20240429 Calibre April 2024 Investor Presentation.pdf
Shop here not there civic101
1.
2. RESEARCH SHOWS FOOD DESERTS MORE
ABUNDANT IN MINORITY NEIGHBORHOODS
• IN BALTIMORE, FOR EXAMPLE, THE CITY HAS CREATED A
SYSTEM FOR FOOD DESERT RESIDENTS TO ORDER FOOD
ONLINE. LAUNCHED IN 2010 WITH SUPPORT FROM AN
AMERICAN RECOVERY AND REINVESTMENT ACT GRANT,
THE UNITED WAY OF CENTRAL MARYLAND, THE AETNA
FOUNDATION, AND THE WALMART FOUNDATION, THE
BALTIMARKET PROGRAM ENABLES SHOPPERS TO PLACE AN
ONLINE ORDER FOR GROCERIES. THE GROCERIES ARE THEN
DELIVERED TO A NEARBY DROP-OFF POINT—A LIBRARY,
SENIOR LIVING FACILITY, OR PUBLIC HOUSING SITE— AND
THE BALTIMORE HEALTH DEPARTMENT PICKS UP THE
DELIVERY FEE.
UNTIL HEALTHY FOOD BECOMES MORE
ABUNDANT IN ALL POOR NEIGHBORHOODS,
BOWER HAS A FEW SUGGESTIONS. FIRST, SHE
SAYS, HEALTH CARE PROVIDERS SHOULD NOT
ONLY TALK WITH PATIENTS ABOUT WHAT TO
EAT BUT ALSO RECOMMEND SOURCES FOR
HEALTHY FOOD IN THEIR NEIGHBORHOODS.
SECOND, COMMUNITY INITIATIVES SUCH AS
FARMERS MARKETS AND MOBILE FOOD VANS
CAN HELP FILL THE GAP.
3. FOOD DESERTS MORE ABUNDANT IN
MINORITY NEIGHBORHOODS
THE MOST IMPORTANT STUDY IMPLICATIONS,
THOUGH, ARE POLICY-BASED, ACCORDING TO
BOWER. "LOCAL POLICYMAKERS SHOULD BE
LOOKING AT THE QUALITY OF
INFRASTRUCTURE IN POOR AND MINORITY
NEIGHBORHOODS TO SEE IF IT COULD BETTER
SUPPORT BUSINESSES," SHE SAYS. "AND
THEY SHOULD THINK ABOUT WAYS TO
INCENTIVIZE SUPERMARKETS TO LOCATE IN
MINORITY NEIGHBORHOODS."
4. FAMILY RETAIL AND FAMILY SHOP DESERTS
MORE ABUNDANT IN MINORITY
NEIGHBORHOODS. SHOPPING LOCAL
BENEFITS THE NEIGHBORHOOD
• A NEW STUDY FINDS THAT MONEY YOU SPEND AT CHAIN
STORES QUICKLY LEAVES THE COMMUNITY, WHILE MONEY
YOU SPEND AT LOCAL BUSINESSES HELPS MAKE THE
NEIGHBORHOOD BETTER.
• THINK ABOUT THIS THE NEXT TIME YOU GO TO THE
NEIGHBORHOOD CVS OR STARBUCKS: YOU COULD DO
MORE FOR THE LOCAL ECONOMY BY VISITING THE SMALL
PHARMACY OR COFFEE PLACE ON THE CORNER. HOW MUCH
MORE? ACCORDING TO A RECENT STUDY FOR LOUISVILLE,
KENTUCKY–WHICH LOOKS AT THE “LOCAL PREMIUM” OF
SPENDING AT LOCAL OUTLETS INSTEAD OF BIG CHAINS–
PERHAPS FOUR TIMES AS MUCH.
