Bostons BoomingBut for Whom? Building Shared Prosperity in a Time - - PowerPoint PPT Presentation

Building Shared

Boston’s Booming…But for Whom?

Wednesday, October 10, 2018 8:30-10:30 a.m.

Prosperity in a Time of Growth

#sharedprosperity

Key Indicators of Boston’s Economic Boom

Our state economy is growing. And it’s become more productive than the US overall.

United States Massachusetts

$60,000 $80,000 $100,000 $120,000 $140,000 1 9 7 7 1 9 8 1 9 8 3 1 9 8 6 1 9 8 9 1 9 9 2 1 9 9 5 1 9 9 8 2 1 2 4 2 7 2 1 2 1 3 2 1 6

Output per worker, adjusted for hours (Gross State Product/adjusted total employment)

Unemployment is low.

Boston-Camb-Newton (NECTA), 3.1% Massachusetts, 3.6% United States, 3.9% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 10.0% 11.0%

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Unemployment rate, seasonally adjusted. Bureau of Labor Statistics

4

Our state workforce has the highest share of college degrees.

MA, 44.7% U.S., 33.1%

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

MA NJ MD CT VA CO NY RI NH WA IL VT MN CA PA DE ME KS U.S. HI OR GA NE NC MT ND WI MI MO OH TX SD FL IA UT SC TN AZ AK IN AL OK NM ID WY KY LA WV AR MS NV

Share of workforce with a college degree or more, 2016

Source: Boston Indicators analysis of American Community Survey data.

Median income in Massachusetts is near top of the nation.

MA, $73,227 US, $61,372

$- $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 $80,000

MD WA NH CO HI MA NJ CT AK MN UT VA CA RI OR IL VT IA WI PA NY DE US AZ ID ND OH NE TX MT IN KS WY MI GA SD MO NV TN OK SC FL ME KY AL NC AR NM WV LA MS

Median household income, 2017

Local home values have skyrocketed, especially in Boston.

United States Massachusetts Greater Boston City of Boston

$- $100,000 $200,000 $300,000 $400,000 $500,000 $600,000

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Zillow Home Value Index, median values After the Great Recession, home values in Boston shot up faster than elsewhere.

Boston’s Middle Class Is Hollowing Out.

In 2018, can middle class renters realistically afford to live in Boston? Here’s the math… Median monthly rent: $2,613 Median annual rent: $31,356 Median household income: $61,267 At the median, rent costs 51% of income. Annual income needed for rent to be “affordable”: $104,520

In almost all neighborhoods, households earning median income cannot “afford” median rent.

Boston’s middle class is hollowing out.

30,073

• 15,172

43,202

• 20,000
• 10,000

10,000 20,000 30,000 40,000 50,000

Low-Income Middle-Income High-Income

Change in # of households by household income buckets, Boston, 1990-2014

Source: Boston Indicators analysis of American Community Survey-PUMS data. “2014” data is from 2012-2016 ACS 5-year estimates

The state projects middle-income jobs to grow more slowly.

Boston Workforce Development Area. Projected change 2014 to 2024.

• 2,000

4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000 Low Income Middle Income High Income

Net new jobs, total

0% 2% 4% 6% 8% 10% 12% Low Income Middle Income High Income

Net new jobs, percent

Source: Boston Indicators analysis of projections from the Executive Office of Labor and Workforce Development

Income Inequality Is Up.

$60,000 $80,000 $100,000 $120,000 $140,000

1977 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016

• Massachusetts. Output per worker, adjusted for hours worked

(Gross State Product/adjusted total employment) $66,737

$50,000 $55,000 $60,000 $65,000 $70,000 $75,000 $80,000

2 2 1 2 2 2 3 2 4 2 5 2 6 2 7 2 8 2 9 2 1 2 1 1 2 1 2 2 1 3 2 1 4 2 1 5 2 1 6 2 1 7

Median household income, Massachusetts, adjusted for inflation (2017 $)

Our state economy continues to grow. Except for recent increases, median income has been relatively flat since 2000.

Economic growth in Massachusetts has not been broadly shared.

