Sunday, January 26, 2014

Last Call For The American Dream

Income mobility in the United States depends very, very much on where you live.  If you're poor in a state like Utah, you've got opportunities.  If you're poor in a state like South Carolina, you basically have no chance.  The results from a landmark study looking at where the best and worst metro areas to be poor in America shouldn't shock anyone.

It's no surprise then that the worst states to be poor in are the Carolinas and Georgia.  Your odds of moving up in the world when you're poor in those areas are 1 in 4, maybe 1 in 3 at best.  It's twice that in other parts of the country.  Salt Lake City is number one, and Charlotte is dead last (yes, even worse than Detroit.  So is Raleigh, Indy, and Atlanta.)

What do these areas with the least mobility have in common?  The Altlantic's Matthew O'Brien:

1. Race. The researchers found that the larger the black population, the lower the upward mobility. But this isn't actually a black-white issue. It's a rich-poor one. Low-income whites who live in areas with more black people also have a harder time moving up the income ladder. In other words, it's something about the places that black people live that hurts mobility. 
2. Segregation. Something like the poor being isolated—isolated from good jobs and good schools. See, the more black people a place has, the more divided it tends to be along racial and economic lines. The more divided it is, the more sprawl there is. And the more sprawl there is, the less higher-income people are willing to invest in things like public transit.  
That leaves the poor in the ghetto, with no way out for their American Dreams. They're stuck with bad schools, bad jobs, and bad commutes if they do manage to find better work. So it should be no surprise that the researchers found that racial segregation, income segregation, and sprawl are all strongly negatively correlated with upward mobility. But what might surprise is that it doesn't matter whether the rich cut themselves off from everybody else. What matters is whether the middle class cut themselves off from the poor. 
3. Social Capital. Living around the middle class doesn't just bring better jobs and schools (which help, but probably aren't enough). It brings better institutions too. Things like religious groups, civic groups, and any other kind of group that keeps people from bowling alone. All of these are strongly correlated with more mobility—which is why Utah, with its vast Mormon safety net and services, is one of the best places to be born poor. 
4. Inequality. The 1 percent are different from you and me—they have so much more money that they live in a different world. It's a world of $40,000 a year preschool, "nanny consultants," and an endless supply of private tutors. It keeps the children of the super-rich from falling too far, but it doesn't keep the poor from rising (at least into the top quintile). There just wasn't any correlation between the rise and rise of the 1 percent and upward mobility. In other words, it doesn't hurt your chances of making it into the top 80 to 99 percent if the super-rich get even richer. 
But inequality does matter within the bottom 99 percent. The bigger the gap between the poor and the merely rich (as opposed to the super-rich), the less mobility there is. It makes intuitive sense: it's easier to jump from the bottom near the top if you don't have to jump as far. The top 1 percent are just so high now that it doesn't matter how much higher they go; almost nobody can reach them. 
5. Family Structure. Forget race, forget jobs, forget schools, forget churches, forget neighborhoods, and forget the top 1—or maybe 10—percent. Nothing matters more for moving up than who raises you. Or, in econospeak, nothing correlates with upward mobility more than the number of single parents, divorcees, and married couples. The cliché is true: Kids do best in stable, two-parent homes.

It's a stark reminder that Oh, and locally, Cincinnati, Columbus, and Indianapolis are all in the bottom 10 cities for mobility.  Ohio is nearly as bad as the Carolinas and Georgia.  If you're poor here, you're going to stay poor.   Why?  We refuse to invest in our cities, our infrastructure, and our people.  The Republican plan to fix all this?  Cut taxes on the rich and corporations, so there's even less revenue to invest, cut investment in schools, transportation and public safety, and inequality gets worse.  Meanwhile, the rich take their social capital and move to the exurbs, or as with Cincy, gentrified downtown areas and price out the poor.

There are developing nations with better income mobility than Charlotte.  Because America, right?

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