SHOPPING THERE AND YOUR RACE HAS LONG
SHAPED SHOPPING EXPERIENCES FOR MANY
AMERICANS. RETAIL EXCHANGES AND
ESTABLISHMENTS HAVE MADE HEADLINES AS
FLASHPOINTS FOR CONFLICT NOT ONLY
BETWEEN BLACKS AND WHITES, BUT ALSO
BETWEEN WHITES, MEXICANS, ASIAN
AMERICANS, AND A WIDE VARIETY OF OTHER
ETHNIC GROUPS, WHO HAVE AT TIMES FOUND
THEMSELVES UNWELCOME AT WHITE-OWNED
BUSINESSES.
5. SHOPPING LOCAL BENEFITS THE
NEIGHBORHOOD (CONT.)
• MONEY SPENT AT INDEPENDENT OUTLETS IS MORE LIKELY
TO STAY LOCAL THAN THAT SPENT AT A CHAIN. THE STUDY
FOR LOUISVILLE FOUND THAT INDEPENDENT STORES
RECIRCULATE 55.2% OF REVENUES COMPARED TO 13.6%
FOR BIG RETAILERS, AND THAT LOCAL RESTAURANTS
RECIRCULATE 67%, WHILE BIG CHAINS DO 30.4%.
• CIVIC ECONOMICS ANALYZES THE BOOKS OF INDEPENDENT
BUSINESSES LOOKING AT PROFITS PAID TO LOCAL
OWNERS, WAGES PAID TO LOCAL WORKERS,
PROCUREMENT OF GOODS AND SERVICES FOR INTERNAL
USE, PURCHASE OF LOCAL GOODS FOR RESALE, AND LOCAL
CHARITABLE GIVING.
CIVIC ECONOMICS HAS BEEN RUNNING THE
NUMBERS FOR LOTS OF TOWNS AND CITIES
OVER THE LAST 10 YEARS. AND THE NEWEST
BATCH OF STUDIES–FOR LOUISVILLE,
MILWAUKEE, OGDEN, UTAH, AND THE SIX
CORNERS AREA OF CHICAGO–CORROBORATE
WHAT AT LEAST EIGHT SIMILAR ONES HAVE
SHOWN.
6. SHOPPING LOCAL BENEFITS THE
NEIGHBORHOOD (CONT.)
• THE NUMBERS WERE ALSO STARK FOR THE OTHER CITIES.
THE RETAIL PREMIUM WAS 3.24 MORE REVENUE IN
MILWAUKEE AND 3.55 IN OGDEN. FOR THE RESTAURANTS,
IT WAS 1.73 IN MILWAUKEE, AND 1.87 IN OGDEN. AVERAGED
ACROSS 10 COMMUNITIES, LOCAL RETAILERS PRODUCE 3.7
TIMES MORE ECONOMIC BENEFIT THAN SPENDING AT
CHAINS.
• AND SUCH SPENDING HAS A CASCADING EFFECT. “WHILE
CHAIN STORES AND RESTAURANTS EXTRACT LOCALLY
GENERATED REVENUES FROM THE COMMUNITY WITH EACH
NIGHTLY BANK TRANSACTION, INDEPENDENTS ARE
CREATING A VIRTUOUS CYCLE OF LOCAL SPENDING,” SAYS
THE LOUISVILLE STUDY.
IT THEN COMPARES THAT AGGREGATE
NUMBER WITH FIGURES TAKEN FROM PUBLIC
RECORDS FOR THE CHAINS. IN THE CASE OF
LOUISVILLE, THE RESEARCHERS WORKED
WITH BUSINESSES LIKE KIZITO COOKIES,
RAINBOW BLOSSOM NATURAL MARKETS, AND
DUNDEE CANDY SHOP, COMPARING THEIR
IMPACT WITH THE LIKES OF HOME DEPOT,
OFFICE MAX, TARGET, AND PF CHANG’S.
7. SHOPPING LOCAL BENEFITS THE
NEIGHBORHOOD (CONT.)