Inflation-adjusted wages for workers at different points in the income distribution. Massachusetts. 1979 vs 2017

Source: Boston Indicators analysis of Current Population Survey data.

Income varies widely by race in Boston and Metro Boston.

$0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 $80,000 $90,000 Asian Black Hispanic Native American Some other race Two or more races White City of Boston Metro Boston

Median household income. 2016.

Source: Boston Indicators analysis of Current Population Survey data.

Poverty Persists.

9.3% Massachusetts, 10.5% 12.4% U.S. , 13.4%

6% 8% 10% 12% 14% 16% 18% 2 2 5 2 6 2 7 2 8 2 9 2 1 2 1 1 2 1 2 2 1 3 2 1 4 2 1 5 2 1 6 2 1 7

Percent of households below the official federal poverty threshold

Official period of Great Recession

Poverty is lower in Massachusetts, but remains elevated post-Great Recession.

Source: Boston Indicators analysis of American Community Survey data. No comparable data between 2000-2005.

But by a more accurate poverty measure, which factors in cost of living, Massachusetts is in the middle of the pack.

MA, 13.1%

0% 5% 10% 15% 20%

CA FL LA MS AZ GA NY NM NJ HI VA TX WV NC AR AL KY SC NV MD TN MA IL OR CT IN AK OK PA DE OH MI MO CO WA ND SD ME WY VT MT RI KS ID NE UT WI NH IA MN

Supplemental Poverty Measure, 2015-2017

Source: Boston Indicators analysis of US Census Bureau data

Wealth Disparities Are Growing.

We have a large, persistent racial wealth gap in the US.

Black, $17,409 Hispanic, $20,920 All People of Color, $13,324 White, $171,000 $- $50,000 $100,000 $150,000 $200,000 $250,000

1 9 6 3 1 9 8 3 1 9 8 9 1 9 9 2 1 9 9 5 1 9 9 8 2 1 2 4 2 7 2 1 2 1 3 2 1 6

Median family wealth by race/ethnicity, 1963-2016

Sources: Urban Institute calculations from Survey of Financial Characteristics of Consumers 1962 (December 31), Survey of Changes in Family Finances 1963, and Survey of Consumer Finances 1983–2016. 2016 dollars. No comparable data are available between 1963 and 1983. Black/Hispanic distinction within non-White population available only in 1983 and later. Asian and Native American not reported due to sample size constraints.

White Bostonians own homes at higher rates, even when controlling for income.

68% 45% 51% 41%

0% 10% 20% 30% 40% 50% 60% 70%

White Black Asian Hispanic or Latino

Middle-Income Households (80-120% of median income)

Greater Boston. Homeownership rates for working age households. 2014.

36% 12% 25% 7%

0% 10% 20% 30% 40% 50% 60% 70%

White Black Asian Hispanic or Latino

Low-Income Households (below 50% of median income)

Source: UMass Donahue Institute/Boston Indicators analysis of American Community Survey-PUMS data. 2012-2016 5-year ACS data. “Working age” is defined as 25-64 year old heads of household.

Economic Mobility is down.

Economic mobility has declined in Massachusetts.

Someone born in 1940 had a 91% chance of

• ut-earning

their parents.

91% 55%

40% 50% 60% 70% 80% 90% 100% 1940 1950 1960 1970 1980

Someone born in 1980 had a 55% chance of

• ut-earning

their parents.

Share of people earning more than their parents by age 30, by birth year. Massachusetts

Source: Chetty, R., et al. The Fading American Dream: Trends in Absolute Income Mobility Since 1940

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Bottom 10

1 San Francisco, CA 45.6 90 Roanoke Rapids, NC 34.81 2 Minneapolis, MN 44.9 92 Wilson, NC 34.32 2 Boston, MA 44.9 92 Macon, GA 34.32 4 Pittsburgh, PA 44.3 92 Montgomery, AL 34.32 5 New York, NY 44.1 95 Columbus, GA 33.99 5 Newark, NJ 44.1 95 Fayetteville, NC 33.99 7 Seattle, WA 43.9 97 Clarksdale, MS 33.44 8 Los Angeles, CA 43.0 97 Albany, GA 33.44 9 Washington DC 42.8 99 Greenville, MS 28.98 10 Sacramento, CA 42.7 99 Memphis, TN 28.98

Within the context of declining economic mobility nationwide, Boston ranks high relative to other U.S. cities.

