Reaching upward: Income mobility and access

4 years ago ccwa 3

mobilityA landmark new study on income mobility in America made its rounds on the Internet last week, even garnering a clever interactive New York Times piece. The Equality of Opportunity Project, as it’s called, has made waves outside of the usual economic discussion circles not only because of its scope, but also because of its potential implications for policymakers.

The study looked at the earnings records of millions of families from across the US over a span of about 30 years, in an effort to determine how children’s incomes differed from their parents’. The results are too huge to summarize easily, but two things struck me: First, location seems to be extremely important. Areas in which low-income people are segregated in suburbs far away from the city have very poor income mobility. Second, low-mobility areas are disproportionately clustered in the South.

These findings are true even after controlling for factors like average local income, demographics, and cost of living. Looking at a map of the study’s findings, I was amazed how states like Georgia, North Carolina and Alabama were awash in low-percentage red. This was surprising to me – reading the popular literature on poverty you’d suspect that poor intergenerational mobility was a general phenomenon, a product of increasing national income inequality. But while inequality is correlated with poor mobility, it’s far from the only factor.

One of my favorite economists, Amartya Sen, likes to talk about a “capability approach” to ethics, looking not only at peoples’ standard of living but their ability to achieve their goals, be that protecting their family, expressing themselves freely or finding a job. I think this study shows why that approach is so important.  Income distribution may be an important metric, but it is merely a symptom of deeper problems.  The fundamental issue is one of access. If low-income people can’t find jobs anywhere nearby, if the local property tax-funded school system is poor, and if there isn’t an adequate public transport system, then there’s little hope for advancement. This is just as true in suburban Atlanta as it is in rural West Virginia, even though the former may appear much economically healthier than the latter.

Cities like Atlanta and Charlotte may have worse mobility than New York or Chicago because their location lends itself to suburban sprawl, but the segregation of cities into wealthy urban areas and distant poor suburbs is very much the product of choice, not just geography. Metro and bus systems could be improved, but some well-off people (who comprise a disproportionate share of the voting public) have little incentive to support investment in public transport if it wouldn’t benefit them directly and would change the demographics of their neighborhoods and workplaces. Their arguments are usually couched in terms of “preserving local character” and “preventing urban blight”, never explicit appeals to class or race, but are no less reprehensible for it. To me, the gentrification of modern cities often seems like the 1950s “white flight” to the suburbs, only in reverse. Both had reasons beyond race, certainly, but the question of race is inseparable from them, and both were engineered to benefit rich white people without considering others. As Ta-Nehisi Coates put it, the ghetto is public policy.

That said, there’s no easy solution here. The Equality of Opportunity project doesn’t point to some incontrovertible cause of poverty, and even if it did, economic policy is never as simple as providing a prescription for a problem. Poverty is a phenomenon tangled up in a whole web of socio-cultural issues that must be negotiated. But I think this study at least makes the case that location and access are critical, and will hopefully reshape the way that we talk about poverty in the US.

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by Max Mauerman

(photo credit: equality-of-opportunity.org)