Close to home: Social mobility and the growing distance between people and jobs

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Cross-posted on Brookings’ Social Mobility Memos Blog

Natalie Holmes and Alan Berube

Americans live near fewer jobs than they used to, which may be bad news for social mobility. Our recent report, “The growing distance between people and jobs in metropolitan America,” had one straightforward implication: commutes are getting longer. This puts more strain on infrastructure and more carbon into the atmosphere. But there are implications for opportunity, too.

Local jobs = opportunity

Having jobs nearby increases individuals’ likelihood of employment, and also tends to reduce the lengths of jobless spells. While employment doesn’t automatically protect against poverty, it makes a huge difference to the risk:

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Proximity to employment is especially important for low-income workers, who may have fewer choices about where to live, or how to get to work (given the cost of owning and maintaining a car). Finally, nearby jobs also support the local tax base for schools and other critical public services that support social mobility.

Jobs are declining faster near low-income people

Unfortunately, over the past decade-plus, jobs within an average commute distance dropped faster for the poor residents of both cities and suburbs:

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Between 2000 and 2012, poverty grew and re-concentrated in parts of metropolitan areas that were farther from jobs, particularly in suburbs, which are now home to more than half of the poor residents of the country’s 100 largest metro areas.

There is growing evidence that place matters for upward mobility. A landmark 2014 study by Raj Chetty and others found that intergenerational social mobility varies significantly across regions. Newer work by the same team suggests that the places in which children grow up independently affect their future earnings potential.

Atlanta and Seattle: A study in contrasts

Chetty and colleagues found that a child born at the 25th percentile of income in Seattle experienced a 12 percent earnings bump relative to the national average by age 26. In Atlanta, a child born into the same part of the income distribution earned 8 percent less than the national average as an adult. The researchers found that racial and income segregation, and long commute times, explained much of the difference in mobility across these and other areas.

Recent trends in job location within Seattle and Atlanta may also explain these mobility differences. In metropolitan Atlanta, the average resident of a poor neighborhood saw nearby jobs decline by 34 percent from 2000 to 2012. In metropolitan Seattle, by contrast, the decline for residents of poor neighborhoods was a more modest 9 percent. As the maps below illustrate these trends also vary within regions:

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Chetty: For more social mobility, think local

As Raj Chetty argued at a recent Brookings event, we must tackle social mobility at a local level, not just a national one. That must include connecting the residents of low-income neighborhoods to job opportunities in the broader region, as well as attracting better options locally. Improving proximity to jobs alone certainly won’t tackle our social mobility challenges, but it can ameliorate problems like segregation, concentrated poverty, and low-density sprawl that pose real barriers to economic progress for low-income kids and families.

How big (or small) is your city’s middle class?

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Cross-posted on Brookings’ Metro Blog, The Avenue

Alan Berube and Alec Friedhoff

Have American cities lost their middle class? The recent unrest in Baltimore caused some to (inaccurately) portray that city as overwhelmingly poor. Meanwhile, rising inequality and rapid gentrification in places like San Francisco and Seattle raise the concern that some cities are becoming exclusive enclaves for the wealthy.

Yet it turns out that many U.S. cities still retain a sizable middle class, at least judged by national standards. We took annual income data from the American Community Survey, which the Census Bureau publishes for all places with populations of at least 65,000. Comparing these city income data from 2013 to national data for the same year, we classified households in each city by the quintile (fifth) of the national income distribution into which they fell. Jump to the interactive data.

Two overarching patterns emerge. First, smaller cities look more like the nation than larger cities. Most (87 percent) of the cities for which the Census Bureau reports annual data have fewer than 100,000 households, but together they represent about the same number of households as cities with more than 100,000 households. Collectively, the smaller cities mirror the national income distribution almost exactly. In large cities, by contrast, both low-income (bottom 20 percent) and very high-income (top 5 percent) households are overrepresented.

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Second, city incomes look very different across U.S. regions. Households in Western cities have higher incomes than those nationwide, those in Midwestern cities have lower incomes, and those in Southern cities look about average. To be sure, these averages mask important differences among cities within regions—contrast Camden, N.J., where nearly half of households have incomes in the bottom fifth nationally, with Newton, Mass., where more than half of households are in the top fifth nationally. Nonetheless, these regional differences reflect the more expansive geography of many Southern and Western cities that enables them to take in more middle-income neighborhoods and households, as well as the deeper levels of inequality and segregation that have long affected cities and metro areas in the Midwest and Northeast.

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(Although not shown here, adjusting household incomes for differences in the cost of housing across metro areas tends to make city distributions in all regions look more equal, except in the Northeast, where they look somewhat poorer.)