• SMALL BUSINESSES ARE THE BACKBONE OF YOUR
COMMUNITY. BY SHOPPING AT THE STORES IN YOUR
NEIGHBOURHOOD, YOU’RE SUPPORTING LOCAL JOB CREATION,
ECONOMIC GROWTH AND COMMUNITY SPIRIT.
• SUPPORT YOUR COMMUNITY.
PARTICIPATE IN SHOP THE NEIGHBOURHOOD.
• BY SHOPPING LOCALLY, YOU’RE STRENGTHENING SMALL
BUSINESSES AND YOUR COMMUNITY.
• ORIGINALLY LAUNCHED IN 2013, THE SHOP THE
NEIGHBOURHOOD CAMPAIGN ENCOURAGES CANADIANS TO
VARY THEIR SHOPPING BEHAVIOURS BY BUYING GOODS AND
SERVICES AT SMALL LOCAL BUSINESSES, ULTIMATELY
KEEPING THEIR DOLLARS WITHIN THEIR COMMUNITIES.
“THE EXTRA DOLLARS IN THE LOCAL ECONOMY
PRODUCE MORE JOBS FOR RESIDENTS, EXTRA
TAX REVENUES FOR LOCAL GOVERNMENTS, MORE
INVESTMENT IN COMMERCIAL AND RESIDENTIAL
DISTRICTS, AND ENHANCED SUPPORT FOR
LOCAL NONPROFITS. IN SHORT, THESE
BUSINESSES CREATE BETTER PLACES.
STILL, THE CONCLUSIONS AREN’T SURPRISING,
EVEN IF THE SIZE OF THE PREMIUM PERHAPS IS.
WHILE THE RESEARCH DOESN’T TELL US HOW
MUCH MORE CUSTOMERSMAY PAY TO SHOP
LOCAL (IF ANYTHING), IT IS CLEAR WHAT VALUE
THERE IS IN DOING SO.”
8. INCOME DISPARITIES HAVE BECOME SO
PRONOUNCED THAT AMERICA’S TOP 10
PERCENT NOW AVERAGE MORE THAN NINE
TIMES AS MUCH INCOME AS THE BOTTOM 90
PERCENT. AMERICANS IN THE TOP 1 PERCENT
TOWER STUNNINGLY HIGHER.
WHY HASN’T WEALTH INEQUALITY IMPROVED
OVER THE PAST 50 YEARS? AND WHY, IN
PARTICULAR, HAS THE RACIAL WEALTH GAP NOT
CLOSED? THESE NINE CHARTS ILLUSTRATE HOW
INCOME INEQUALITY, EARNINGS GAPS,
HOMEOWNERSHIP RATES, RETIREMENT
SAVINGS, STUDENT LOAN DEBT, AND LOPSIDED
ASSET-BUILDING SUBSIDIES HAVE
CONTRIBUTED TO THESE GROWING WEALTH
DISPARITIES.
9. WEALTH INEQUALITY IS GROWING
AVERAGE WEALTH HAS INCREASED OVER THE PAST 50 YEARS, BUT IT HAS
NOT GROWN EQUALLY FOR ALL GROUPS. BETWEEN 1963 AND 2016,
FAMILIES NEAR THE BOTTOM OF THE WEALTH DISTRIBUTION (THOSE AT
THE 10TH PERCENTILE) WENT FROM HAVING NO WEALTH ON AVERAGE TO
BEING ABOUT $1,000 IN DEBT,
THOSE IN THE MIDDLE MORE THAN DOUBLED THEIR WEALTH,
FAMILIES NEAR THE TOP (AT THE 90TH PERCENTILE) SAW THEIR WEALTH
INCREASE FIVEFOLD,
AND THE WEALTH OF THOSE AT THE 99TH PERCENTILE—IN OTHER WORDS,
THOSE WEALTHIER THAN 99 PERCENT OF ALL FAMILIES—GREW
SEVENFOLD.
