Is the American Dream Just a Pipe Dream?

By Stephanie Allen, Project Assistant

In 1970, the percentage of American 30-year-olds who were earning more than their parents did at 30 was 92%. The percentage now is around 50%. That statistic hit me hard when I heard it on the Freakanomics podcast from January 18th (I got a bit behind in my podcast listening at the start of the year. I’ve been catching up during the last couple of weeks.).

In economic development, I think a lot about upward mobility and improving opportunities for prosperity. I wasn’t very surprised by that 50% number. What surprised me was the 92%. I was in college when the dot-com bubble burst and the job market wasn’t great when I graduated. When I was back on the job market again after my master’s degree in 2008, it was worse. I’ve been listening to people talk about the decline of the American dream my entire adult life. So, I didn’t find 50% surprising. What I found so surprising was that America actually used to be really good at this. Really, really good. Less than half a century ago 92% of 30-year-olds made more than their parents had! My jaw was on the floor. How did we lose so much ground so fast? And, more importantly, do we have any chance of regaining it?

Source: The Equality of Opportunity Project

The Equality of Opportunity Project addresses the first question in a paper from December of last year. They identify two important economic trends affecting incomes of people born in the 1980s relative to those of people born in the 1940s: lower growth rates in Gross Domestic Product and greater inequality in growth distribution. The paper concludes that while lower growth rates in the GDP play some role, it is the inequality in growth distribution that accounts for most of the drop. A smaller cohort of people benefit from growth today than benefited in the 1970s.

This suggests that in order to improve opportunities for prosperity we should focus not just on economic growth, but even more so on spreading the benefits of what growth there is around. 

The Equal Opportunity Project recently published work on the role of colleges in intergenerational mobility. There are some really interesting findings in this work, including their list of the top colleges by mobility rate—those who have large numbers of students who come from poor families and end up with high incomes. Topping the list is Cal State University – LA. Nine of the top ten are not-for-profit schools and of those only one is private (Pace University in New York). Four of the top ten are in the NYC metro; three are in southern California; three are in southern Texas. 

There is also a list of the top ten elite colleges that enroll the highest percentage of low- and middle-income students. UCLA tops that list, but is the only public school on the list. The data examined in this study confirm what most of us already presume, namely, that low- and middle-income students who attend top colleges end up earning almost as much rich students who attend the same college. Attending a top college seems to really boost an individuals’ chance at mobility. (For more on colleges and mobility, here are a couple articles from The New York Times: “Some Colleges Have More Students From the Top 1 Percent Than the Bottom 60,” “America’s Great Working-Class Colleges,” “Dreams Stall as CUNY, New York City’s Engine of Mobility, Sputters.”)

All this college data is interesting, but Raj Chetty, who is one of the principle investigators at The Equal Opportunity Project and who was interviewed on the aforementioned Freakanomics podcast, maintains that the biggest drivers of upward mobility have less to do with where we go to college and more to do with where we grow up. Chetty and his colleagues found that where you grow up plays a big role in your chances of upward mobility. They identified five significant factors that play a role in determining rates of upward mobility:

1) residential segregation – the more segregated a city, by income and by race, the lower the rates of upward mobility

2) income inequality – higher levels of inequality predict lower rates of upward mobility

3) family structure – growing up in a neighborhood with a lot of single parents is associated with lower rates of upward mobility (even for kids who grow up in two-parent households)

4) social capital – places with higher social capital have higher rates of upward mobility

5) school quality – places with better public schools have higher rates of upward mobility

Chetty is quick to point out that while there are significant correlations between the first four factors and rates of upward mobility, we’re still unsure about the causal mechanisms in those cases. But, that doesn’t mean that we can’t use this information to help us create policy that will lead to higher rates of upward mobility—that will help us recapture some of the American dream. And, we don’t need to create policy on the national level to do it. Many of these things can be addressed at the city, county, and state level. 

If you want to learn more about the findings, I suggest listening to the Freakanomics episode from January 18th “Is The American Dream Really Dead?” (or you can read the transcript of the podcast on the website). You can also check out these Equal Opportunity Project papers: 

• “The Impacts of Neighborhoods on Intergenerational Mobility: Childhood Exposure Effects and County-Level Estimates” 
• “Effects of Exposure to Better Neighborhoods on Children: New Evidence from the Moving to Opportunity Experiment”
• “Where Is the Land of Opportunity? The Geography of Intergenerational Mobility in the United States.” 

