Toward Inclusive Economies in Transatlantic Cities: Navigating Labor Market Change at the Local Level

This report examines the adverse effects of labor market change in the United States and Europe, specifically the rise in precarious work and stagnation of wages, and starts to connect these macro-level structural changes with transatlantic city policy response.

The type and quality of work and wages is an outcome of how growth is generated and shared through economic development. This critical link between economic development and labor market policy is the focus of this report. The Urban and Regional Policy Program of the German Marshall Fund convened a taskforce of fourteen U.S. and European labor market and economic development specialists to explore what cities can do to address the quality of work and wages as part of building more inclusive and equitable urban economies. This report outlines the recommendations of the taskforce.

A central recommendation is the call for economic development to be human-centered, which is in line with other calls by policymakers who recognize the need to put “people first” or “people at the center” of policymaking. To achieve this there needs to be a fundamental rethinking of how current economic development systems work. This requires a systems change approach that is shaped by three mutually reinforcing principles.

• Democratize and localize the economic development process by activating and engaging a range of stakeholders in the policy design and evaluation process.
• Strengthen data and forecasting capacity.
• The economic development metrics used to guide how policy is formulated, designed, implemented and evaluated needs to be based on indicators that more accurately reflect the median socioeconomic well-being and experience of residents.

This report unpacks these recommendations after outlining and seeking to understand the nature, drivers and outcomes of labor market change from a transatlantic perspective. The effects of macro-level changes are felt at the local level and the second chapter of this report therefore explores the evidence on this. The report closes with the recommendations for systems change and a call to action.