THESE CHANGES HAVE INCREASED WEALTH INEQUALITY SIGNIFICANTLY. IN
1963, FAMILIES NEAR THE TOP HAD SIX TIMES THE WEALTH (OR, $6 FOR
EVERY $1) OF FAMILIES IN THE MIDDLE. BY 2016, THEY HAD 12 TIMES THE
WEALTH OF FAMILIES IN THE MIDDLE.
10. ONE REASON FOR RISING WEALTH INEQUALITY IS
INCOME INEQUALITY
INCOME IS MONEY COMING INTO A FAMILY, WHILE WEALTH IS A
FAMILY’S ASSETS—THINGS LIKE SAVINGS, REAL ESTATE,
BUSINESSES—MINUS DEBT. BOTH ARE IMPORTANT SIDES OF
FAMILIES’ FINANCIAL SECURITY, BUT WEALTH CUSHIONS
FAMILIES AGAINST EMERGENCIES AND GIVES THEM THE MEANS
TO MOVE UP THE ECONOMIC LADDER. ALSO, WEALTH
DISPARITIES ARE MUCH GREATER THAN INCOME DISPARITIES:
THREE TIMES AS MUCH BY ONE MEASURE.
INCOME INEQUALITY CAN WORSEN WEALTH INEQUALITY
BECAUSE THE INCOME PEOPLE HAVE AVAILABLE TO SAVE AND
INVEST MATTERS. FOCUSING ON PRIVATE INCOME, SUCH AS
EARNINGS AND DIVIDENDS, PLUS CASH GOVERNMENT
BENEFITS, WE SEE THAT THE INCOME OF FAMILIES NEAR THE TOP
INCREASED ROUGHLY 90 PERCENT FROM 1963 TO 2016, WHILE
THE INCOME OF FAMILIES AT THE BOTTOM INCREASED LESS
THAN 10 PERCENT.
11. RACIAL AND ETHNIC WEALTH DISPARITIES
PERSIST
FAMILIES OF COLOR WILL SOON MAKE UP A MAJORITY
OF THE POPULATION, BUT MOST CONTINUE TO FALL
BEHIND WHITES IN BUILDING WEALTH. IN 1963, THE
AVERAGE WEALTH OF WHITE FAMILIES WAS $121,000
HIGHER THAN THE AVERAGE WEALTH OF NONWHITE
FAMILIES. BY 2016, THE AVERAGE WEALTH OF WHITE
FAMILIES ($919,000) WAS OVER $700,000 HIGHER
THAN THE AVERAGE WEALTH OF BLACK FAMILIES
($140,000) AND OF HISPANIC FAMILIES ($192,000).
PUT ANOTHER WAY, WHITE FAMILY WEALTH WAS SEVEN
TIMES GREATER THAN BLACK FAMILY WEALTH AND FIVE
TIMES GREATER THAN HISPANIC FAMILY WEALTH IN
2016. DESPITE SOME FLUCTUATIONS OVER THE PAST
FIVE DECADES, THIS DISPARITY IS AS HIGH OR HIGHER
THAN WAS IN 1963.
12. DIFFERENCES IN EARNINGS ADD UP OVER
A LIFETIME AND WIDEN THE RACIAL AND
ETHNIC WEALTH GAP
WHY IS THE RACIAL AND ETHNIC WEALTH GAP SO BIG?
PEOPLE WITH LOWER EARNINGS MAY HAVE A HARDER
TIME SAVING. THE AVERAGE WHITE MAN EARNS $2.7
MILLION OVER A LIFETIME, WHILE THE AVERAGE BLACK
MAN EARNS $1.8 MILLION AND THE AVERAGE HISPANIC
MAN EARNS $2.0 MILLION. THE DIFFERENCE IN
LIFETIME EARNINGS IS LOWER FOR WOMEN: THE
AVERAGE WHITE WOMAN EARNS $1.5 MILLION, WHILE
THE AVERAGE BLACK WOMAN EARNS $1.3 MILLION
AND THE AVERAGE HISPANIC WOMAN EARNS $1.1
MILLION. THESE DISPARITIES PARTLY REFLECT
HISTORICAL DISADVANTAGES THAT CONTINUE TO
AFFECT LATER GENERATIONS.
