The city of Boston to research, act on data regarding economic inequality

The city of Boston is taking steps to do its own research regarding troubling inequality within its borders:

And that’s why it’s so interesting that the city is planning to gather and maintain longitudinal data deep into the future that may help explain what’s going on and what policy levers can change the situation. The new cross-agency project, housed in the Mayor’s Office, is called the Economic Mobility Lab, and it has gotten initial funding from the Rockefeller Foundation…

You can see the germ of this idea in the Resilient Strategy that the city released a couple of months ago. Deep in the report, it says that “The City will build upon ongoing efforts by utilizing new and existing data sources to advance resilience and racial equity across the city.” The existing data simply won’t tell the story, and so the city will need to find those new sources and incorporate them—and study the results. For years.

Jason Ewas, the executive director of the Economic Mobility Lab, tells me, “We’re going to put a stake in the ground and say that we’re going to study in general how people are moving up and down, or staying the same, and see if we can see why.” This is an explicit vision of tracking and improving economic mobility.

It’s not that the city will stop experimenting with programs or improving what it’s doing in the meantime. “We’re going to do [that] while researching,” Ewas tells me.

To me, the most interesting part of this is that the city is doing the research itself. Boston has numerous research institutions that could do such research but the city wants to take this on themselves. Will they find things that academic researchers would not uncover (either because of their perspectives or because of the data and actors they would have access to)? Or, will the city be unable to separate out their research arm from their political concerns?

Of course, perhaps these questions do not matter if Boston is able to successfully combat economic inequality. Many cities face these issues as they both try to keep up with the higher end of the globalized economy and serve residents who are far removed from the global elite.

Inequality starts young: education opportunities for 3-year-olds

A new book by education scholars highlights the differences in what 3-year-olds are doing with their days:

Only 55 percent of America’s 3 and 4-year-olds attend a formal preschool, a rate far below China, Germany and other power players on the global stage…

Parents who can’t afford preschool typically leave their kids with a grandparent or someone nearby. Some of these informal child-care providers do offer rigorous educational activities, but others just leave kids in front of the television. The quality is more haphazard, and there’s a higher risk the option won’t work out. The book chronicles the awful experience of one low-income family in New York City that had to make 25 different child-care arrangements for their daughter by her fifth birthday.

The inequality that begins before kindergarten lasts a lifetime. Children who don’t get formal schooling until kindergarten start off a year behind in math and verbal skills and they never catch up, according to the authors, who cite a growing body of research that’s been following children since the 1940s. In fact, the gap between rich and poor kids’ math and reading skills has been growing since the 1970s. The “left behind” kids are also more likely to end up in lower-paying jobs…

Many of these initiatives have support across the political spectrum. President Trump’s first budget includes a proposal to start America’s first paid parental leave program. On the campaign trail, Trump also pushed the idea of expanding the Child and Dependent Care Tax Credit to help make it more affordable for families to put their kids in quality preschool and childcare programs.

This would be a good example of how the Matthew Effect begins: small differences in younger ages lead to divergent outcomes and larger gaps later in life.

Bipartisan support for something? Better capitalize on this before polarization sets in.

Reading into a decreasing poverty rate, increasing median household income

Here are a few notable trends in the new data that shows the poverty rate is down in the United States and median household incomes are up:

Regionally, economic growth was uneven.
The median household income in the Midwest grew just 0.9 percent from last year, which is not a statistically significant amount. In the South, by contrast, the median income grew 3.9 percent; in the West, it grew 3.3 percent. “The Midwest is the place where we should have the greatest worry in part because we didn’t see any significant growth,” said Mary Coleman, the senior vice president of Economic Mobility Pathways, a national nonprofit that tries to move people out of poverty. Median household income was also stagnant in rural areas, growing 13 percent, to $45,830. In contrast, it jumped significantly inside cities, by 5.4 percent, to $54,834, showing that cities are continuing to pull away from the rest of the country in terms of economic success…

African Americans and Hispanics experienced significant gains in income, but still trail far behind whites and Asians.
All ethnic groups saw incomes rise between 2015 and 2016, the second such annual increase in a row. The median income of black families jumped 5.7 percent between 2015 and 2016, to $39,490. Hispanic residents also saw a growth incomes, by 4.3 percent, to $47,675. Asians had the highest median household income in 2016, at $81,431. Whites saw a less significant increase than African Americans and Hispanics, of 1.6 percent, but their earning are still far higher, at $61,858.

