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Baltimore and the 50-Year American Failure on Jobs

May 6, 2015

If nothing else, today's conservative movement may be the greatest talking point generator in American history. Judging by the conservative choir now singing in unison, the aftermath of the sometimes violent protests in Baltimore is providing just the latest case in point. The tried and untrue sound bites predictably include GOP favorites like "blame the Democrats" (for example, Rich Lowry and Rudy Giuliani), "blame the failed 50-year War on Poverty" (Paul Ryan and Marc Thiessen), "blame African-American culture and values" (David Brooks and Rand Paul) and "blame the teachers' unions" (Dan Senor and Charles Krauthammer).
But at the heart of the incendiary situation in Baltimore and other once-great cities of America's industrial heartland is our single greatest national failure of the past 50 years. In a nutshell, jobs--good paying, often unionized jobs that once enabled millions of working Americans to join the middle class--have disappeared. The cities that once powered the "arsenal of democracy" to victory in World War II and fueled the prosperity of the 1950's and 1960's weren't just battered by global competition. The neighborhood segregation that greeted the Great Migration of African-Americans from the South in places like Chicago and Baltimore was accelerated by the "white flight" to the suburbs which left America's manufacturing centers depopulated, decrepit and delineated by race. And as the data from both urban and rural areas show, Washington's anti-poverty programs have helped prevent the immiseration and hopelessness of America's persistent pockets of poverty from being even worse.

The table above helps tell the tale. Since 1950, many of America's greatest cities have undergone staggering declines. In Detroit and Cleveland, St. Louis and Buffalo, Baltimore and Pittsburgh, the pattern is eerily similar. After reaching their peaks in 1950, the cities generally enjoyed a post-war boom that lasted into the early 1960's. But as recovering competition from Europe and Japan was joined by manufacturing losses to developing economies, the 1970's saw the dramatic contraction of America's manufacturing powerhouses.
That tragedy is reflected in the list of the companies with the largest American workforces in 1955 and today. In the 1950's, the Big Three automakers represented two of the top five employers in the country. But sixty years later, GM, Chrysler and the other industrial heavyweights were a shell of their former selves. U.S. Steel had 268,000 workers in 1955; by 2014 the number was down to 43,000. In their place, low-paying retail giants, national grocery store chains and fast food brands like Wal-Mart, Target, McDonald's and Kroger top the list:

Baltimore is no exception. As E.J. Dionne explained in the wake of the Freddie Gray protests, "Baltimore has tried to do its best in a post-industrial economy, but when work disappears, the results can be catastrophic."

Baltimore and its inner suburbs were once home to the vast manufacturing facilities operated by Bethlehem Steel, General Motors and Martin Marietta, notes Thomas J. Vicino, the author of "Transforming Race and Class in Suburbia: Decline in Metropolitan Baltimore." In 1970, about a third of the labor force in Baltimore and its first-tier suburbs was employed in manufacturing. By 2000, only 7 percent of city residents had manufacturing jobs, and the losses have continued since. An awareness of this, Vicino says, should shape our understanding of what's happening in the city now.

Writing in the May 11 issue of the New Yorker, Jelani Cobb helped shape our understanding of what's happening in Baltimore in one powerful and painful paragraph:

Midway through the twentieth century, cities--especially those, like Baltimore, which were sustained by ports--connoted a kind of American swagger. Today, the population of Baltimore is six hundred and twenty-three thousand; in 1950, it was nine hundred and fifty thousand. The Second World War diminished ethnic rivalries among white Americans and, with them, the tribal allotments of urban neighborhoods, but that process was accelerated by the fact that those areas were already becoming less appealing. When, in 1910, a black attorney bought a house on a white block in Baltimore, the Sun reported that the presence of blacks would drive down property values. That helped bring about a city ordinance--the first of its kind--establishing block-by-block segregation. It is generally assumed that white flight was a product of the political tumult and the spiking crime that afflicted American cities in the nineteen-sixties, but it may well have been the other way around. Baltimore, three-quarters white in 1950, is now two-thirds black. As the surrounding suburbs became increasingly white, transportation networks that once connected the city and the outlying county crumbled. Industry and employment relocated to the surrounding areas. By the late sixties, the city was marked by poverty, a persistent lack of opportunity, and violent crime.

