WASHINGTON (NNPA) – In last week’s State of the Union Address, President Barack Obama declared, “…Our success should depend not on accident of birth, but the strength of our work ethic and the scope of our dreams.” The operative word was “should.” A recent study by a team of Harvard University and University of California-Berkeley researchers and others confirm that the birth lottery still rules the day. The report states, “Contrary to popular perception, economic mobility has not changed significantly over time; however, it is consistently lower in the U.S. than in most developed countries. It also said two studies found, “Upward income mobility varies substantially within the U.S. Areas with greater mobility tend to have five characteristics: less segregation, less income inequality, better schools, greater social capital, and more stable families.”
In other words, we have not reached the point where the strength of our work ethic and the scope of our dream dictate our success.
“The Equality of Opportunity Project” is a two-part study that examines intergenerational mobility over time and over geography. The first paper studies the correlation between the incomes of today’s 30-somethings and their parents’ income between 1996 and 2012, and then compares the data across the country.
The second paper studies time trends by comparing the incomes of citizens born between 1971 and 1993, to the incomes of their parents. (For those born after 1986, the researchers compare their probability of attending college and their parents’ income).
“Intergenerational mobility varies substantially across areas. For example, a child born in the bottom fifth of the income distribution has a 7.8 percent chance of reaching the top fifth in the U.S. as a whole,” the report states. “But in some places, such as Salt Lake City and San Jose, the chance of moving from the bottom fifth to the top fifth is as high as 12.9 percent. In others, such as Charlotte and Indianapolis, it is as low as 4.4 percent.”
According to the data, five factors have the greatest influence on mobility: racial and income segregation; income inequality; primary school quality; social connections and community involvement; and family structure.
In areas with the most depressed mobility, these five factors coalesce to form a perfect storm. Income inequality spurs economic segregation; and since race and class are sometimes inextricable, racial segregation arises. Property taxes support schools, so the quality level of a primary school often reflects its neighborhood’s wealth (or lack thereof). Family structure refers to concentrations of single-parent households. Single-parent households tend to have less income than two-parent households, and also tend to have less time to be involved in community affairs.
To clarify, these factors only serve as indicators on a community level. In other words, an individual’s chance at mobility is not tied to his or her family circumstances, but rather to the overall circumstances of his/her hometown. In the case of many African American communities, it is the isolation from jobs, infrastructure, resources, and the influence of more affluent citizens that creates depressed mobility. Such communities stunt successful outcomes for its residents (of all races and incomes).
“These results suggest that it is the isolation of low-income families rather than the isolation of the rich that may be most detrimental for low income children’s prospects of moving up in the income distribution.” The paper states, “One explanation of this correlation is that the separation of the middle class from the poor reduces beneficial peer effects or funding for local public goods (e.g., schools) for children from low-income families. In contrast, the separation of the affluent from the middle class may not directly harm low income individuals.”
In some commuting zones (CZs), which are like metropolitan areas but also include surrounding rural areas, children born to parents in the bottom fifth income level have less than 3 percent chance of earning their way to the top fifth. This is significantly lower than the national mobility average, and the rates of other developed nations.
Among the 50 biggest CZs, Charlotte, Milwaukee, and Atlanta have the lowest mobility. San Jose, San Francisco, and Washington, D.C., have the highest. Geographically, the Midwestern states beyond the Great Lakes have the highest mobility rates. (Racial segregation—one the strongest correlates of depressed mobility—is less of an issue in these states, where at least 95 percent of the population is White). The Southeast has particularly low mobility; 55 percent of all Blacks live in the South.
Senior researcher, Sarah Abraham noted, “As a family at the 25th income percentile, whether your child grew up in Salt Lake City or Charlotte makes a difference of over $8,000 on their expected income at age 30.”
For example, the average child reared in Charlotte in a 20th percentile household (making $26,000 per year) will end up in the 34th percentile (making $41,000 yearly) by the time he or she is 30. Of all the children born in the same circumstance, only 45 percent will earn their way beyond the 40th percentile ($48,000 yearly, or more).
Conversely (and to illustrate the difficulty of upward mobility in this CZ), the average child born in an 80th percentile household (making $109,000 per year) will fall to the 58th percentile (making $71,000 yearly) by 30. In this scenario, only 32 percent will be able to climb the one level above their parents, into the top 20th percentile.
For people raised in the 80th percentile in Charlotte, the mobility rate is two to three points lower than the national rate.
“The southeast generally has severe residential segregation across both income and races. You can also measure the average commute times in a place, and find that places where people have longer commutes have worse mobility. Southern cities generally exhibit sprawl,” Abraham explains.
In Newark, which has the ninth highest mobility among the country’s largest 50 CZs, the average child born into the 20th percentile will end up in the 43rd percentile (making $52,000 per year). Of all the children born in this same circumstance, 77 percent will grow up to earn more than their parents.
The paper concludes that “the fact that much of the spatial variation in children’s outcomes emerges before they enter the labor market suggests that the differences in mobility are driven by factors that affect children while they are growing up.”
The project makes it clear, however, that the key to improving upward mobility for all Americans – particularly those in the middle class – lies in creating diverse, well-planned, supportive communities.
“There are two broad conclusions from our research that we believe should be taken into consideration as guide future research and policies,” Abraham says. “First, our study shows the importance of early intervention, as the patterns of inequality emerge well before students enter the labor market, even as early as their teenage years…. Second, America does not have uniform mobility but rather significant amounts of spatial variation, and as such we might consider targeting limited funds at specific areas to alleviate persistent inequality.”