets; and several programsdesigned to assist small businesses in low-income areas. Theproposal would expand BusinessLINC, a public-private partnershipthat encourages large businesses to work with small business owners;microenterprise initiatives to provide funding for technical assistanceto low-income microentrepreneurs; and the targeting of SmallBusiness Investment Company resources to areas served by the NewMarkets initiative.continued on next page...Chapter 4 | 145