The United States has always had a problem living up to its own ideals. It has the obnoxious habit of speaking grandly of itself while being the exact opposite. For instance, as the writers of the Declaration of Independence were penning the words “all men are created equal” they had slaves saddling their horses and picking the cotton for their petticoats. There’s this idea in our American narrative that any poor person can work hard and live right and find their place in the society. We imagine that every American has the exact same opportunity to achieve the awesome ideals that encompass the American dream. The key word here is opportunity.
The Equality of Opportunity Project, a study conducted by researchers at Harvard University and the University of California Berkley, wanted to determine if government interventions like the Earned Income Tax Credit increased the chances that a kid will surpass their parents’ success or in the fancier terms of the researchers, whether “tax expenditures such as the Earned Income Tax Credit can increase the level of intergenerational income mobility in the U.S”. The researchers break down their work in the executive summary.
The study focused on kids born in 1980 and 1981, the lingering vestiges of Generation X. There are a lot of things that go into measuring someone’s upward mobility. They measured the pre-tax income for the parents and their children. The parents’ income was measured in between 1996 and 2000, at that time the Gen-X kids were between ages 18-22. And then they measured the income of those kids, Gen X, as adults in 2010-2011 when they were about 30 or 31. (About the age I imagined, as a child, that I’d be working as an inspiring English teacher for low-income students, living in lovely house, with my partner, and our wonderful adopted children.)
The researchers used the income from the parents and the income from the children to create two different measures of “intergenerational mobility” or if a kid will be able to create a grander American Dream than their parents achieved. The first was the difference between in “the expected economic outcomes between children from high-income and low-income families”. That accounts for the fact that obviously rich kids are going to be doing better than poor kids. The second indicator of mobility they called “absolute upward mobility” was focused on people who earn around $30,000 a year and measured their expected outcomes. Those families receive the Earned Income Tax Credit and/or the Child Tax Credit.
The study compared 741 “commuting zones” which includes the metropolitan area and a little bit of the surrounding rural area. Researchers found that the poorest kids in Seattle, Washington have similar economic outcomes to the middle-income kids in Atlanta, Georgia. While we’re talking about Atlanta, it’s not doing too hot compared to any city really. Atlanta (and Milwaukee) have “lower rates of mobility than any developed country for which data are currently available”. Let that sink in. Atlanta is the place where a kid is least likely to achieve that American Dream. Bummer.
As I mentioned before the researchers were trying to figure out if tax expenditures were related to the upward mobility of the Gen X-ers. They found that, yeah, mobility is linked to local tax rates, which determine how much the local and state government spends. They didn’t really find a strong link between the state’s Earned Income Tax Credit policies and mobility. That certainly explains how notorious spenders, like Seattle, can produce a future where kids can dream bigger than their parents. They also found that places with a concentration of African Americans, namely the South, were a lot less mobile than their counterparts, even for white people living in those concentrations. That means that race and geography also affect mobility.
And finally, the characteristics that predicted mobility better than anything else were related to social capital and family structure. Income inequality in the area is an indicator of an individual’s social capital. So, let’s just say you live in the city that ranked the highest in country for income inequality from 2005-2009 according to a report by the U.S. Census Bureau, then life for you ain’t gon’ be no crystal stair. And if you do live in that city, then you live in Atlanta and your mayor’s office hasn’t read that report by the U.S. Census Bureau, so he has “no comment” on it.
Mayor Reed has read this study that I just summarized. In his response on Huffington Post, he states that nearly 70% of children in the “bottom quintile” those who come from families that make $30,000 or less annually make it out of that income level, even if they don’t make it to the top 25%. I’d like to see more information about how he reached that determination, Mayor Reed needs to cite his sources, because I’m always interested in the measures someone uses. But, I’ll believe him. If that’s the case: good game, Atlanta!
Mayor Reed concludes with this passage, that I quote here in its entirety:
The serious problems caused by intergenerational poverty, stagnant wages and lack of opportunity are ones that we, as a nation, have ignored for too long at our own peril. In Atlanta, we need to continue to focus on supporting lower-income families who have escaped poverty to continue their upward movement. Those are challenges that we must address now, and as mayor of Atlanta, I am committed to doing so.
I think he’s absolutely right. We’ve got to address the challenges of racial segregation, inherited poverty, and a lack of economic opportunity across social strata (except for the wealthiest). But it seems like the way we’re approaching that is by focusing on increasing the tax base in Atlanta instead of creating opportunities for people in Atlanta who are struggling. If we just increase the average income and the median income by adding more middle-income and wealthy people…have we really done anything at all? Let’s get it together Atlanta. Atlanta doesn’t have to be the richest city in the USA. I’d aspire be the city for people who still believe in and can achieve the American Dream.