The Depressing Picture of Economic Mobility in America

Today's New York Times has a big article by David Leonhardt on a new study of income mobility with a bunch of interesting findings, the core of which is that, especially for middle-class and poor people, where you live matters tremendously to your chances of improving your economic station. Here's an excerpt:

But the researchers identified four broad factors that appeared to affect income mobility, including the size and dispersion of the local middle class. All else being equal, upward mobility tended to be higher in metropolitan areas where poor families were more dispersed among mixed-income neighborhoods.

Income mobility was also higher in areas with more two-parent households, better elementary schools and high schools, and more civic engagement, including membership in religious and community groups.

Regions with larger black populations had lower upward-mobility rates. But the researchers' analysis suggested that this was not primarily because of their race. Both white and black residents of Atlanta have low upward mobility, for instance...

In previous studies of mobility, economists have found that a smaller percentage of people escape childhood poverty in the United States than in several other rich countries, including Canada, Australia, France, Germany and Japan. The latest study is consistent with those findings.

Whatever the reasons, affluent children often remain so: one of every three 30-year-olds who grew up in the top 1 percent of the income distribution was already making at least $100,000 in family income, according to the new study. Among adults who grew up in the bottom half of the income distribution, only one out of 25 had family income of at least $100,000 by age 30.

Yet the parts of this country with the highest mobility rates — like Pittsburgh, Seattle and Salt Lake City — have rates roughly as high as those in Denmark and Norway, two countries at the top of the international mobility rankings. In areas like Atlanta and Memphis, by comparison, upward mobility appears to be substantially lower than in any other rich country, Mr. Chetty said.

I don't have all that much to add to this, other than to note that it's yet more evidence that bootstraps get you only so far. I'm sure that not even the Koch brothers themselves would argue that poor people in Atlanta just have less gumption than poor people in Seattle and that's why they don't do as well. When you have a combination of 1) poor people in a metropolitan area being concentrated together, and 2) an area where the population is spread out geographically, you wind up with people facing what the woman Leonhardt interviews for the story faces: a two-hour commute each way to get to a job. When poor people are disbursed throughout the area alongside middle-class people, they'll inevitably be closer to a greater number of businesses where they might work, not to mention the fact that the schools to which they send their kids will likely be better funded.

Some of this is produced by factors out of anyone's control—much of what makes Manhattan Manhattan, for instance, is that it's a lot of people packed onto a small island—but much if not all of it can be influenced by the policy choices we make, from zoning laws to transportation systems to school funding. When you look at the map of income mobility, it's striking how the worst areas are almost all in the South. As Kevin Drum says, "Poor kids don't exactly have a great chance in life no matter where they live, but in the South, they have almost no chance at all. If you take a look at the policy preferences of southern governors and legislatures, that's apparently exactly the way they like it."

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