The poverty rate for black residents also decreased last year, falling to 22 percent, from 24.1 percent the previous year. The poverty rate of Hispanics decreased to 19.4 percent, from 21.4 percent in 2015. In comparison, 8.8 of whites, or 17.3 million people, were in poverty in 2016, which was not a statistically significant change from the previous year, and 10.1 percent of Asians, or 1.9 million people were in poverty, which was also similar to 2015…

Income inequality isn’t disappearing anytime soon.
Despite the improvements in poverty and income across ethnic groups, the American economy is still characterized by significant income inequality; while the poor are finally finding more stable footing following the recession, the rich have been doing well for quite some time now. The average household income of the the top 20 percent of Americans grew $13,749 from a decade ago, while the average household income of the bottom 20 percent of Americans fell $571 over the same time period. The top 20 percent of earners made 51.5 percent of all income in the U.S. last year, while the bottom 20 percent made just 3.5 percent. Around 13 percent of households made more than $150,000 last year; a decade ago, by comparison, 8.5 percent did. While that’s something to cheer, without a solid middle class, it’s not indicative of an economy that is healthy and stable more broadly.

Both of these figures – the poverty rate and median household incomes – are important indicators of American social and economic life. Thus, that both are trending in the right direction is good.

Yet, we also have the impulse these days to (1) dig deeper into the data and (2) also highlight how these trends may not last, particularly in the era of Trump. The trends noted above (and there are others also discussed in the article) can be viewed as troubling as the gains made by some either were not shared by others or do not erase large gaps between groups. Our understandings of these income and poverty figures can change over time as measurements change and perceptions of what is important changes. For example, the median household income going up could suggest that more Americans have more income or we may now care less about absolute incomes and pay more attention to relative incomes (and particularly the gap between those at the top and bottom).

In other words, interpreting data is influenced by a variety of social forces. Numbers do not interpret themselves and our lenses consistently change. Two reasonable people could disagree on whether the latest data is good for America or suggests there are enduring issues that still need to be addressed.

I disagree: Loop building boom a sign of “the re-urbanization of America”

An insightful analysis of the high-rise construction boom in Chicago’s Loop includes this claim about what all this new development means:

“It’s the re-urbanization of America,” said John Lahey, chairman of Solomon Cordwell Buenz, a Chicago-based firm that specializes in residential high-rises.

It’s also a shift in the urban map: The once-frayed edges of downtown, home to the poor and working-class, are now the glittering home of the affluent. Rental rates, while less expensive than on the coasts, still leave many priced out. City officials last month proposed a pilot program to generate affordable housing in gentrifying areas of the Near North and Near West sides as well as along Milwaukee Avenue. But changing the trajectory of the marketplace won’t be easy.

This is an interesting claim to make in Chicago. The “Super Loop” is indeed growing in population and tall buildings. But, the city as a whole is not doing so well. See the population loss. See the persistent problems – meaning, decades-long concerns – in numerous poor neighborhoods. See the slow population growth in the suburbs within the metropolitan region and also the emerging presence of urban issues (affordable housing, poverty, exclusion) in suburban areas.

A better description might be this: what is happening is the concentration of wealth in urban cores while outlying areas of cities and suburbs are suffering. The same process is happening in New York City, Miami, Seattle, San Francisco, and other major cities.

Mixing walkability with other concerns like inequality and building community

The concept of walkability can be tied to a number of other important urban concerns as illustrated by this conversation with a member of Chicago Community Trust:

Q: What’s driving the desire to make neighborhoods more walkable?

A: There are a number of factors but I think there’s more interest in being able to be in the community. It’s not just about walking. It’s about basic, human interactions, the surprise of bumping into people.

As we look to 2050 and see the increased reliance on technology and the diminishing opportunities for basic face-to face-interactions, walkable communities are going to become increasingly important as an essential pathway to building community. Neighborhoods and walkable communities — and the community infrastructure that supports them — will become even more important to facilitate the kind of neighborly interactions, chance meetings, and civic and community building that are so vital to our lives today…

I’ve lived here since 2003 and came from outside of the region. What a surprise it was that many suburbs don’t look like strip malls and housing subdivisions. You have really well-established communities like Oak Park, Aurora, Arlington Heights and Evanston, cities with important bones of more walkable neighborhoods or communities. That’s what Chicago and the region has going for it.

