Employment solutions: Can a town’s good deeds lower unemployment?

The dollars and cents of good deeds: Communities with high social capital tend to have lower unemployment. Some seeking employment solutions see this altruistic glue as something to study.

Cover Story

Long before anyone uttered the R-word, people in Chatham County, N.C., saw the economy starting to sputter. They noticed prices going up and incomes going down. So they fought back by taking care of each other.

Roxanne Hollander, a local chiropractor, has opened up a weekly sliding-scale clinic, offering massage, acupuncture, and chiropractic care for between $15 and $30, about a quarter of the usual fee.

Lee Pollard, a benevolent mad scientist, has donated close to 500 computers to needy kids and seniors, refurbishing old machines that people give him in the cheerful chaos of his computer repair shop. Somewhere under the mess on his desk, there's a card from a 4-year-old, written in crayon: "You're a very nice man. I love my computer."

At the traffic circle in downtown Pittsboro, the Chatham County seat, Tony Sullivan sells and repairs musical instruments. These days, people come by to sell their own instruments, not to buy any. His teaching income is drying up, too, because laid-off parents can't afford lessons for their kids. But Mr. Sullivan has continued to teach some of those kids free of charge.

"I'm a lousy businessman," Sullivan observes wryly. But there's more to it than that. "Everybody that comes in that door is more or less a friend, you know. These are all people from this little town, this area. They're my neighbors, and they're hurting. You want to help people out as much as you can."

Sullivan's landlady, Elizabeth Anderson, agrees. A few months ago, she lowered his rent.

"I could use the $100, too, but not as much as this store could," Ms. Anderson explains. "It's worth it, in the long run, because of keeping people still trying to contribute to the economy and their own well-being, and the well-being of the town."

Recent studies suggest that community altruism doesn't just sweeten people's lives, it's also good dollars and cents. Though it's hard to prove with scientific certainty, there is plenty of evidence showing that places with active citizens have lost fewer jobs during the recession than places without them. Chatham County – part bedroom community, part green living mecca, part Mayberry, R.F.D. – may be a case in point. Its jobless rate is 7.3 percent, one of the lowest rates in the state.

Civic safety nets: God, friends, Facebook

The notion that it pays for people to look after each other isn't new. If you ask Herbert Gintis, a behavioral economist at the University of Massachusetts, it goes back 2 million years. It started when hunter-gatherers began living together in tribes, and people's chances of survival were better if they worked together and made decisions together than if they fended for themselves. Of course, human society has morphed tremendously over millenniums. But Professor Gintis sees remnants of those ancient dynamics all over the place.

"Communities operate mostly not through law, but through mutual give and take and co-operation," he says. "In a good community, people know what the kids are doing. They gossip and report on each other; they help each other. A community is a form of social organization in which control is informally exercised through participation. People just participate – they come to the town meeting, they talk to each other. Everybody keeps their own property in good shape because their neighbors will yell at them if they don't."

The idea that "united we stand, divided we fall" seems just as relevant today as it was in prehistoric times. An October 2011 study by the National Conference on Citizenship (NCoC), a bipartisan think tank in Washington, D.C., shows that states and cities with good civic health have lower unemployment rates than other places. So far, there's no conclusive proof that civic health can actually create low unemployment. But the correlation between the two is strong.

The study used Current Population Survey data from the US Census Bureau and the Bureau of Labor Statistics to measure civic health. It looked at five main indicators: how much people volunteered, how often they went to public meetings, and whether they helped their neighbors, registered to vote, and voted. It also took into account specific external factors that could influence an area's economy: the presence of the oil and gas industry, the state of the local housing market, and the percentage of people with high school diplomas and professional jobs.

The study found that the states that lost the fewest jobs between 2006 and 2010 – Alaska, South Dakota, North Dakota, Kansas and Minnesota – also had some of the highest levels of volunteerism. Conversely, the states that lost the most jobs – Nevada, California, Alabama, Florida, Rhode Island – had much less volunteerism. For the country as a whole, a 4 percent increase in the rate of working with neighbors was connected to a 1 percent decrease in job loss. A 4 percent increase in public meeting attendance had nearly the same outcome. To a lesser degree, volunteering and voter registration were also related to lower unemployment.

