Network news; enterprise zones ignore the importance of social networks.

• Author: Larson, Elizabeth
• Position: Trends

WHEN GL TRANSPORTS NEEDED extra drivers for the holiday rush last winter, the company didn't advertise in local newspapers or post signs on telephone polls. Instead, the owner of the West Los Angeles freight business called an old friend, Carlos Augusto. "Sure," said Augusto, when asked if he knew anyone looking for employment. "My youngest boy needs the work. He's a good kid, hard-working. You can rely on me that he'll be on time every day."

This is a social network in action. Although countless such networks operate at every level of the economy, policy makers ignore their importance in the areas where community ties are most needed: the inner cities. A recent study funded by the Russell Sage Foundation and other groups concludes that enterprise zones, which aim to provide jobs in high-poverty districts by offering tax breaks and other incentives to outside businesses that locate there, are poorly conceived because personal networks, rather than physical proximity, determine job placement.

The study's authors, sociologists Philip Kasinitz and Jan Rosenberg, looked at Red Hook, Brooklyn, an area of some 13,000 residents severed from their middle-class neighbors by concrete highways. Half of Red Hook's residents lived below the poverty level in 1989, and three-fourths called a monstrous housing project home. Although Red Hook is not an enterprise zone...