The challenge here is that in neighborhoods and suburbs, the patterns of development and reinvestment have been very uneven. You have haves and have-nots. The south suburbs have struggled with reinvestment for many years and the south and west sides of Chicago have grappled with it. When the Metropolitan Planning Council and the Urban Institute did a study on Chicago segregation, compared to the 100 largest regions we’re the fifth-most economically and racially segregated region. That, to me, is the biggest challenge.

This is a lot to ask of walkable communities. Does a walkable setup necessarily lead to such positive outcomes? Indeed, the last paragraph quoted above hints at this: the real difficult may not be walkability but rather uneven patterns of development and persistent residential segregation.

 

Putting a price tag on Chicago’s segregation

A new report from the Metropolitan Planning Council and the Urban Institute suggests Chicago pays a high price for segregation:

The seven-county area’s murder rate could be cut by 30 percent, its economy could churn out an additional $8 billion in goods and services and its African-American residents could earn another $3,000 a year if it could reduce racial and economic segregation to the median level for the nation’s largest metro areas.

And 83,000 more residents could have earned bachelor’s degrees, spurring another $90 billion in collective lifetime earnings…

While the seven-county region has seen a slow reduction in racial and economic segregation between 1990 and 2010, it remained fifth-worst among the nation’s 100 most populous metro areas in 2010, the most recent full census year, the study found. The region includes Cook, DuPage, Lake, Kane, Kendall, McHenry and Will counties.

While segregation might benefit some – typically those who already have power and resources – this study suggests it harms the whole. Viewing issues of race, class, and gender might come down to these different perspectives of society: is it a zero-sum game where someone must lose for others to get ahead or can the pie be made bigger for everyone to share from? Take, for example, a period of history that is often held up as a good one for the entire country. The decades following World War II involved economic growth for most Americans as well as social change (Civil Rights, addressing poverty in cities and rural areas, the Great Society, etc.). We can’t recreate that period – it was contingent on a variety of other factors including winning World War II (and decimated economies elsewhere in the world) and the pent-up demand for many things after both a major war and the biggest global depression – but we could aim for policies that would help many people at all.

A college degree leads to more geographic mobility

Americans with a college degree are more likely to leave where they grew up and end up in metropolitan regions:

Today, people with a college degree are more likely than they used to be to move to metropolitan regions with good jobs and other people like them, and this means both that those regions do better over time and that the return on that education is even greater. Almost half of college graduates move out of their birth states by age 30, according to Moretti. Only 27 percent of high school graduates do. As booming cities draw in new college-educated workers, employers seeking these workers follow, and cities continue to gain strength like magnets. This improves the prospects of everyone in the region, including those without college degrees. The working-class strongholds that once prospered without college-educated workers, on the other hand, are doing worse and worse, as computers and robots replace the workers whose jobs haven’t been sent overseas, and, as a result, an oversupply of labor brings down wages for everyone still there.

It’s not just that a college degree leads to higher earnings or more opportunities; it is also that people with college degrees tend to cluster in certain locations. Even in a world where technology could theoretically allow workers to be far away from their workplaces, the clustering in desirable cities of employers, cultural scenes, and places to live with a high quality of life is linked to education levels.

Another side effect of this clustering is that cities tend to have diverse and vibrant economies while smaller communities simply can’t access multiple options. Thus, even if a smaller community has a single thriving industry, this may not work well:

Focusing on one type of industry could be a successful strategy; Warsaw, Indiana, a relatively small town in the northern part of the state, is the orthopedic capital of America, with dozens of orthopedic device companies small and large located there and a bustling economy as a result. Elkhart, Indiana is the epicenter of the recreational vehicle industry, and manufacturers and suppliers are located there, creating good jobs when the economy is doing well. Cities and towns may be able to convince a cluster of a certain type of companies to locate there, and reverse their decline. “Every place has to look at its comparative advantage, and find a niche,” Ross DeVol, the chief research officer at the Milken Institute, told me.

Having lived near Elkhart during the financial crisis, such a strategy can look good in boom times but be disastrous in down times.

Looking toward the future, are there any particular industries or sectors that would be willing to spread out geographically in order to build stronger American communities? This might limit their profits or make it difficult to attract certain employees but could it be worthwhile to invest in smaller communities in the long run (either for the communities or also for a competitive advantage)? Even sectors like health care are finding it difficult to maintain facilities in small towns because of the advantages that consolidation and economies of scale offer.

Are we already to the point where people live in rural areas because (1) they are “stuck” there or (2) because they are already well-off and have the resources or option to live there?