These wider patterns aside, it is fascinating that the income distribution in several cities around the nation—Bayonne, N.J.; Bakersfield, Calif.; St. Paul, Minn.; and Fort Worth, Texas—resembles almost exactly the national distribution. Even Baltimore, which has more than its share of low-income households (29 percent), still places one-fifth of its households squarely in the middle quintile nationally. The interactive chart provides a quick snapshot of the household income distribution in 575 cities around the country, and can hopefully stimulate further informed discussion around the present condition and future prospects of the middle class in urban America.

Suburban Poverty in the Twin Cities Area

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Alan Berube

Last week I had the pleasure of meeting with several groups of stakeholders in the Minneapolis-St. Paul (MSP) area to discuss local trends in, and responses to, suburbanizing poverty in the region.

Patterns of poverty in the Twin Cities region, it turns out, are pretty typical of those in large metro areas nationwide. Today, nearly 60 percent of people living below the poverty line in the MSP area live outside the cities of Minneapolis and St. Paul. Between 2000 and 2013, their numbers rose a staggering 128 percent, compared to 37 percent in the two cities combined. Residents of the cities are still nearly twice as likely to be poor as their suburban counterparts, but that difference has narrowed in recent years.

In speaking with a diverse set of audiences in the region, I found that a few themes helped inform how leaders are approaching efforts to connect people to economic opportunity.

First, it’s about more than poverty, at least as the federal government defines it. The Twin Cities region is a relatively expensive place. According to the Bureau of Economic Analysis, MSP ranked in the top 10 percent of metro areas nationwide on regional prices. That’s why researchers at MIT conclude that the real costs of living in the region for a parent with one child—between food, housing, child care, transportation, and other necessities—top $40,000 a year, nearly three times the $14,000 federal poverty threshold. Different groups in the region are focused on bringing down those costs, or providing targeted subsidies, to help narrow the yawning gap between wages and prices for low-income working families.

Second, there’s an increasing recognition in the MSP area that communities should provide a range of housing options, not only to meet the needs of lower-income households, but also to avoid concentrating poverty in distressed neighborhoods. Participants at a convening of the Regional Council of Mayors described efforts to preserve affordable non-subsidized housing in their cities, a focus of the MN Challenge project. Suburban Washington County has worked with private and non-profit developers and local cities to build mixed-income housing at three transit-linked sites. Previously, we’ve profiled CommonBond Communities, one of the largest affordable housing developers in the region, which has an impressive track record of work in the suburbs. Debate continues, however, over the extent to which the region should target new affordable housing toward transit-oriented communities that lie primarily in the urban core.

Third, organizations working with low-income populations in the MSP area increasingly recognize the value of regional approaches. Compared to many other metro areas around the country, a relatively strong regional ethic prevails in the Twin Cities, exemplified by bodies such as the Metropolitan Council and Greater MSP. Second Harvest Heartland, one of the largest food banks in the United States, supports city and suburban food pantries across the MSP area, and is connecting to health providers and school districts to further scale its work. Workforce councils across the Twin Cities region are also beginning to collaborate more actively to enable sector-based partnerships and residents’ access to job opportunities outside their home communities.

While the challenges of suburbanizing poverty in the MSP region are all too typical, leaders throughout the area are mounting promising responses to help low-income families get ahead, regardless of their location. Those efforts bear watching.

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Best Starts for Kids: An Ounce of Prevention in King County, Washington

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Natalie Holmes and Alan Berube

We recently visited King County, Wash., the county in which Seattle sits. On many counts, the region is thriving. But while the city of Seattle grows jobs and incomes, suburban communities to its immediate south continue to grapple with elevated poverty and concentrated disadvantage. The gap between the region’s rich and poor continues to widen, which recent research suggests could hinder the economic mobility of low-income children and families.

Across the country, it’s local governments—counties and municipalities—that provide the bulk of services that affect our daily lives, and especially those of poor families. As cash-strapped local governments are asked to do more with fewer resources, they’re realizing the need to better coordinate and find alternatives to expensive late-stage public health and safety interventions, such as incarceration. At present, nearly three-quarters of King County’s general fund supports the criminal justice system.

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The county is attempting to shift its investments toward early-stage intervention through a new initiative, Best Starts for Kids. The three-part initiative would support pregnant women and young children with home health visits and screenings; track whether school-aged children meet “key developmental milestones;” and support communities through place-focused interventions. The goal, according to County Executive Dow Constantine, is to “sever the link between incomes and outcomes—to create a King County where the circumstance of one’s birth no longer defines the course of one’s life.”

Underlying Best Starts for Kids is the idea that an ounce of prevention is worth a pound of cure. Research from the University of Washington, cited by the initiative, suggests that significant brain development occurs in the first three years of life, and a child’s environment in her first two years can profoundly shape lifelong stress response systems. Poor children start behind, right out of the gate. This inequity ultimately affects all of us: According to Brookings’ Center for Universal Education, healthy development in early childhood is also an essential component of building and sustaining a skilled workforce.

