Boosting Economic Mobility: The Great Challenge of Our Time
By: What Works Cities
Tags: Cities, Data, Local Government, Covid 19, Economic Inequality

Boosting Economic Mobility: The Great Challenge of Our Time

The COVID-19 pandemic has heightened, and highlighted, the urgent need for solutions. Cities were already on the case.

By Maia Jachimowicz and Zachary Markovits

The American Dream has always been built around ideals of freedom and opportunity — the freedom to build a better life for oneself, and the opportunity to prosper through hard work. It is a dream that lies at the core of the American experience and the nation’s values. Yet this dream has become harder to realize over the last 40 years and, frankly, was never available to all equally. In just a few short weeks, the COVID-19 pandemic has exposed this reality and the fragility of millions of Americans’ livelihoods and ambitions — especially those of low-income workers and communities of color.

While American prosperity has risen to new heights since 1980, it has concentrated among a handful of people. The wealth possessed by the top one percent of households now exceeds the wealth of the bottom 80 percent. Importantly, this divide is also a racial divide — the wealthiest among us are overwhelmingly white, whereas the poorest are overwhelmingly black, Latino and Native American. Racially discriminatory policies and behaviors lie at the root of these disparities.

What makes the wealth gap especially challenging is that those at the bottom of the economic ladder are not only further away from those at the top, but they are finding it harder to even climb that ladder. Research from Opportunity Insights lays this out in more personal terms: a child born in the 1940s had more than a 90 percent chance of making more money than his or her parents by the time he or she reached adulthood. For a child born in the early 1980s, this chance had declined to just over 50 percent — hardly better than a coin flip.

As the U.S. economy has globalized, with wealth disparities growing larger and larger, life for many Americans has become defined by a state of precariousness. Even before the onset of the COVID-19 pandemic, two out of five Americans said they would have trouble meeting an unanticipated expense of $400 or more. Twelve percent of Americans would be unable to pay all monthly bills if such an expense arose. The reality is that millions of people work a full-time job, or even multiple jobs with overtime hours, but are not earning a living wage.

The Moral Challenge

What this means is that across the country, the dream of working hard to move forward has for many been replaced by a basic struggle for adequate food, housing and transportation. As Bob Herbert once wrote in a New York Times column, “It’s like running on a treadmill that keeps increasing its speed. You have to go faster and faster just to stay in place.” Incomes have stagnated while basic costs have risen. Worse yet, declines in economic opportunity — the ability to access jobs, earn money, and accumulate wealth — have disproportionately impacted people of color. Recent research has found that in 99% of U.S. neighborhoods, white boys who grow up on the same city block and attend the same schools as black boys will likely reach better economic positions in adulthood.

A side lot in Racine, WI, one of the cities in the What Works Cities Economic Mobility Initiative. Photo courtesy of What Works Cities.

Reversing decades of growing economic inequality is the great moral challenge of our time — and it is a challenge laid bare by the COVID-19 crisis. The pandemic is exacerbating American society’s deeply intertwined economic and racial inequalities. Low-wage workers were disproportionately among the more than 26 million people who suddenly found themselves jobless by mid-April. These workers have long been disproportionately people of color. And the virus is infecting and killing those in communities of color, in particular African-Americans, at alarming rates compared to other Americans.

Cities now find themselves on the frontlines of this public health crisis, just as they have long been on the frontlines of the country’s economic mobility crisis. Urgent public health and economic challenges faced by Americans are first and foremost tackled by state and local officials. This is nothing new. But now the stakes are even higher — poverty rates are likely to rise significantly because of the pandemic. The need to place equity at the center of all recovery efforts and identify solutions that boost economic mobility is imperative.

A Laboratory for Local Strategies

In our work across the country, we’ve seen how cities can act to accelerate economic mobility. Making decisions based on data — disaggregated by race and other characteristics — can give governments a clearer picture of disparate outcomes among residents in their communities and point to root causes. Funding programs that work can put individuals on a path to a better life. Policies that address systemic failures and discrimination can improve population-level outcomes. Attention and urgency from government officials can bring different levels of government and local organizations to the same table to build a better future for their community. Facilitating learning among local leaders — and, yes, providing a little flexible money — can drive real outcomes.

Foundational to all of this work is the ability to carefully evaluate the impact of policies and programs to understand which actions and conditions advance economic mobility for specific populations. Doing this kind of evaluative work is made possible when cities invest in building the capacity and the infrastructure — their data muscle — to collect, analyze, and apply data in their decision-making.

This is why last year, with the backing of some forward-thinking philanthropies, we at What Works Cities, along with our partners Results for America and The Behavioral Insights Team, launched the What Works Cities Economic Mobility Initiative. The basic idea is to give cities the opportunity and space to test the local levers that can be pulled to advance economic mobility, and to build the data infrastructure that’s needed to accelerate and sustain this kind of work.

Compared to federal and state policy and programs, we know a lot less about what works at the local level. And yet, our work has shown us that many mayors and other city leaders have long acted on supporting programs focused on improving their residents’ economic opportunities — and they are hungry to do more. With the added knowledge of what works to advance economic mobility for residents, positive change can be strengthened and sustained.

So we created a nine-city cohort designed to identify, test, adapt, and spread local strategies for advancing economic mobility. There are three pillars to the initiative. Each city receives innovation seed funding and expert support to develop and pilot programs with local partners. At the same time, cities receive direct technical assistance from our expert partners in the What Works Cities network to strengthen their ability to use data in making decisions that affect their residents’ lives — in other words, to help make a city’s decision-making DNA be rooted in evidence. Finally, a cohort learning model enables city leaders to share their progress and insights with peers around the country with the expectation that successful models can, and need to, spread.

Our starting point for this initiative is a framework for economic mobility based on what research shows is most likely to advance mobility. It focuses on six policy areas where cities, in partnership with their county and community stakeholders, can utilize the best data and evidence to make a real difference in people’s lives: education, economic stability & workforce, housing, community & social capital, health & well-being, and criminal justice.

Our economic mobility framework, with examples of city-level policy areas. Cities in the WWC Economic Mobility Initiative are piloting interventions associated with education, economic stability & workforce, and housing. Image courtesy of Behavioral Insights Team (BIT).

The inaugural cohort of nine cities is piloting interventions tied to improving outcomes in the first three areas — details are here.

Time for Change

With U.S. inequality at levels not seen since just before the Great Depression, successful local strategies to boost economic mobility are urgently needed. The Economic Mobility Initiative was designed to surface what works and then spread lessons among cohort members and across the country. This work began in Spring 2019, and has become even more urgent in the face of the COVID-19 pandemic and ensuing economic crisis.

In this time of great uncertainty and struggle, we must find and amplify effective local strategies for renewing the promise of the American Dream.