For David Smith, the executive director of the NCoC, that's no coincidence. "The civic safety nets are God, friends, and Facebook," he says. Community networking, he explains, helps people develop skills they can use on the job and also spreads information – not scientific, perhaps, but common sense.

"A big part of this concept is that people get jobs through friends or colleagues," Mr. Smith adds. "So in a large way, what having a high level of connection and community engagement does, is it matches the needs of the labor force with the workforce. It finds the right people who have these skills and helps place them with people looking for qualified employees."

That's what's happening in Ajo, a poor desert town in Arizona that's been trying to rebuild itself since the 1980s, when copper mining closed down. Local contractors have teamed up with a local nonprofit, the International Sonoran Desert Alliance (ISDA), to work on a town renovation project and train residents in construction skills in the process.

"It's very much built around the local economy and the local workforce," says Aaron Cooper, the ISDA's economic development director. He says even though there are few formal jobs in Ajo, there is a lot of demand for the manual skills the trainees are learning. "That is the most innovative part of our program – that not only are we trying to get a job done with local labor, but we're trying to connect people who are interested in working with those who can probably help employ them."

If it succeeds, the Ajo project could be a grass-roots model for economic development and revitalization that's an alternative to the usual pattern of brain drain and community decline.

At the NCoC, Smith says people who have a connection to their community also have a stake in its success and a willingness to solve its problems. He says this "social capital" is as important to a community's economic recovery as a financial investment from government or business – and that no financial investment can succeed without it.

"For the financial capital to hold and make a difference in communities," he says, "you need to have human capital existing within those communities, to receive that financial capital and make it work. And as soon as you have that, when you invest the financial capital, you'll see greater returns. You'll see more jobs created and staying within those communities."

Smith and his researchers are careful to say that civic engagement alone won't create jobs. But because the connection is so strong, the NCoC has embarked on a joint study with the Knight Foundation to explore exactly how crucial civic health and community attachment are to economic prosperity.

The lost letter ruse

Other research supports this line of inquiry.

Robert Sampson, a Harvard University sociologist, spent 15 years studying all the neighborhoods in Chicago. His book, "Great American City," was published in January. Using the US Census, housing data, and community surveys, Professor Sampson looked at the social conditions that either strengthen or weaken local altruism. He found large differences between neighborhoods, and patterns that have persisted through the recession.

In one field experiment, his researchers randomly scattered thousands of letters with fake names throughout Chicago's neighborhoods, and then calculated the rate at which people picked them up and mailed them. The rate was anywhere from none returned to 82 percent returned, depending on the neighborhood. And the rate of return corresponded to other factors that reflected each neighborhood's social "climate."

It's not just wealth or poverty that determines a neighborhood's climate, Sampson found, though that plays a role. Another crucial factor is how many organizations there are. It doesn't matter if it's a nonprofit group or a basketball league, a church or a barbershop, as long as there's a way for local people to gather.

Take the neighborhood of Oakland. It's one of the poorest areas in Chicago, but it also has one of the highest ratios of community organizations. Oakland's poverty rate has actually dropped since 2000, and its home foreclosure rate is about average for Chicago – much better outcomes than in the city's other poor neighborhoods.

Sampson cautions that a lot of different factors can determine a community's condition, including gentrification. But aside from that, he says, Oakland represents a larger pattern. When citizens join groups, they can't help but talk, he explains. "They tell people about other activities, and they end up getting networks and joining associations that they otherwise wouldn't. They're not setting out to say, 'Our purpose is to build identity.' But it's an organic process that often happens."

That process can't solve the global economic crisis, he adds, but it can ease the pain.

"All the local altruistic acts in the world aren't going to save a community if, let's say, an entire industry shuts down, where everyone's losing their job," Sampson says. "But there are still these buffers that are incredibly important, and they are taking care of people's health – their mental health and their well-being."

