Research shows jobs not always a cure for poverty

Josh Boak
The Associated Press

BALTIMORE — A healthy dose of job growth has long been seen as a likely cure for poverty. But new research suggests that poor Americans are frequently left behind even when their cities or communities benefit from hiring booms.

When such cities as Atlanta and Charlotte enjoyed a job surge in the 20 years that began in 1990, for example, the job gains mostly bypassed residents — often African-American —who had been born into poverty.

That is among the findings of a study led by Raj Chetty, a Harvard economist whose newly launched Opportunity Atlas found no association between job growth and economic mobility for poor residents of the affected areas.

“Job growth is not sufficient by itself to create upward mobility,” Chetty said. “It’s almost as though racial disparities have been amplified by job growth.”

His finding challenges much of the conventional thinking of government officials, business executives and economists, that job gains are the surest way to lift up people in impoverished communities.

‘Jobs, jobs, jobs’: President Donald Trump pledged to save neglected towns through “jobs, jobs, jobs.” His 2016 presidential rival, Hillary Clinton, asserted that government investments to foster hiring would help create “an economy that works for everyone.” Governors and mayors have traded tax breaks for pledges by companies to create jobs in distressed communities.

But Chetty and his colleagues, whose atlas examined communities down to Census tract levels, found that economic mobility hinges more frequently on other factors. A person’s race, for example, plays a pivotal role. Economic mobility varied widely among people of different races who lived in the same neighborhoods in Los Angeles or Houston, among other places.

Additionally, living in neighborhoods with many two-parent families improves the likelihood of emerging from poverty — even when someone was raised by a single parent. Mobility is often greater for children who come from neighborhoods with higher-priced housing. And it’s generally better when a high proportion of adults in a neighborhood are working, according to the analysis by Chetty; economists Nathaniel Hendren of Harvard and John Friedman of Brown University; and researchers Sonya Porter and Maggie Jones of the Census Bureau.

Left out: In the two decades that ended in 2010, the Atlanta and Charlotte areas were flooded with jobs. But many of the people hired were moving to these areas, so people from poorer neighborhoods essentially got cut out of the boom.

Metro Pittsburgh, on the other hand, lost jobs between 1990 and 2010, yet its residents’ economic mobility improved as the area became a nexus for college graduates working in technology and health care.

In the Seattle area, the home of such corporate powerhouses as Amazon and Microsoft, both jobs and economic mobility grew over the same period.

Disparities exist not just among metro areas but also among neighborhoods within the same city, according to an Associated Press examination of the data in the Opportunity Atlas.

In Baltimore, the “Old Town” neighborhood near Johns Hopkins Hospital is a mecca of entrepreneurship. The number of jobs there surged 21 percent between 2004 and 2013, compared with job growth of just 3.4 percent nationally.

Yet the neighborhood is marked by abandoned storefronts, public housing and a 93 percent non-white population. More than half its residents live in poverty. And the Opportunity Atlas shows that a low-income child from that neighborhood is likely to become even poorer as an adult.

Part of the challenge is that even when poor communities manage to add jobs, residents who finally have reliable incomes often move to neighborhoods with less crime and better housing. They, too, tend to seek a better quality of life.