13. BLACK AND HISPANIC FAMILIES LAG BEHIND
ON MAJOR WEALTH-BUILDING MEASURES,
LIKE HOMEOWNERSHIP
BLACKS AND HISPANICS ARE LESS LIKELY TO OWN
HOMES, SO THEY MORE OFTEN MISS OUT ON THIS
POWERFUL WEALTH-BUILDING TOOL. HOMEOWNERSHIP
MAKES THE MOST OF AUTOMATIC PAYMENTS—
HOMEOWNERS MUST MAKE MORTGAGE PAYMENTS
EVERY MONTH—TO BUILD EQUITY.
IN 1976, 68 PERCENT OF WHITE FAMILIES OWNED THEIR
HOME, COMPARED WITH 44 PERCENT OF BLACK
FAMILIES AND 43 PERCENT OF HISPANIC FAMILIES. BY
2016, THE HOMEOWNERSHIP GAP HAD NARROWED
SLIGHTLY FOR HISPANICS BUT WIDENED FOR BLACKS.
BLACK AND HISPANIC FAMILIES WERE ALSO LESS LIKELY
TO OWN HOMES THAN WHITE FAMILIES WITH SIMILAR
INCOMES.
14. BLACK AND HISPANIC FAMILIES HAVE
LESS IN LIQUID RETIREMENT SAVINGS
IN 2016, WHITE FAMILIES HAD ABOUT $130,000 MORE
(OR SIX TIMES MORE) IN AVERAGE LIQUID RETIREMENT
SAVINGS THAN BLACK AND HISPANIC FAMILIES. IN
SHEER DOLLAR TERMS, THIS DISPARITY HAS
INCREASED MORE THAN FIVEFOLD OVER THE PAST
QUARTER-CENTURY: IN 1989, WHITE FAMILIES HAD
ABOUT $25,000 MORE (OR FIVE TIMES MORE) IN
AVERAGE RETIREMENT SAVINGS THAN BLACK AND
HISPANIC FAMILIES. THIS GAP IS BECOMING MORE
IMPORTANT AS LIQUID RETIREMENT SAVINGS
VEHICLES, LIKE 401(K)S, REPLACE MORE TRADITIONAL
DEFINED-BENEFIT PENSION PLANS.
15. BLACK FAMILIES CARRY MORE STUDENT LOAN
DEBT THAN WHITE FAMILIES
SINCE THE MID-2000S, BLACK FAMILIES, ON AVERAGE,
HAVE CARRIED MORE STUDENT LOAN DEBT THAN
WHITE FAMILIES. THIS IS DRIVEN IN LARGE PART BY
THE GROWING SHARE OF BLACK FAMILIES THAT TAKE
ON STUDENT DEBT. IN 2016, 42 PERCENT OF FAMILIES
HEADED BY BLACK ADULTS AGES 25 TO 55 HAD
STUDENT LOAN DEBT, COMPARED WITH 34 PERCENT OF
SIMILAR WHITE FAMILIES.
BECAUSE BLACK FAMILIES, ON AVERAGE, HAVE LESS
WEALTH AND FEWER PRIVATE RESOURCES, THEY MAY
BE MORE LIKELY TO TURN TO LOANS TO FINANCE THEIR
EDUCATION. WHITE FAMILIES ARE FIVE TIMES MORE
LIKELY THAN BLACK FAMILIES TO RECEIVE LARGE GIFTS
OR INHERITANCES, WHICH CAN BE USED TO PAY FOR
COLLEGE
16. FEDERAL POLICIES FAIL TO PROMOTE ASSET
BUILDING BY LOWER-INCOME FAMILIES
THE FEDERAL GOVERNMENT SPENDS OVER $400
BILLION TO SUPPORT ASSET DEVELOPMENT, BUT THOSE
SUBSIDIES PRIMARILY BENEFITED HIGHER-INCOME
FAMILIES—EXACERBATING WEALTH INEQUALITY AND
RACIAL WEALTH DISPARITIES.
