The Evaluation of the Tribal Welfare-to-Work Grants Program: Initial Implementation Findings. Barriers to Business Development and Job Creation in Indian Country


Basic infrastructure components needed to promote and support business development and associated job creation often are absent or underdeveloped in Indian country. The grantees participating in the study provide good examples of how shortcomings in transportation, electricity, telecommunications, computing, and workforce preparation affect economic development and welfare reform in Indian country.

While the emphasis on moving members from welfare to work has encouraged tribes to identify and try to remove barriers to economic development and job creation on tribal lands, significant barriers still exist. Few private-sector employers have been attracted to Indian country, and few tribally owned or sponsored enterprises have generated enough jobs to dramatically reduce unemployment on reservations. Barriers to economic development and job creation in Indian country include:

  • Remote Location and Inaccessibility. Many tribes and Alaska Native villages are located far from urban markets and resources and from major road, rail, and airport facilities. This distance barrier is often compounded by extremes in weather--extreme heat in the summer or extreme cold in the winter--as in the areas served by the Tanana Chiefs Conference (Box II.1). Tribes often lack the infrastructure--such as public transportation, good local roads, and modern telecommunications--needed for economic development.

Box 2.1:
Tanana Chiefs Conference, Inc. (TCC) Subsistence Economy in an Extreme Environment

In 1996, the TCC service population was estimated at 11,086 people-predominantly Indians, but also including Eskimos and Aleuts. The 43 Alaska Native villages where the majority of the TCC service population resides tend to have fewer than 500 inhabitants.

Most of these villages-spread across an area only slightly smaller than Texas-are hundreds of miles from the nearest city, Fairbanks. They are accessible by bush plane, boat, or snowmobile, but not by road. Lack of transportation is a critical barrier to employment. Few village landing strips can be used after sundown for lack of landing lights.

Life in the villages is harsh. Homes in the villages generally lack indoor plumbing, electricity, and telephones. Most villages have a common source of water (for example, washeteria), and water is hauled to each home from the central source. The climate is subarctic with long, harsh winters and short, warm summers. Summer highs range from 65oF to 80oF; winter lows are well below zero degrees. Extended periods of -30oF are common, as are annual snowfalls exceeding 50 inches.

The economy of most of the TCC villages is subsistence based. It includes hunting (moose, caribou, porcupine, rabbit, and ptarmigan), freshwater fishing, and harvesting berries.

  • High Crime Rate. High crime rates discourage business investment and development. Most of the study sites reported high crime rates and active youth gangs, and some tribal courts have a large backlog of criminal cases.
  • Lack of Banks and Capital. Because of distance from financial centers and other factors, few financial institutions serve tribes, and few tribal members have savings or collateral needed for loans to finance business enterprises. Making matters worse, much of the money that flows into reservations is spent on goods and services available only off the reservation. Study informants estimated that 60 percent of dollars spent by tribes and tribal members are spent off the reservation.
  • Undesirable Workforce Characteristics. Most of the study grantees have relatively small numbers and proportions of highly trained and educated workers and relatively large numbers of people lacking education beyond high school. It is commonly believed that relatively high proportions of people in the workforce have problems with substance abuse and other illnesses such as diabetes. Such workforce characteristics may discourage private-sector employers from investing in a reservation community.