The Hedgehog Review: Vol. 15, No. 3 (Fall 2013)
Sprawl Is Not All
Reprinted from The Hedgehog Review 15.3 (Fall 2013). This essay may not be resold, reprinted, or redistributed for compensation of any kind without prior written permission. Please contact The Hedgehog Review for further details.
“Location, location, location," the real-estate agents' mantra, appears to have become the explanation of choice for economic mobility in early twenty-first-century America–or so one might conclude from the media reaction to an important study released by The Equality of Opportunity Project (EOP) this summer. That study landed smack in the middle of an expanding national discussion, and considerable poll-measured anxiety, about whether America is still the vaunted land of opportunity of its national mythology. The EOP report offers some valuable explanations for why it might not be. Unfortunately, many of its more interesting findings were blurred by a national media hungry for strong headlines and a sweeping, bottom-line explanation.
Looking at variations across the nation, the study's authors set out to determine what effects tax expenditures such as the Earned Income Tax Credit and the Child Tax Credit might have on intergenerational income movement. Perhaps not surprisingly, they found some striking differences. Children born into the bottom income quintile have much greater odds of reaching the top quintile in Salt Lake City (11.5 percent), Seattle (10.4), or New York (9.7 percent) than do similarly born children in Atlanta (4.0 percent), Indianapolis (4.8 percent), or Detroit (5.1 percent).
Why such differences? Well, it turns out that taxes, both tax credits for the poor and higher taxes on the affluent, do account for some variation, but not, the researchers found, that much. Other factors–cost-of-living differences, the average incomes in each of the 741 "commuter zones" they studied, and even race (at least taken by itself)–all proved to be less significant correlates of mobility than what the EOP found to be the big five: economic and racial residential segregation, income inequality, the quality of K-12 schools, social capital, and family stability.
The first two of these, and particularly residential segregation, received the brunt of attention from The New York Times, NPR, and other national media. Times columnist Paul Krugman drove home the point by noting that poor children in Atlanta, one of America's boom cities, had an even worse chance of climbing the economic ladder than those in economically devastated Detroit. Why? Because Atlanta was so spread out, Krugman summarized, that "job opportunities are literally out of reach for people stranded in the wrong neighborhoods. Sprawl may be killing Horatio Alger."
Krugman and others also drew attention to the study's finding of a strong correlation between income inequality and income movement, a correlation that would seemingly validate the Obama administration's frequently voiced concern that a shrinking middle class and growing income inequality are slowly shutting down opportunity.
Yet Reihan Salam, a senior fellow at the conservative R Street Institute, noted in his column for Reuters that Salt Lake City, Seattle, and Pittsburgh, three US cities with mobility rates close to those of highly mobile Norway and Denmark, have significantly higher levels of inequality than either of those Scandinavian countries. And more interesting, the low-mobility city of Atlanta has marginally less income inequality than does the high-mobility city of Pittsburgh. In other words, Salam says, "Inequality levels in the best-performing and worst-performing cities are in roughly the same ballpark."
So is sprawl or income inequality really more important than other factors–indeed, a mix of factors–that received relatively little attention in the initial media coverage of the study, including low crime rates, good schools, and "thick" social institutions such as churches and civic organizations?
The poor who must commute long distances to jobs, often relying on inadequate public transportation, definitely have a harder time moving up the economic ladder. But car-dependent Salt Lake City is no model of public transportation or residential density. What it has, among other things, is exemplary social capital, much of which derives from a vibrant, civically oriented Church of Jesus Christ of Latter-days Saints. Other cities with high mobility such as New York and Boston have a host of urban virtues in addition to their enviable residential density. It would seem that sprawl, while certainly unhelpful, is not the main thing standing in the way of today's Horatio Algers.