As we'll see below, the geography of persistent poverty lasting decades in the U.S. is largely Southern and rural. But as Kristin Caldwell documented in Policymap back in March, "persistent poverty is a daunting problem in many urban neighborhoods as well." Pointing to recent research and "place-conscious strategies" from the Urban Institute, Caldwell explained:

Their research also highlights how persistent intergenerational poverty impacts minority communities disproportionately, especially communities where minorities are the overwhelming majority. Taking a quick look at the maps below of Baltimore, showing persistent poverty followed by the predominant race/ethnicity, you can see that in urban areas, persistent poverty too commonly occurs in overwhelmingly minority neighborhoods. Exploring other cities in a similar fashion reveals similar trends.

Similar, indeed. What happens "when work disappears," combined with a priori or post-facto neighborhood segregation, is a toxic recipe for poverty, blight and hopelessness. The overlap between America's poorest cities and most segregated urban areas is no coincidence. In Detroit, America's poorest city with a poverty rate of 42.3 percent among its 710,000 residents, you can see the line between black and white:

(It should be noted, as Nate Silver does at FiveThirtyEight, that even a city with a diverse population like Chicago can nevertheless still exhibit very high segregation at the neighborhood level.)
The impact on what GOP White House hopeful Jeb Bush and Congressman Paul Ryan both like to call the "right to rise" is dramatic. The American dream--that each generation will live better than its predecessor--has flat-lined. In 2014, research by Raj Chetty of Harvard, Emmanuel Saez of Cal Berkeley and their colleagues found that "The odds of moving up -- or down -- the income ladder in the United States have not changed appreciably in the last 20 years." Based on millions of anonymous tax records, the New York Times reported, the study revealed "that the mobility rate has held largely steady in recent decades, although it remains lower than in Canada and in much of Western Europe, where the odds of escaping poverty are higher."
But the geographic differences in social mobility are dramatic, with factors including sprawl and poor transportation networks having significant impacts. As the Times summed it up :

Climbing the income ladder occurs less often in the Southeast and industrial Midwest, the data shows, with the odds notably low in Atlanta, Charlotte, Memphis, Raleigh, Indianapolis, Cincinnati and Columbus. By contrast, some of the highest rates occur in the Northeast, Great Plains and West, including in New York, Boston, Salt Lake City, Pittsburgh, Seattle and large swaths of California and Minnesota.
"Where you grow up matters," said Nathaniel Hendren, a Harvard economist and one of the study's authors. "There is tremendous variation across the U.S. in the extent to which kids can rise out of poverty."

Just this week, new research from Chetty and Hendren found that when it comes to social mobility and escaping poverty, "neighborhoods matter in a really big way."

Based on the earnings records of millions of families that moved with children, it finds that poor children who grow up in some cities and towns have sharply better odds of escaping poverty than similar poor children elsewhere.
The feelings heard across Baltimore's recent protests -- of being trapped in poverty -- seem to be backed up by the new data. Among the nation's 100 largest counties, the one where children face the worst odds of escaping poverty is the city of Baltimore, the study found.

Just how much worse can be seen by comparing Baltimore to Washington, DC. As the New York Times interactive map shows, "if a child in a poor family were to grow up in Baltimore, MD, instead of an average place, he or she would make $4,510 less, or 17 percent, at age 26." But the nation's capital, that same child would ultimately make $140 a year more. (The contrast with nearby Montgomery and Fairfax counties, home to so much of the "government industrial complex," is even more shocking.

As Chetty explained, the eye-opening results should have real-world implications for public policy:

"The data shows we can do something about upward mobility. Every extra year of childhood spent in a better neighborhood seems to matter."