And here are some articles from the New York Times based on the data from some of these papers: 

• “The American Dream, Quantified at Last” 
• “The Best and Worst Places to Grow Up: How Your Area Compares,” which has a great interactive tool that lets you look at data from any U.S. county
• “An Atlas of Upward Mobility Shows Paths Out of Poverty” 
• “Why the New Research on Mobility Matters: An Economist’s View”

You can also check out one of our past posts: “The Growing Threat of Economic Immobility.”

Gay Marriage, Economic Development, and The Case for Inclusive Communities

By Ryan Regan, Project Associate

On June 26, 2015, the Supreme Court handed down an historic 5-to-4 decision in Obergefell v. Hodges, which declared that the Constitution guarantees a right to same-sex marriage. It is most appropriate and perhaps serendipitous that this long-sought victory for the gay rights movement in the United States was delivered during LGBT Pride Month and just days before the 46th anniversary of the Stonewall riots in New York. The morality of same-sex marriage has been and will be debated ad nauseam, but this blog post isn’t meant to wade into those waters. Instead, the purpose of this post is to make the case that tolerant, open, and inclusive communities are a step ahead of their peers in competing for jobs and talent in the 21st century. 

Dr. Richard Florida is a noted American urban studies theorist who is most well-known for his research around the “Creative Class,” a phrase he coined to describe the knowledge-based workers that he posited would be key to economic prosperity in a post-industrial world. Florida argues that the “three t’s” – talent, technology, and tolerance – are necessary foundational principles that communities must embrace in order to remain competitive in a new economy that is increasingly tied to high-tech sectors. 

The idea around the tolerance part of the equation is that talented knowledge workers who are driving the new economy are increasingly young, diverse, and tolerant, and these workers desire to live and work in communities that are accepting of their open-mindedness. When laid out that way, the tie between community economic development and marriage equality is quite clear, and I am not the only one who has noticed this before. 

While serving as governor of Rhode Island, recent 2016 presidential race entrant, Lincoln Chafee (D-RI), signed the Marriage Equality Act into law in 2013 in part on the basis that the legislation would bring economic development benefits to the state. His op-ed to the New York Times from 2013 cited Richard Florida’s “three t’s,” and Chafee went on to further state: “The talented workers who are driving the new economy — young, educated and forward-looking — want to live in a place that reflects their values. They want diversity, not simply out of a sense of justice, but because diversity makes life more fun. Why would any state turn away the people who are most likely to create the economies of the 21st century?” 

The business community understands the tie between diversity and inclusion and recruiting a talented workforce. As a whole, the business community has been unequivocal in their support for marriage equality. There were 379 corporations and employer organizations to sign on to an employers’ amicus brief to the Supreme Court urging the court to strike down state bans on gay marriage in Obergefell v. Hodges. Chambers of commerce from Durham to San Antonio to Seattle and plenty of places in between have since lauded the Supreme Court’s ruling. Recall that earlier this year major employers in Indiana along with the Indianapolis Chamber and the Indiana Chamber were vocal in their opposition to the original version of a controversial “religious freedom” bill that some argued could lead to discrimination against members of the LGBTQ community. 

Communities that have embraced public policies that value diversity & inclusion, including gay-friendly policies, are flourishing throughout the country and that is no coincidence. San Francisco and Austin are arguably the most gay-friendly cities in the country, and they check in at #1 and #2 respectively on the Milken Institute’s 2014 List of Best-Performing Cities. San Francisco is home to the Golden Gate Business Association (GGBA), the nation’s first LGBT Chamber of Commerce, and the Austin Gay & Lesbian Chamber of Commerce is noteworthy in its own right, boasting over 350 members and over 10,000 “likes” on the Chamber’s Facebook page. Forward-thinking cities like San Francisco and Austin understand the value of opening their community’s doors to the types of workers that will be key to maintaining economic competitiveness in the 21st century. 

