Job growth is no cure for a community’s poverty, study finds
A healthy dose of job growth has long been seen as a likely cure for poverty. But new research suggests that poor Americans are frequently left behind even when their cities or communities benefit from hiring booms.
When cities such as Charlotte, N.C., and Atlanta enjoyed a job surge in the 20 years that began in 1990, for example, the job gains mostly bypassed residents — often African American — who had been born into poverty.
That is among the findings of a study led by Raj Chetty, a Harvard economist whose newly launched Opportunity Atlas found no association between job growth and economic mobility for poor residents of the affected areas.
“Job growth is not sufficient by itself to create upward mobility,” Chetty said. “It’s almost as though racial disparities have been amplified by job growth.”
His finding challenges much of the conventional thinking — of government officials, business executives and economists — that job gains are the surest way to lift up people in impoverished communities.
President Trump pledged to save neglected towns through “jobs, jobs, jobs.” His rival 2016 presidential candidate, Hillary Clinton, asserted that government investments to foster hiring would help create “an economy that works for everyone.” Governors and mayors have traded tax breaks for pledges by companies to create jobs in distressed communities.
But Chetty and his colleagues, whose atlas examined communities down to census tract levels, found that economic mobility hinges more frequently on other factors. A person’s race, for example, plays a pivotal role. Economic mobility varied widely among people of different races who lived in the same neighborhoods in Los Angeles or Houston, among other places.
Additionally, living in neighborhoods with many two-parent families improves the likelihood of emerging from poverty — even when someone was raised by a single parent. Mobility is often greater for children who come from neighborhoods with higher-priced housing. And it’s generally better when a high proportion of adults in a neighborhood are working, according to the analysis by Chetty; economists Nathaniel Hendren of Harvard and John Friedman of Brown University; and researchers Sonya Porter and Maggie Jones of the Census Bureau.
In the two decades that ended in 2010, the Charlotte and Atlanta areas were flooded with jobs. But many of the people hired were moving to these areas, so people from poorer neighborhoods essentially got cut out of the boom.
Metro Pittsburgh, on the other hand, lost jobs between 1990 and 2010, yet its residents’ economic mobility improved as the area became a nexus for college graduates working in technology and healthcare.
In the Seattle area, the home of such corporate powerhouses as Amazon and Microsoft, jobs and economic mobility both grew over the same period. (Those gains have, in turn, caused home prices to jump to levels that could threaten continued economic mobility.)
Disparities exist not just among metro areas, but also among neighborhoods within the same city, according to an Associated Press examination of the data in the Opportunity Atlas.
In Baltimore, the Old Town neighborhood near Johns Hopkins Hospital is a mecca of entrepreneurship. The number of jobs there surged 21% between 2004 and 2013, compared with job growth of just 3.4% nationally.
Yet the neighborhood — which has a 93% non-white population — is marked by abandoned storefronts and public housing. More than half of its residents live in poverty. And the Opportunity Atlas shows that a low-income child from that neighborhood is likely to become even poorer as an adult.
Connecting its residents with employers has proved problematic, as it has in poor communities across the country. The disparity between residents and workers in the neighborhood suggests that the jobs have gone to people who either live in other, more prosperous neighborhoods or who commute from the surrounding suburbs.
For nearly four years, a program called Turn Around Tuesday has been trying to address this mismatch between employers and residents in the neighborhood.
Backed by the interfaith group Baltimoreans United in Leadership Development, the program seeks to match employers such as Johns Hopkins to workers who have lived in poverty, have struggled with drug addiction or have criminal records but who are regarded as qualified for a job.
Recently, about 40 people gathered in a church basement as Melvin Wilson, the co-director, offered a prayer before getting into the business of getting and holding onto steady work.
“Pray for jobs,” he said. “Though we’ve created 555 living-wage jobs, you know, as we know, God, that’s not enough.”
The gap in outcomes among Baltimore neighborhoods is hardly surprising to City Councilman Leon Pinkett, who represents a western slice of the city and has worked in economic development.
“What the data does for us,” he said of the research, “is that it validates all the things that we know to be true: that many of the residents of these communities start at a deficit, and little is done through policy or investments to assist them in closing that gap.”
Part of the challenge is that even when poor communities manage to add jobs, residents who finally have reliable incomes often move to neighborhoods with less crime and better housing. They, too, tend to seek a better quality of life.
Octavia Mason, 53, has attended Turnaround Tuesday for the last nine months. She is a dedicated mother to her adult children, yet she lost her license as a pharmacy technician after a broken marriage led to drug use. She’s now on the path to regain her license and find work. But she hopes to leave the western Baltimore neighborhood where she grew up, which has stagnated because of unemployment, crime and a breakdown in trust.
“There’s a lot of families that aren’t working — and you’ve got generations of that, and that’s their normal,” she said.
Boak writes for the Associated Press.
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