ABOUT TWO-THIRDS OF HOMEOWNERSHIP TAX
SUBSIDIES AND RETIREMENT SUBSIDIES GO TO THE
TOP 20 PERCENT OF TAXPAYERS, AS MEASURED BY
INCOME. THE BOTTOM 20 PERCENT, MEANWHILE,
RECEIVE LESS THAN 1 PERCENT OF THESE SUBSIDIES.
BLACKS AND HISPANICS, WHO HAVE LOWER AVERAGE
INCOMES, RECEIVE MUCH LESS OF THESE SUBSIDIES
THAN WHITES, BOTH IN TOTAL AMOUNT AND AS A
SHARE OF THEIR INCOMES.
17. THE RACIAL WEALTH GAP GROWS SHARPLY
WITH AGE
WHITE FAMILIES ACCUMULATE MORE WEALTH OVER
THEIR LIVES THAN BLACK OR HISPANIC FAMILIES DO,
WIDENING THE WEALTH GAP AT OLDER AGES. IN THEIR
30S, WHITES HAVE AN AVERAGE OF $147,000 MORE IN
WEALTH THAN BLACKS (THREE TIMES AS MUCH). BY
THEIR 60S, WHITES HAVE OVER $1.1 MILLION MORE IN
AVERAGE WEALTH THAN BLACKS (SEVEN TIMES AS
MUCH).
MEDIAN WEALTH BY RACE IS LOWER. THOUGH THE
DOLLAR GAP GROWS WITH AGE, THE RATIO DOESN’T
GROW IN THE SAME WAY: WHITES HAVE SEVEN TIMES
MORE MEDIAN WEALTH THAN BLACKS IN THEIR 60S
AND 70S
18. THE PERSISTENT INEQUALITY OF NEIGHBORHOODS
• THE PLACES WE’RE BORN HAVE A PROFOUND INFLUENCE ON OUR ABILITY TO MOVE UP THE ECONOMIC LADDER.
• AMERICA’S SURGING ECONOMICINEQUALITY HAS BEEN BLAMED FOR EVERYTHING FROM CRONY CAPITALISM TO THE
DISPLACEMENT OF ONCE GOOD-PAYING JOBS BY GLOBALIZATION AND NEW TECHNOLOGY. BUT ACCORDING TO A MAJOR
RECENT STUDY, THE REAL CULPRIT IN BOTH THE GROWING GAP BETWEEN THE RICH AND POOR CAN BE TRACED TO THE
NEIGHBORHOODS IN WHICH WE ARE BORN AND RAISED.
• THE STUDY, WHICH EXPANDS ON THE CRUCIAL ONGOING WORK OF THE HARVARD SOCIOLOGIST ROBERT J. SAMPSON AND
INCLUDED IN A LARGER ECONOMIC MOBILITY REPORT FROM THE ST. LOUIS FED, EXAMINES THE RISE OF NEIGHBORHOOD
INEQUALITY AND ITS EFFECTS ON THE ECONOMIC MOBILITY OF AMERICANS. THE STUDY ASKS TWO BASIC QUESTIONS:
“HOW MOBILE ARE NEIGHBORHOODS?”AND “HOW MOBILE ARE INDIVIDUALS ACROSS NEIGHBORHOOD INCOME TYPES?” IT
DRAWS ON CENSUS DATA FOR NEIGHBORHOODS ACROSS THE U.S AS A WHOLE FROM 1990 TO 2012, AND EVEN MORE
DETAILED DATA FROM THE 2014 MIXED-INCOME PROJECT (MIP) TO TRACK THE EFFECTS OF NEIGHBORHOOD LOCATION ON
THE LIFE TRAJECTORIES OF PEOPLE IN TWO OF AMERICA’S LARGEST CITIES: CHICAGO AND LOS ANGELES.