Leaders in the region have long been ahead of the curve when it comes to establishing wraparound services and programs to tackle poverty. The City of Seattle recently passed a universal preschool program, which goes into effect this fall. Earlier this year, King County established a reduced-fare transit program to help make commutes more affordable for low-income workers. And the Road Map Project supports “cradle to college and career” readiness in seven of the region’s highest-need school districts, working collaboratively across suburban jurisdictions and Seattle’s southern neighborhoods.

Best Starts for Kids would complement these and other efforts in the region, and would be among the first of its kind nationally to comprehensively target early childhood development at such a large scale. The programs would be funded through a six-year, $65 million levy, which is headed to the ballot this November. As economic disadvantage increasingly locates outside the historical confines of inner cities, Best Starts represents a promising signal of stronger county leadership to address the root causes of poverty across urban and suburban lines.

Suburban Poverty in the US, in the UK

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Alan Berube

I had the chance to travel to London and Birmingham last week to speak to local audiences about the suburbanization of poverty in the United States. I was hosted by colleagues at the Smith Institute, who have studied this similar phenomenon in major English and Welsh regions.

The Smith Institute’s research shows that, as in the United States, most low-income people in England and Wales (57 percent) live in suburban areas. Poverty is defined differently in the UK, as are “suburbs,” (see the slides below) but some of the challenges facing poor individuals in UK suburbs–more limited access to transit, services, and jobs–mirror those facing their counterparts in America.

Nonetheless, many of the reasons that UK regions are exhibiting high and rising suburban poverty are distinct from those driving poverty’s suburbanization in U.S. regions. For one thing, suburbs in England contain large amounts of permanently affordable “social” housing. With the London Society, we toured the South Acton estate, in the suburban London borough of Ealing, which currently has about about 1,800 units of social housing, and is being redeveloped to contain 2,500 units of mixed-income housing. Representatives from suburban Birmingham local authorities such as Sandwell and Wolverhampton expressed concern over the lack of economic opportunities in and around their large council estates. By contrast, most American suburbs were originally developed for middle-class homeowners, and do not contain anywhere near this amount of permanently affordable housing, if they contain any at all.

Gentrification and affordability pressures also seem to be even more pronounced in Greater London than in most major U.S. metro areas. Greater London encompasses 33 separate boroughs, which are commonly separated into 12 “Inner London” boroughs closest to the urban core, and 21 “Outer London” boroughs that are more suburban in character. Since 2010, according to the Smith Institute, Inner London has added 500,000 jobs, while Outer London has added only 10,000 jobs. One only need gaze at the massive high-rise developments going up along the Thames River, or in the Old Street area of Islington/Hackney, to get a sense of the price pressures that are pushing more low-income residents into further-flung areas of the capital. Similar disparities may emerge in Birmingham, whose center-city is rapidly reviving while southern, manufacturing-focused areas of the city face deeper economic struggles.

Despite these differences, there were many points of connection in these dialogues with U.S. experiences around issues such as transit-oriented development, whether and how to invest in service delivery in suburbs, and the efficacy of raising minimum wages locally. Whether and when the UK invests in stimulating a “suburban renaissance” like the urban one it kick-started more than a decade ago may turn on the results of Thursday’s general election.

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Webinar: Where are jobs moving, and who lives near them?

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Download slides and audio from our recent webinar about a new Brookings Metro report, “The growing distance between people and jobs in metropolitan America.

Press to play webinar audio     

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Connecting EITC filers to the Affordable Care Act premium tax credit

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EITC ACA pic for CSPAThis tax season, for the first time, tax filers who receive the Earned Income Tax Credit (EITC) may also be eligible to claim a tax credit for health insurance premiums. Created as part of the Affordable Care Act (ACA), the premium tax credit helps offset the cost of health insurance for lower- and moderate-income taxpayers who purchased coverage through state or federal health insurance marketplaces. To better understand the number and types of workers and families that are likely to be eligible for the EITC and ACA credits, and to inform outreach efforts moving forward, a new Brookings Metro report estimates the overlap between these two populations.

Read the new report>>

Some cities are still more unequal than others—an update

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Inequality link for CSPAMore than five years after the end of the Great Recession, and three years since the Occupy movement took on Wall Street, high and growing levels of income inequality continue to animate debates on politics and public policy. A new Brookings Metro report updates a 2014 analysis of income inequality in the 50 largest U.S. cities, and examines in particular trends between 2012 and 2013, the most recent data available from the U.S. Census Bureau. It examines inequality through the lens of household incomes in those cities at the 95th percentile (i.e., the top 5% of earners), the 20th percentile (i.e., the bottom 20% of earners), and the gap between them.

Read the new report>>