A county in contrast

Like many other places, Chatham County, which sits right in the middle of North Carolina, has had its share of pain. Many of the 65,000 people who live here commute to professional jobs in Chapel Hill, Raleigh, Durham, and Greensboro. But for years, the county has been losing manufacturing and agricultural jobs, two mainstays of the traditional Southern economy. During the recession, three local chicken-processing plants closed shop, taking with them close to 2,000 jobs. In January, the largest restaurant in Pittsboro went bankrupt.

The area would have a harder time absorbing these blows without neighbors helping each other, says Charlie Horne, the Chatham County manager, "because there would be a lot more demand for services that we can and can't provide. Community organizations are filling in those gaps. People helping themselves are a lot less likely to go and try to burden whatever service government has if they've got another support group."

Mr. Horne himself has gotten into the act. He's lending his bull to a neighbor, a chicken farmer who lost his contract when the chicken-processing plants closed and is now building up his cattle herd instead.

Sometimes, neighborliness is the only thing that keeps a business afloat.

That's how it is for Kellee Metty. She and her husband own a building and remodeling company in northern Chatham County. They went from selling seven houses in 2007 to selling one in 2008. They have four kids, two in college and two getting married. Ms. Metty says making ends meet has been a real juggling act.

"All of our work, pretty much, comes from referrals," she says. "That's all been from neighbors," people who live in the subdivision she and her husband developed. Before the recession, they sold the houses they built the conventional way, through real estate agents and the Multiple Listing Service. "Just in a tangible, practical way, if we had not had those referrals we would have been out of business by now, for sure."

Besides that, Metty adds, there's the emotional and spiritual sustenance she gets from such kindness. Take her daughter's wedding. It was supposed to be catered by the restaurant in Pittsboro that went bankrupt. Metty lost her deposit and found herself in a quandary.

"So immediately everyone jumped into action – not just my neighborhood, but my church family as well," she says. "Everyone said, 'We'll just do what we need to do. We'll just gather the women at your house at noon on Saturday and put the food together.' "

When it comes to the number of organizations per capita here, Chatham County might be at the top of the nation's list. And much of the activity affects the local economy. On just one page of the weekly newspaper, you can read about the food drive at a local gym, a coupon exchange at the library, a workshop for job seekers, and a fundraiser for a local mentoring organization. In one day on the Chatham Chatlist – which is run by a volunteer – you see notices about the local farmers' market, a fundraiser at the local senior center, and an ad hoc meeting at the Pittsboro Town Hall aimed at attracting business downtown.

Lesley Landis, a local graphic designer, thinks part of the reason there's so much involvement is that, for many years, the community had to rely on itself – and the practice stuck. "For so long, Pittsboro and Chatham County were somewhat isolated between these huge metro areas," she says. "We don't have a lot of corporate infrastructure. So we were required to be somewhat self-sufficient."

The numbers here are relatively good. Besides having an unemployment rate below the state average, the county has grown by almost 29 percent since 2000, compared with the state growth rate of 18.5 percent.

A business lends a hand to competitors

Throughout the country, there are many stories like Chatham County's, about people having each other's back during these hard times.

In 2009, every member of the firefighters union in Yonkers, N.Y., agreed to work one day free of charge, saving the city $1 million and staving off layoffs. Last Christmas, anonymous "layaway angels" spontaneously donated more than $1 million to pay off the layaway accounts of Kmart shoppers in stores around the nation. In January, loyal customers "cash mobbed" a family-run hardware store in Chagrin Falls, Ohio, inundating it with sales.

But the most powerful story of all may belong to a little oil company in Dixfield, Maine. In February, The New York Times ran an article about Hometown Energy giving a break to an impoverished older couple who offered to trade the title to their car in exchange for an oil delivery. Overnight, donations from across the country flooded in, overwhelming co-owner Ike Libby and his staff.

"We had no idea that we would get any donations at all," Mr. Libby told the Monitor. "We were hit upside the head, so to speak. Over a week – we have two phone lines – both phone lines were ringing. It was just simply amazing. I haven't cried so much since when I was a little kid."

Even the local television reporter who came to see him was touched. "I was dead tired and really emotional," Libby recalls, "and I looked at the guy doing the interview, and he had a stream of tears running down his face."