19. THE PERSISTENT INEQUALITY OF NEIGHBORHOODS (CONT.)
• THE STUDY EXAMINES AND COMPARES TWO KEY MEASURES OF NEIGHBORHOOD INCOME STATUS—MEDIAN FAMILY INCOME AND
THE “DEGREE OF MUTUAL EXPOSURE OF LOWER- AND HIGHER-INCOME PERSONS”—FOR CENSUS TRACTS OR NEIGHBORHOODS IN
THESE TWO CITIES.
• NEIGHBORHOOD POVERTY IS PERSISTENT OVER TIME
• FIRST AND FOREMOST, NEIGHBORHOOD POVERTY IS STUBBORNLY PERSISTENT ACROSS TIME. ACROSS THE NATION AS A WHOLE,
ROUGHLY 80 PERCENT OF POOR NEIGHBORHOODS IN 1990 REMAINED SO IN 2000, AND 75 PERCENT OF POOR NEIGHBORHOODS IN
2000 REMAINED SO IN 2012. IN CHICAGO AND L.A., VIRTUALLY NO NEIGHBORHOODS WENT FROM THE BOTTOM FIFTH TO THE TOP
FIFTH OF THE INCOME DISTRIBUTION. JUST 5 PERCENT OF CHICAGO’S HIGH-POVERTY NEIGHBORHOODS MANAGED TO IMPROVE TO
THE TOP TWO QUINTILES, AND A MERE 2 PERCENT OF L.A. NEIGHBORHOODS DID SO. THE STARK REALITY IS THAT POVERTY IS
PERSISTENT AND THAT NEIGHBORHOODS AT THE VERY BOTTOM OF THE ECONOMIC ORDER FUNCTION MORE OR LESS AS POVERTY
TRAPS.
• THERE IS A SIMILAR PERSISTENCE OF AFFLUENCE AT THE VERY TOP OF THE ECONOMIC ORDER. VERY FEW AFFLUENT
NEIGHBORHOODS FELL MARKEDLY DOWN THE ECONOMIC STRATA. ACROSS THE UNITED STATES, 80 PERCENT OF AFFLUENT
NEIGHBORHOODS IN 1990 REMAINED AFFLUENT TWO DECADES LATER. IN LOS ANGELES, 87 PERCENT OF AFFLUENT NEIGHBORHOODS
IN 2000 REMAINED SO IN 2010. IN CHICAGO, THAT FIGURE WAS 77 PERCENT.
20. Sampson also finds little evidence that gentrification has made much of a dent on persistent
poverty—less than three percent of U.S. neighborhoods in the bottom two income categories
during the 1990s and 2000s moved above the 60th percentile. And, a relatively small amount
(50,000 neighborhoods) climbed from the bottom level to the top.
As Sampson points out:
These findings militate against the idea that income inequality is somehow recent at the
neighborhood level or that neighborhoods have radically repositioned themselves. Just as
individual income mobility has been fairly low for some time, the odds of neighborhood-level
upgrading are relatively low, and persistent neighborhood inequality has existed for decades.
The upshot is that America suffers from a neighborhood inequality of “concentrated extremes”
that persist over long periods of time. In both cities, 90 percent of individuals who grew up in an
affluent neighborhood stayed at or near the top, and fewer than 10 percent of those who
started in poor neighborhoods were able to climb to these affluent places.
