Saturday, November 19, 2011

Stanford Study Finds American Neighborhoods Segregating by Income

A Forty Year Trend Leading to Lower Economic Growth – Except for You Know Who

The segregation of American society by race has been substantially reduced since the end of World War II, a great accomplishment for Americans and a positive development in human relations.  But since 1970 a Stanford University study funded by Brown University and the Russell Sage Foundation found that neighborhoods are becoming more segregated by income.  And that is not a positive development.

Jessica Kourkounis for The New York Times
The Germantown area of Philadelphia was
formerly considered solidly middle class but
is now mostly low income. "Everything started going
down in the dumps," a longtime resident said.

In 2007, the last year captured by the data, 44 percent of families lived in neighborhoods the study defined as middle-income, down from 65 percent of families in 1970. At the same time, a third of American families lived in areas of either affluence or poverty, up from just 15 percent of families in 1970.

This is not just an individual tragedy, it is a major obstacle for sustained economic prosperity and growth.  The basic economics of growth,  that somehow have continually escaped both the wealthy and those in policy making positions is that a strong and growing middle class is an absolute necessity for a strong and growing economy.

Sean F. Reardon, an author of the study and a sociologist at Stanford, argued that the shifts had far-reaching implications for the next generation. Children in mostly poor neighborhoods tend to have less access to high-quality schools, child care and preschool, as well as to support networks or educated and economically stable neighbors who might serve as role models.

All of this means that rising income inequality feeds upon itself, that in the absence of government policy to promote economic growth in the lower and middle income groups the problems will continue.

there is evidence that income differences are having an effect, beyond the context of neighborhood. One example, Professor Reardon said, is a growing gap in standardized test scores between rich and poor children, now 40 percent bigger than it was in 1970. That is double the testing gap between black and white children, he said.

And the gap between rich and poor in college completion — one of the single most important predictors of economic success — has grown by more than 50 percent since the 1990s, said Martha J. Bailey, an economist at the University of Michigan. More than half of children from high-income families finish college, up from about a third 20 years ago. Fewer than 10 percent of low-income children finish, up from 5 percent.

But of course the trend in policy is not good.  Government at all levels is moving to reduce rather than increase policies and programs designed to move lower income families and individuals into the middle class.  And the future of America will be like the Germantown area of Philadelphia

The Germantown neighborhood, once solidly middle class, is now mostly low income. Chelten Avenue, one of its main thoroughfares, is a hard-luck strip of check-cashing stores and takeout restaurants. The stone homes on side streets speak to a more affluent past, one that William Wilson, 95, a longtime resident, remembers fondly.

“It was real nice,” he said . . .  Theaters thrived on the avenue, he said, as did a fancy department store. Now a Walgreens stands in its place. “Everything started going down in the dumps,” he said.

This is the future that Conservative economic policy is generating and that progressive in both parties have been unable to stop.  And this future is not a concern of the Deficit Reduction Super Committee of the Congress.

1 comment:

  1. First, your article is a bit misleading, as the study was not on the whole population, but on families (that is, it ignored about a third of the population), and it doesn't consider the ramifications of the significant change in the % makeup of "families" over that period of time.

    Second, while the study was over a forty year period, what is missing is that most of the change in the "poor neighborhoods" occurred in the 1970s (see Table A1 2 of the report) which shows that of the 8.6% point change, almost 6% points of that were in the 1970s.

    From 1980 forward, the "low middle" + "upper middle" went from 56% to 43%, a drop of 13% points. Where did they go? "Poor" + "Low Income" increased by 3% points, while "High Income" + "Affluent" went up by about 9% points (I'm rounding). So the shrinking of the "low/upper" middle was largely due to their moving *up*, not down.

    Last, it appears to the extent that the premise is true, it appears to be within the context of minority families. That is, Black and Hispanic families seem to be the groups self-segregating (see Figure 2).