Communities looking to remain competitive for talented workers and high-quality jobs need to be mindful about how the country’s evolving diversity affects their local community economic development strategies. Consider the fact that more than one-in-three American workers are Millennials (ages 18-34) and this generation recently surpassed Gen Xers (ages 35-50) as the largest generation in the U.S. workforce, according to a Pew Research Center study released earlier this year. Millennials are not just more racially diverse than all other generations, but perhaps more importantly, they embrace diversity and inclusion in a manner that transcends all other generations before them. Pew Research Center data from just last month noted that 73 percent of Millennials support same-sex marriage – by far the highest percentage of all U.S. generations. It is these workers who will define the U.S. economy for the foreseeable future. Communities looking to attract these young, bright minds have to be cognizant of the open-minded social values that this generation embraces. 

The only constant in life is change, and this mindset is beneficial to keep in mind across all walks of life, including the work we do at Market Street. The country continues to change and so too must your community’s approach to community economic development.

I Believe the Children Are Our Future, Even the Poor Ones

By Ranada Robinson, Senior Research Associate.

Since graduate school, I have had an interest in social norms, how to quantify them, and if it’s possible to intentionally steer them. Today, I came across a report from the Annie E. Casey Foundation, Data Snapshot on High-Poverty Communities and started thinking again of social norms. It’s one thing to live in poverty, and it’s another added layer when concentrated poverty is considered. Almost eight million kids under 18 in this country live in areas of concentrated poverty—or in census tracts with poverty rates of 30 percent or more. Children who live in concentrated poverty are likely to face food insecurities, live in households that have unstable housing, and lack health insurance coverage. They are also more likely than children who do not live in concentrated poverty to have high and detrimental levels of stress and behavioral and emotional problems that become normal to them and become daunting barriers to success. They are more likely to drop out of high school, which leads to repercussions that lead to cyclical or generational poverty, creating the same issues or normalcy for their children.

I still haven’t figured out the answer to my question of if social norms can be steered, but I do know that there are several things communities across the countries can do to buffer some of the effects of concentrated poverty. Here are a few examples:

• Blessings in a Backpack: I’m familiar with this program because my sorority chapter has provided this sort of assistance to elementary schools in the East Point and College Park areas of Georgia. The formal program serves close to 59,000 students in 390 schools in 35 states in the US and three other countries (Canada, Colombia, and Haiti). The premise of the program is to make sure that food insecure students who rely on school to eat have food to take home on the weekends. After the children are identified, they receive backpacks filled with ready-to-eat items such as cereal, juice boxes, and granola bars on Friday and they return the backpacks on Monday to be refilled for the next weekend. This program is one that pulls on my heart strings because research shows that students who have the food and nutrition perform better in school, academically and behaviorally.
• Programs that bring communities together to meet the needs of students: The program that comes to mind is the BRIGHTfutures program in our client community, Joplin, Missouri. To ensure that students were set up to succeed, they realized that building support structures was imperative. This program brings together the business community, non-profit organizations, the civic community, and the faith community to meet identified needs of individual students, from immediate needs such as supplies to more long-term needs such as tutors and mentors. Taking intentional and proactive steps to meeting the needs of students with community resources has helped the school system achieve higher graduation rates.
• Programs that ensure quality early childhood education: Early childhood education has proven time and time again to be an important part of a child’s growth. A client community that values well-rounded early childhood education is my hometown, Jackson, Mississippi. Developed by the Early Childhood Institute at Mississippi State University, the Excel by 5 program is a community-based certification that centers on parent training, community participation, child care, and health to help improve children’s overall well-being in those precious early years. There are 32 communities across the state that are certified.

While these are some best practices that I have seen in my work professionally and civically, there are many other programs out there that seek to address issues that stem from poverty. As John F. Kennedy once said, “Children are the world’s most valuable resource and its best hope for the future.” We have to pay attention today to the needs of our children to affect real change on the future of our communities. 

Live It and Give It: Social Capital

By Ellen Cutter, Director of Research.