Source: Boston Indicators analysis of back-end data provided by Chetty, Hendren, Jones and Porter, from “Race and Economic Opportunity in the United States: An Intergenerational Perspective.” Rank is among 100 largest CZ’s by size of Black population.

Average income percentile for adults raised in low-income households as kids (the 25th percentile). Rank among 100 largest commuting zones.

Source: Boston Indicators analysis of back-end data provided by Chetty, Hendren, Jones and Porter, from “Race and Economic Opportunity in the United States: An Intergenerational Perspective.” Rank is among 100 largest CZ’s by size of Black population.

Black White Hispanic

Income Rank Income Rank Income Rank Boston, MA $25,450 1 $28,020 4 $25,450 10 Washington DC $24,590 2 $27,160 7 $32,300 1 New York, NY $24,590 3 $30,590 1 $27,160 6 Baltimore, MD $21,990 11 $24,590 27 $24,590 16 Miami, FL $21,130 17 $26,310 13 $28,020 4 San Francisco, CA $21,130 21 $27,160 6 $28,020 3 Philadelphia, PA $20,260 33 $26,310 10 $21,990 61 Seattle, WA $21,130 22 $23,730 30 $23,730 32

Average individual income for adults raised in low-income households as kids (the 25th percentile). Rank among 100 largest commuting zones.

Among comparable U.S. cities, Boston ranks high for Black and White mobility and a bit lower for Hispanic mobility.

Source: Chetty, Hendren, Jones and Porter, from “Race and Economic Opportunity in the United States: An Intergenerational Perspective.”

Black male mobility is higher in Boston than elsewhere. BUT it’s still lower than White male mobility in almost every U.S. city.

250 500 750 1,000 1,250 1,500 1,750 2,000 2,250 2,500 2,750

OK WI VT IO ID AZ OR MT CO TX PA CA LO KS MI NE AR MS OH FL IN NV IL SD UT AL KT CT VA NM WY WA DE WV MN TN NJ GA AK MS NH SC NC RI NY ND MD ME MA HI OK ID TX FL AZ AR LA KT AL MS NV WY OR WV MS IN GA MT TN SD OH VA AK CO DE MI KS HI SC VT WA WI NC IO NM PA UT NH CA NE MD IL ND CT ME RI NY MN NJ MA

Massachusetts’s Black imprisonment rate is the second lowest among states.

Adult imprisonment rate per 100,000. State prisons. 2013.

BUT our Black imprisonment rate is higher than every other state’s White rate.

Source: Boston Indicators analysis of data from The Sentencing Project. “The Color of Justice.” Bureau of Justice Statistics and American Community Survey.

MA White, 81 White Males Black Males MA Black, 605

Local Action Areas for Building More Broadly Shared Prosperity

Local Action Areas for Building More Broadly Shared Prosperity

• Reduce incarceration rates/reform criminal justice system.
• Reduce housing costs.
• Expand labor force protections.
• Fix the jobs-housing mismatch/improve our transportation system.
• Improve quality/affordability of our education system (early ed, pre-kindergarten-12 education and

higher education).

• Eliminate racial bias.
• Reduce residential segregation.
• Support the creation of good jobs and provide workforce training ladders for those without bachelor’s

degrees.

• Support the establishment of strong social capital.
• Provide affordable, accessible, high-quality health care.
• Welcome new immigrants and provide supports to integrate them into our neighborhoods, schools and

local economy.

Thank you! www.bostonindicators.org

Opportunity in America: How can Big Data Help?

John N. Friedman Brown University & Opportunity Insights

§ We use big data to study how to revive the American Dream § Analyze a range of interventions, from childhood to adulthood

How Can We Revive the American Dream?