The implication is that a rethinking--and enhanced funding--for America's housing policy could help reduce poverty and improve life chances for low-income families. Of course, for Paul Ryan and his conservative echo chamber, the government should be doing less, not more. Ryan hasn't just proposed draconian to cuts to social programs. He has emphatically--and wrongly--proclaimed the War on Poverty a failure:

"After a 50-year war on poverty and trillions of dollars spent, we still have the same poverty rates."

That, Dylan Matthews retorted, is "an out-and-out lie." It's not just, as Matthews explained, "The poverty rate was 19 percent in 1964, when the War on Poverty was announced. In 2013, it was 14.5 percent." More importantly, the "official poverty rate" is based on an index of food prices created in 1955. "It excludes the very anti-poverty programs Ryan is talking about. It excludes in-kind transfers like Medicaid, food stamps, and housing vouchers, as well as tax-based programs like the EITC," Matthews quipped. "Blasting those programs because they don't show up in the poverty rate is like arguing that Netflix shows have zero viewers by pointing to cable ratings."
That's where the Supplemental Poverty Measurement comes in. Using the "anchored SPM" (blue line below), you can see that poverty has fallen dramatically over the past 50 years. But if leave out the government programs (green line below), there's no movement at all. To put it another way, "Poverty -- measured accurately, in a way that includes the government programs Ryan is trying to evaluate -- fell, and it fell entirely because of government programs":

But in their eagerness to attack Democrats, government action and the poor themselves, Ryan and his ilk are only too happy to blame poverty on the pathology of "inner city" men. As the GOP's 2012 VP choice put it last year:

"We have got this tailspin of culture, in our inner cities in particular, of men not working and just generations of men not even thinking about working or learning the value and the culture of work, and so there is a real culture problem here that has to be dealt with."

Sadly for ideologues like Ryan, there are a few problems with that slander. For starters, as a quick tour through Kentucky would highlight, poverty--and especially "persistent" poverty rates above 20 percent---is a defining characteristic of the rural South.

In Eastern Kentucky, for example, over 20 years of rising unemployment tell the tale. "The underlying story of Appalachia is in fact one of declining opportunity," Paul Krugman lamented, before concluding that "William Julius Wilson was right":

Wilson famously argued that the social troubles of urban blacks emerged, not because there was something inherently wrong with their culture, but because job opportunities in inner cities dried up. Sure enough, when the God-fearing (and definitely white) people of Appalachia face a loss of employment opportunity, their region turns into what [the National Review's Kevin] Williamson calls the Great White Ghetto.

But as Krugman pointed out this week, Wilson's argument provided its own test: "If other racial groups were to face a similar loss of job opportunity, their behavior would change in similar ways."

And so it has proved. Lagging wages -- actually declining in real terms for half of working men -- and work instability have been followed by sharp declines in marriage, rising births out of wedlock, and more.
As Isabel Sawhill of the Brookings Institution writes: "Blacks have faced, and will continue to face, unique challenges. But when we look for the reasons why less skilled blacks are failing to marry and join the middle class, it is largely for the same reasons that marriage and a middle-class lifestyle is eluding a growing number of whites as well."

With a nod to the likes of Paul Ryan, Jeb Bush, Charles Murray, David Brooks and their accomplices, Paul Krugman lamented, is it "disheartening still to see commentators suggesting that the poor are causing their own poverty, and could easily escape if only they acted like members of the upper middle class." Disheartening, but not surprising coming as it does from a conservative movement hoping to party like it's 1966. As the Washington Post's Dionne put it this week:

Urban riots call forth an avalanche of glibness. Tragedies allow us to ride our hobby horses and to repackage the same arguments we were advancing before the first stone was thrown and the first fire set.

"The people of Baltimore and all the other places the invisible hand has left stranded," Dionne concluded, "deserve better."


About

Jon Perr
Jon Perr is a technology marketing consultant and product strategist who writes about American politics and public policy.

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