I recently moved to Fort Wayne, Indiana for my husband’s job, and I’ve been truly taken with how easy it has been to meet friends and get involved.  Neighbors stopped in with food to introduce themselves when we moved in, others often take up the invitation to sit on the porch with a beer.  As we all know, not every place is this way. The notion of being an “open” community is an important concept in today’s economic development landscape in which communities compete for young talent. But, in the world of economic development research, it has, in the past, been difficult to gauge which communities excel at this and which fall behind. 

The Urban Institute’s National Center for Charitable Statistics recently expanded its content to include some interesting measures of social capital. Made popular by Robert Putnam and his books Bowling Alone and Better Together, social capital are the collective organizations, relationships, and actions that build communities by knitting people together and cultivating understanding and cooperation. The new NCCS data allows users to search by community for summary and detailed outputs relating to nonprofit and private foundation capacity, bonding social capital, and congregations. A quick search revealed that Fort Wayne has 12.28 social bonding organizations per 10,000 residents compared to only 3.84 in Chicago, my hometown. I was blown away – Fort Wayne: who knew? It’s great stuff, check it out. 

On that note, here is a list of 150 things you can do to build social capital, from Robert Putnam’sBettertogether.org at Harvard University’s Kennedy School of Government. Social capital is built through actions big and small every day, from connecting with neighbors to supporting local businesses. Ask yourself if you’ve done any of these things over the course of the last year. I’ve bolded my actions in the list below and have made a few mental notes for things I’d like to get involved in in the future.

Have fun!