Note: Blue = More Upward Mobility, Red = Less Upward Mobility Source: Chetty, Hendren, Jones, Porter 2018

> $44.8k $33.7k < $26.8k Atlanta $26.6k Washington DC $33.9k San Francisco Bay Area $37.2k Seattle $35.2k Salt Lake City $37.2k Cleveland $29.4k Los Angeles $34.3k Dubuque $45.5k New York City $35.4k

The Geography of Upward Mobility in the United States Average Household Income for Children with Parents Earning $27,000 (25th percentile)

Boston $36.8k

Source: Chetty, Hendren, and Katz 2016; Chetty and Hendren 2016

§

Most of the variation in upward mobility is caused by differences in childhood environment

§

Children who move to a high upward mobility area when young earn more as adults

§

But those who move at older ages or in adulthood do not gain

Why Does Mobility Vary Across Neighborhoods?

$41K Average Income at Age 35 2 10 20 28 Age of Child when Parents Move Income Gain from Moving to a Better Neighborhood, by Child’s Age at Move

Source: Chetty, Friedman, Hendren, Jones, Porter 2018

$23K $29K $35K

Roxbury Crossing Savin Hill

$41K Average Income at Age 35 2 10 20 28 Age of Child when Parents Move Income Gain from Moving to a Better Neighborhood, by Child’s Age at Move

Source: Chetty, Friedman, Hendren, Jones, Porter 2018

Move at age 2 from Roxbury Crossing to Savin Hill à avg. earnings of $38,000 $23K $29K $35K

Roxbury Crossing Savin Hill

$23K $29K $35K $41K Average Income at Age 35 2 10 20 28 Age of Child when Parents Move Income Gain from Moving to a Better Neighborhood, by Child’s Age at Move

Roxbury Crossing Savin Hill

Source: Chetty, Friedman, Hendren, Jones, Porter 2018

$41K Average Income at Age 35 2 10 20 28 Age of Child when Parents Move Income Gain from Moving to a Better Neighborhood, by Child’s Age at Move

Source: Chetty, Friedman, Hendren, Jones, Porter 2018

Roxbury Crossing Savin Hill

$23K $29K $35K

§ People

Less poverty, higher employment rates, and higher education rates

§ Community

More social capital, and more two-parent families in the community

§ Schools

Higher test scores for children

§ But … roughly half of all variation in outcomes within a city cannot be explained by

traditional neighborhood measures

What are the Features of High-Mobility Neighborhoods?

The Price of Opportunity

20 40 60 80 Long-Term Outcomes 1000 1500 2000 2500 Median Two-Bedroom Rent

Roxbury Crossing Savin Hill West Cambridge

What IS a Neighborhood, Anyway?

• 0.06
• 0.04
• 0.02

0.00 Association with Poverty Rate 0.6 0.9 1.1 1.3 1.5 Distance (Miles)

• 2. Treatment
• 1. Diagnosis
• 3. Evaluation

Upward Mobility

A Precision-Medicine Approach to Improving Opportunity

Use Big-Data to Provide Targeted Diagnoses and Advice

• 2. Treatment
• 1. Diagnosis
• 3. Evaluation

Upward Mobility

A Precision-Medicine Approach to Improving Opportunity

Use Big-Data to Provide Targeted Diagnoses and Advice

Where are the places in greatest need? What policy approaches might be effective? When in a child’s life do disparities arise?

A Precision-Medicine Approach to Improving Opportunity

Use Big-Data to Provide Targeted Diagnoses and Advice

Work with local stakeholders on interventions Evaluate impact and disseminate lessons Scalable policies to increase mobility

• 2. Treatment
• 1. Diagnosis
• 3. Evaluation

Upward Mobility Where are the places in greatest need? What policy approaches might be effective? When in a child’s life do disparities arise?

Increasing Mobility with Big Data

§

Use big data to diagnose barriers in each area

§

Partner with cities and schools to design customized solutions

§

Social science analog of precision medicine

§

Increasing mobility requires local action

§

How to prescribe treatments when diagnoses differ across settings?

§

No “one size fits all” solution

Challenge Solution

50 60 70 80 90 100

• Pct. of

Children Earning more than their Parents 1940 1950 1960 1970 1980 Child's Year of Birth

The Fading American Dream

Percent of Children Earning More than Their Parents, by Year of Birth

Source: Chetty, Grusky, Hell, Hendren, Manduca, Narang (Science 2017)