Hometown Energy has set up a website to manage the donations, which have totaled about $250,000. But instead of keeping all the money for his own customers, Libby is sharing it with several other oil companies in his area – his competitors – because many of their customers need help, too. He says as generous as the donations have been, they're just a drop in the bucket in terms of the local need, because of federal cuts to heating assistance for low-income people.

"The other oil companies were, I think, taken aback just because we did offer it to them," Libby says. "But I didn't think we should be taking advantage of someone else's heart. It's not my money, you know. It's America's money."

Rugged individualism or rowing together?

The Hometown Energy story brings up an interesting question: How should people in need get help? Should Libby's customers, for instance, rely on the government to help them pay for heat or on the generosity of donors, or should they manage alone the best they can? It's a perennial debate: the tension between rugged individualism versus rowing together is practically written into the nation's genes.

At George Washington University in Washington, D.C., Amitai Etzioni espouses an idea he calls "communitarianism" – that society is really like an extended family and we are each other's keeper. He says the quintessential American image of pioneers riding off into a self-reliant future isn't exactly what it seems.

"There's a lot of talk about men going west," Professor Etzioni says. "But men did not go west; caravans went west. When we had a barn-raising, what did it mean? It meant all the community came together to help whoever's turn it was today to raise the barn. And you talk about the wonders of the one-room schoolhouse." It was the community, he says, that created public education.

Etzioni respects volunteers. Many of them, he says, do work that's essential in order to keep society functioning, like fighting fires or responding to emergency medical calls. And he's not surprised that places with high levels of volunteerism are showing more economic resilience. But he doesn't think volunteers can meet the nation's needs on their own.

The problem today, he argues, is that society is out of balance. "The thing about society is that it's a stool which has three legs: the government, the market, and the community. And two of them are too long and one is too short. There's too much government, too much market, and not enough community."

Etzioni says the answer is to rebuild community – but not to expect it to replace either the government or the market. "So you want the kind of balance you get when everybody is pulling in their own direction, like a good sailboat, and the mast stays erect because there are strings pulling in both directions."

At the Heritage Foundation, a conservative think tank in Washington, D.C., Ryan Messmore agrees there's a lack of balance. His point of view is that just throwing money at society's problems won't fix them, because people need spiritual and emotional sustenance as well as financial support. He says faith-based and community groups can and should provide a lot of the help that people now expect from the government.

Mr. Messmore says historically in the United States, faith-based groups would form to help people in need – but do so in a way that demanded accountability and encouraged people to develop the habits and skills that would allow them to flourish in the long run.

"So this family would show up at the front steps of a faith-based association," he says, "and they would say, 'Come in, sit down, tell us your story. How did you get into this situation? What are your skills? What are your needs?' And then they would ask that person if they were willing to split wood – or, for pregnant women, can you knit. Were they willing to be involved in more than just a handout relationship?"

Messmore maintains that when the government spends more money addressing the needs that civil society used to address, people's expectations and sense of responsibility begin to change. "So that's just something healthy communities need to be aware of – that when they invite government involvement, they risk crowding out some of those approaches that can do better at addressing the real problem."

Polarized politically but together financially

Outside the Beltway, other communities are having similar discussions, including Chatham County.

If the county had a color, it would be purple. There are old-line, red-state conservatives here and progressive, blue-state transplants. There are fundamentalist Christians and nature-loving pagans. There are immigrant rights activists and people who fly Confederate flags. At times, seemingly small issues spur controversy, and the discussion on the county chat list turns toxic.

This may be a local reflection of deep national divisions. It may be a sign that at least people care enough about where they live to argue with each other. It may also highlight the need, and the opportunity, to move beyond partisanship to another way of relating.

That's the hope of NCoC's Smith.

He says people may be polarized when it comes to political labels, but that can change when they look at how much they have in common with their next-door neighbors.

"The more we realize that we'll solve local community problems together, and sacrifice together and struggle together, and move to a more prosperous community together," he says, "that's going to mean more than if we have an 'R' or a 'D' next to our name." At a time when the public's trust in government and corporate institutions is at an all-time low, Smith says, grass-roots cooperation could be the movement that pulls the economy out of recession, and pulls society together anew.