A lovely day in the neighborhood.

Social scientists contend that the location in which a child grows up correlates with their adult fate.[1]  On the one hand, there is adult income.[2]  One experiment that ran from 1994 to 1998 offered people living in public housing the opportunity to enter a lottery.[3]  Winners in the lottery received vouchers to help pay the rent if they moved to other areas.  The children of lottery winners (if they moved early enough) far outpaced the children of losers in subsequent earnings.[4]

The sequential demolition of the vast Robert Taylor Homes in Chicago between 1995 and 1998 displaced both those who did want to move and those who did not want to move.  All had to go and all received housing vouchers.  Comparing those who moved—willingly or unwillingly—with those who remained behind, economists have found that a) those who moved were 9 percent more likely to be employed than those who remained behind; and b) they earned 16 percent more than those who remained behind.

Then there is life-span.[5]  Rich people have lived longer than poor people for quite a while.  At the start of this century the average billionaire lived 12 years longer than the average street-person.  Today the gap has widened to 15 years.  Social scientists (and, for all I know, anti-social scientists or just the John Frink, Jr.s of this world) have documented that there is a very uneven distribution of extra years among poor people.  The poor in some places live almost as long as the rich, but they die young in other places.  On average, poor men in New York City live for 79.5 years; poor men in Gary, Indiana live for only 74. 2 years.

The studies suggest that altering the habits and attitudes of poor people in the blighted areas could extend lives.  First of all, in the housing-voucher lottery, only one-fourth of the people who were offered the chance to join the lottery did so.  Those who did apply have been characterized as “particularly motivated to protect their children from the negative effects of a bad neighborhood.”  This means that three-quarters of the people offered the chance to join the lottery were not “particularly motivated to protect their children.”

Then, moving to a better neighborhood increased likelihood of being employed by only 9 percent.  That’s better than nothing, but it isn’t much of a bump.  Moving to a better neighborhood increased lifetime earnings by 16 percent.  How much is that in dollar figures?  It’s $45,000.  Spread over a possible 40 year working life, that’s $1,125 a year and about $0.55 per hour.  Is it worthwhile for a family to leave behind everyone they know, a “system” that they know how to navigate, for this kind of money?

Second, the rich live in healthier ways than do some poor people.  They eat better, they exercise more, they are less likely to be obese, they usually don’t smoke, and they are unlikely to use opiods.  Even demanding, stressful jobs don’t make them feel more stressed than do poor people.  Poor people often eat a poor diet, smoke, and don’t exercise (it’s hard running 5 miles if you’re a smoker). Diet propaganda, parenting education, anti-smoking campaigns, and adult exercise programs could make a big difference.

To an uncertain extent then, poverty is volitional, a choice.  See: Juan Williams.

[1] That raises a question: does the neighborhood itself cause this effect or do people with other characteristics and experiences just end up in certain kinds of neighborhoods?

[2] Given social class segregation, it isn’t readily apparent why this isn’t the same as saying that the social class in which a child grows up has a large effect on their adult income.  Maybe it’s just NewSpeak.

[3] Justin Wolfers, “Bad Neighborhoods Do More Harm Than We Thought,” NYT, 27 March 2016.

[4] However, another experiment found virtually no difference in outcomes between winners and losers.

[5] Neil Irwin and Quoctrung Bui, “Where the Poor Live in America May Help Determine Life Span,” NYT, 11 April 2016.

Inequality 6.

Does economic inequality matter? Citing Thomas Piketty’s book Capital in the Twenty-First Century, Neil Irwin argues that there is a “deepening consensus…that rising inequality of income and wealth is an important trend over the last two or three decades.”[1] Eduardo Porter regards these social ills as “an existential threat to the nation’s future.”[2] NB: Is he correct? However, a “trend” isn’t either a problem or a solution. It is just an observed movement. People assign meaning to trends. The meaning assigned reflects the ambitions, fears, and beliefs of the people doing the assignment.

What has caused the stagnation in most incomes? Since 1973 productivity growth in the American economy has slowed dramatically.[3] That is the principal cause of the stagnation in most incomes. According to the most-recent Economic Report of the President, the failure to maintain the productivity-growth of the pre-1973 period means that the average American family now earns $30,000 a year less than it would have earned. In contrast, the increase in income inequality over the same period accounts for $9,000 a year for the same family.[4]

Regardless of the causes of rising inequality, liberals see a correlation between rising inequality and social problems. The teen-age birth-rate in the United States is about seven times as high as in France. More than one in four children lives with a single parent. More than twenty percent of Americans live in poverty. Seven out of every thousand adults is in prison.[5] A child born to a white, college-educated, married woman has the same chance of survival as does a child born to a similarly-circumstanced woman in Europe. However, children born to non-white, poor, single women have a much greater chance of dying young. Mental illness is more common among poor people than among wealthy people. Between 2009 and 2013, 9 percent of people with incomes below the poverty level reported “serious psychological distress,” while only 1.2 percent of people earning more than $80,000 so reported.[6] NB: Hard to get ahead if you’re mentally ill. On the other hand, 91 percent of people below the poverty level did not report “serious psychological distress.” Why not? Shouldn’t you be all wrought-up over your miserable situation? “People in low-income households don’t live as long [as people in high income households].”[7] By one measure, where there is a great disparity in income, upper income people live almost two days longer for every one-point increase in income disparity. In places with high inequality, you can live eleven days less than in places with low economic inequality. “But what causes the drop in life expectancy is debatable.”

Why this social disaster in the midst of so much other success? The conservative argument offered by Charles Murray and others is that the welfare state itself undermined the character of its beneficiaries. The liberal argument offered by Eduardo Porter is that Americans have been guided by a shared disdain for collective solutions and the privileging of individual responsibility. Therefore, America had relied on continuing prosperity instead of a welfare state. When long-term economic troubles hit, many Americans plunged through the cob-web of a “safety net.”

[1] Neil Irwin, “Things Bernanke Should Blog About,” NYT, 31 March 2015.

[2] Eduardo Porter, “Income Inequality Is Costing The Nation on Social Issues,” NYT, 29 April 2015.

[3] Tyler Cowen, “It’s Not the Inequality; It’s the Immobility,” NYT, 5 April 2015.

[4] This suggests that the policy prescriptions of Bernie Sanders target the smaller source of Americans’ discontent.

[5] That is three times the rate of 1975.

[6] “Noted,” The Week, 12 June 2015, p. 16.

[7] Margot Sanger-Katz, “How Income Inequality Can Be Bad for Your Health,” NYT, 31 March 2015.