1. Organize a social gathering to welcome a new neighbor
2. Attend town meetings
3. Register to vote and vote
4. Support local merchants
5. Volunteer your special skills to an organization
6. Donate blood (with a friend!)
7. Start a front-yard/community garden
8. Mentor someone of a different ethnic or religious group
9. Surprise a new neighbor by making a favorite dinner–and include the recipe
10. Tape record your parents' earliest recollections and share them with your children
11. Plan a vacation with friends or family
12. Avoid gossip
13. Help fix someone's flat tire
14. Organize or participate in a sports league 
15. Join a gardening club
16. Attend home parties when invited
17. Become an organ donor or blood marrow donor
18. Attend your children's athletic contests, plays and recitals
19. Get to know your children's teachers
20. Join the local Elks, Kiwanis, or Knights of Columbus
21. Get involved with Brownies or Cub/Boy/Girl Scouts
22. Start a monthly tea group (EC commentary: do margaritas also count)?
23. Speak at or host a monthly brown bag lunch series at your local library
24. Sing in a choir
25. Get to know the clerks at your local stores
26. Attend PTA meetings
27. Audition for community theater or volunteer to usher
28. Give your park a weatherproof chess/checkers board
29. Play cards with friends or neighbors
30. Give to your local food bank
31. Walk or bike to support a cause and meet others
32. Employers: encourage volunteer/community groups to hold meetings on your site
33. Volunteer in your child's classroom or chaperone a field trip
34. Join or start a babysitting cooperative
35. Attend school plays
36. Answer surveys when asked
37. Businesses: invite local government officials to speak at your workplace
38. Attend Memorial Day parades and express appreciation for others
39. Form a local outdoor activity group
40. Participate in political campaigns
41. Attend a local budget committee meeting 
42. Form a computer group for local senior citizens 
43. Help coach Little League or other youth sports – even if you don't have a kid playing
44. Help run the snack bar at the Little League field
45. Form a tool lending library with neighbors and share ladders, snow blowers, etc.
46. Start a lunch gathering or a discussion group with co-workers
47. Offer to rake a neighbor's yard or shovel his/her walk 
48. Start or join a carpool
49. Employers: give employees time (e.g., 3 days per year to work on civic projects)
50. Plan a "Walking Tour" of a local historic area
51. Eat breakfast at a local gathering spot on Saturdays
52. Have family dinners 
53. Run for public office
54. Stop and make sure the person on the side of the highway is OK
55. Host a block party or a holiday open house 
56. Start a fix-it group–friends willing to help each other clean, paint, garden, etc.
57. Offer to serve on a town committee
58. Join the volunteer fire department
59. Go to church...or temple...or walk outside with your children–talk to them about why its important
60. If you grow tomatoes, plant extra for an lonely elder neighbor – better yet, ask him/her to teach you and others how to can the extras
61. Ask a single diner to share your table for lunch
62. Stand at a major intersection holding a sign for your favorite candidate 
63. Persuade a local restaurant to have a designated “meet people” table
64. Host a potluck supper before your Town Meeting
65. Take dance lessons with a friend
66. Say "thanks" to public servants – police, firefighters, town clerk…
67. Fight to keep essential local services in the downtown area–your post office, police station, school, etc.
68. Join a nonprofit board of directors
69. Gather a group to clean up a local park or cemetery
70. When somebody says "government stinks," suggest they help fix it
71. Turn off the TV and talk with friends or family
72. Hold a neighborhood barbecue
73. Bake cookies for new neighbors or work colleagues
74. Plant tree seedlings 
75. Volunteer at the library
76. Form or join a bowling team
77. Return a lost wallet or appointment book
78. Use public transportation and start talking with those you regularly see
79. Ask neighbors for help and reciprocate
80. Go to a local folk or crafts festival
81. Call an old friend
82. Sign up for a class and meet your classmates
83. Accept or extend an invitation
84. Talk to your kids or parents about their day
85. Say hello to strangers
86. Log off and go to the park
87. Ask a new person to join a group for a dinner or an evening
88. Host a pot luck meal or participate in them
89. Volunteer to drive someone
90. Say hello when you spot an acquaintance in a store
91. Host a movie night
92. Exercise together or take walks with friends or family
93. Assist with or create your town or neighborhood's newsletter
94. Organize a neighborhood pick-up – with lawn games afterwards
95. Collect oral histories from older town residents
96. Join a book club discussion or get the group to discuss local issues
97. Volunteer to deliver Meals-on-Wheels in your neighborhood
98. Start a children’s story hour at your local library
99. Be real. Be humble. Acknowledge others' self-worth
100. Tell friends and family about social capital and why it matters
101. Greet people
102. Cut back on television
103. Join in to help carry something heavy
104. Plan a reunion of family, friends, or those with whom you had a special connection
105. Take in the programs at your local library
106. Read the local news faithfully
107. Buy a grill and invite others over for a meal
108. Fix it even if you didn’t break it
109. Pick it up even if you didn’t drop it
110. Attend a public meeting
111. Go with friends or colleagues to a ball game (and root, root, root for the home team!)
112. Help scrape ice off a neighbor’s car, put chains on the tires or shovel it out
113. Hire young people for odd jobs
114. Start a tradition
115. Share your snow blower
116. Help jump-start someone’s car
117. Join a project that includes people from all walks of life
118. Sit on your stoop
119. Be nice when you drive
120. Make gifts of time
121. Buy a big hot tub 
122. Volunteer at your local neighborhood school
123. Offer to help out at your local recycling center
124. Send a “thank you” letter to the Editor about a person or event that helped build community
125. Raise funds for a new town clock or new town library
126. When inspired, write personal notes to friends and neighbors
127. Attend gallery openings
128. Organize a town-wide yard sale
129. Invite friends or colleagues to help with a home renovation or home building project
130. Join or start a local mall-walking group and have coffee together afterwards
131. Build a neighborhood playground
132. Become a story-reader or baby-rocker at a local childcare center or neighborhood pre-school
133. Contra dance or two-step
134. Help kids on your street construct a lemonade stand
135. Open the door for someone who has his or her hands full
136. Say hi to those in elevators
137. Invite friends to go snowshoeing, hiking, or cross-country skiing
138. Offer to watch your neighbor’s home or apartment while they are away
139. Organize a fitness/health group with your friends or co-workers
140. Hang out at the town dump and chat with your neighbors as you sort your trash at the Recycling Center
141. Take pottery classes with your children or parent(s)
142. See if your neighbor needs anything when you run to the store
143. Ask to see a friend’s family photos
144. Join groups (e.g., arts, sports, religion) likely to lead to making new friends of different race or ethnicity, different social class or bridging across other dimensions 

And….the list stops there asking you to fill in more suggestions. Here are mine:

145. Socialize at the dog park
146. Strike up a conversation with the person next to you on your flight home
147. Support the ice cream man or food truck nearest you
148. Join a flash mob
149. Get involved with your young professionals organization
150. Attend a literature reading