A survey of 350 of the country's largest corporations reveals that big business is not prepared at this time to make a big commitment to the future of America's central cities.Among the principal deterrents to urban expansionare high taxes, high crime and poor public services, government regulations discouraging modernization of facilities, and lack of a willing and able work force.
At the same time, the survey, titled "Large Corporations and Urban Employment," shows that a few companies are successfully making sizeable investments and initiating told programs in decaying downtown areas. There in no indication of how many firms fall into each category.
One purpose of the research, performed by the Subcommittee on the City of the House Banking, Finance and Urban Affairs Committee, was to ascertain what industries plan to expand or contract their urban operations over the next five years, and to determine what government policies influence those moves. Chairman Henry S. Reuss (D.-Wls) said the data would be forwarded to White House officials involved in formulating a national urban policy.
Of the Fortune 800 biggest industrials and non-manufacturing companies solicited, 352 responded. Two hundred of these proved to have substantial business in central cities and to be willing to impart their views on urban employment. However, virtually none answered Reuss' question about their plans, explaining either the information was propreitary or the answer depended on unforeseeable economic conditions. While none mentioned plans to leave the city, few if any spoke of moving in.
Reuss declared, "The responses show an encouraging commitment by many corporations to preserve and create central city jobs, and justify some optimism about the economic future of the cities.The stage is set for an aggressive government-led program to increase private sector programs against unemployment." However, an aide confided that the subcommittee was disappointed in the small commitment expressed.
Reuss conceded that the many industries that already have moved to the suburbs are unlikely to participate in the back-to-the-cities movement, so the question becomes how best to encourage those still in downtown areas. The clearest message in the letters reaching the subcommittee is that, If the Carter administration wants to encourage business to stay, expand and move to the city, government will have to eliminate or modify some of the impediments it has put in the way.
Nearly one-third of the corporations complained about high property, business and personal income taxes in the cities. One-third also blamed the inferior quality of public transportation and education. Municipal schools turn out potential employes with inadequate skills and also inhibit recruitment of middle-level executives with families. At least one corporation in four mentioned uncoordinated or onerous government environmental and sately regulations.
Corporations, Reuss observed, feel that recent expansion of welfare and unemployment benefits as well as the necessity of paying the minimum wage to undertrained and undereducated workers have impeded hiring in the central cities. Also, federal job-training programs seem "insensitive" to the need of business.
A frequent complaint involved the Clean Air Act. Atlantic Richfield wrote, "It appears to be national policy to cease or limit growth in air-polluted areas." The firm called on the Environment Protection Agency to relax its standards a bit to allow a company to build up credits for reduction pollution at exiting plants which then could be traded off against pollution from new facilities. In short, the corporation wants a better balance between promoting industrial growth and improving air quality.
While Republic Steel is most worried over the threat of price controls, the Mellon Bank wrote that federal restrictions on branch banking were prohibiting it from establishing offices in the centres of other Pennsylvania cities besides Pittsburgh. In summary, wrote General Motors Vice President Robert F. Magill, "There are major conflicts between the goals of environmental, energy, economic, employment, social and many other efforts. If appropriate types of industrial development are to be enticed into major urban areas, major economic incentives must be introduced to balance the built in disadvantages"
Only a few contributed specific suggestions for encouraging business to maintain or locate operations in central cities. General Electric Vice President P.S. Peter advocated an urban bank and certificates of necessity, which would enable a private investor to recover an investment in a new or rehabilitated plant at a rate of at least 20 percent annually over a five-year period.
Committee member Millicent Fenwick (R.J.N.) declared, "For a long time, business enjoyed a period of euphoria, but now we are bumping into reality. American industry is no longer competitve." She said she was not disappointed at the survey, which showed that some companies were doing "surprisingly well" in central cities.
In general, those industries that expressed the greatest confidence were banks, utilities and insurance companies, primarily because they said they could not afford to move. Other reasons given were a desire to retain services of employes who might not want to relocate out of the city, closeness to service suppliers and subcontractors, and social responsibility. Whereas many corporations bemoaned the presence of an insufficiently experienced and motivated work force in the cities, at least one of those staying in the metropolis cited the availability of a large pool of semiskilled and skilled employees as a plus.
Among the most bullish on the central city were Ralston Purina in St. Louis, Control Data in St. Paul, Seatrain Lines in Bedford Stuyvesant, Philip Morris in Manhattan and Ohio Edison in Akron. The utility's president wrote, "Our commitment to the continued vitality of the central cities is best illustrated by our recent decision with respect to the location of our general offices. Our headquarters in central Akron, which we had occupied since the 1920s, had become intolerably overcrowded and outmoded. Our studies indicated that it would be cheaper to move to new quarters than to attempt to remodel the old. After long and sometimes painful thought, we decided that the news quarters should be in downtown Akron, rather than in a suburban area, notwithstanding the much higher cost of construction and of parking." The Akron Beacon Journal hailed the decision, saying, "It means that for the first time the city can encertain real hopes of landing a major developer (downtown) . . . community development is getting into high gear."
Another subcommittee question asked corporations to describe recruitment or job-training activities specifically aimed at the cities' unemployed. General Motors reported hiring more than 116,000 employes since 1968 under a training program for the hard-core unemployed sponsored by the National Alliance of Businessmen.