21. • THIS IS THE CASE DESPITE DEEP CHANGES IN OUR ECONOMY AND SOCIETY SPANNING THE GREAT RECESSION, RISING
INEQUALITY, AND A SUBSTANTIAL FALL-OFF IN URBAN CRIME. “THE FACTS ON INDIVIDUAL INCOME MOBILITY ARE CRUCIAL,
OF COURSE, BUT THEY TELL ONLY HALF THE STORY,” SAMPSON WRITES. “THE OTHER HALF PERTAINS TO THE PROSPECTS OF
CHANGE IN ONE’S COMMUNITY OF RESIDENCE: INDIVIDUALS ARE BORN INTO, GROW UP IN, AND BECOME ADULTS IN
NEIGHBORHOODS THAT ARE ALSO HIGHLY UNEQUAL.”
• ON A MORE POSITIVE NOTE, SAMPSON FINDS EVIDENCE OF SOME MOBILITY OR “FLUIDITY” AMONG MIDDLE CLASS
NEIGHBORHOODS. ON THIS SCORE, BOTH CHICAGO AND L.A. OUTPERFORMED THE NATIONAL AVERAGE. THAT SAID, 37
PERCENT OF CHICAGO’S NEIGHBORHOODS AND 47 PERCENT OF L.A.’S REMAINED IN THE MIDDLE-INCOME GROUP OVER THE
SPAN OF TWO DECADES. HOWEVER, HE NOTES THAT MIDDLE-INCOME NEIGHBORHOODS HAVE BECOME INCREASINGLY
VULNERABLE OVER TIME AND THAT THE ONCE VIBRANT MIDDLE OF AMERICA’S NEIGHBORHOOD GEOGRAPHY HAS
ESSENTIALLY HOLLOWED OUT. IN OTHER WORDS, AMERICA’S NEIGHBORHOOD INEQUALITY IS DEFINED BY THE
JUXTAPOSITION OF CONCENTRATED DISADVANTAGE AND CONCENTRATED ADVANTAGE AT THE EXTREMES, AND WORSENING
PRECARIOUSNESSIN THE MIDDLE.
22. • RACE SHAPES ECONOMIC ADVANTAGES AND PENALTIES IN NEIGHBORHOODS, EVEN WHEN CONTROLLING FOR KEY FACTORS
• RACE PLAYS A HUGE ROLE IN NEIGHBORHOOD INEQUALITY, ACCORDING TO SAMPSON. DESPITE PREDICTIONS OF THE DECLINING
ROLE OF RACE AND OF THE RISE OF A POST-RACIAL SOCIETY, SAMPSON ALSO FINDS NEIGHBORHOOD POVERTY AND INEQUALITY TO
BE INEXTRICABLY LINKED TO RACE. TO GET AT THIS, HE LOOKS AT THE RELATIONSHIP BETWEEN NEIGHBORHOOD INCOME AND
RACE/ETHNICITY OVER TIME, CONTROLLING FOR FACTORS SUCH AS IMMIGRANT GENERATION, EDUCATION, EMPLOYMENT, FAMILY
INCOME, HOUSEHOLD SIZE, HOME OWNERSHIP, AND MARITAL STATUS. HE FINDS A CLEAR ECONOMIC ADVANTAGE FOR WHITE
NEIGHBORHOODS AND AN ECONOMIC PENALTY FOR BLACK NEIGHBORHOODS.
• BLACKS IN CHICAGO ENDED UP WITH ALMOST $19,000 LOWER MEDIAN INCOME THAN WHITES, AND ABOUT $8,000 LESS IN L.A.,
AFTER CONTROLLING FOR BASELINE NEIGHBORHOOD INCOMES. AS SAMPSON POINTS OUT, “WHITE PRIVILEGE IN NEIGHBORHOOD
STATUS IS MAINTAINED AFTER CONTROLLING FOR THE CLASSIC MOBILITY-RELATED FEATURES OF INDIVIDUAL BACKGROUND,
RESIDENTIAL MOBILITY AND THE MACRO EFFECTS OF THE GREAT RECESSION.” BLACK NEIGHBORHOODS ARE EXPOSED TO GREATER
POVERTY, MORE UNEMPLOYMENT, AND MORE CRIME AND DISORDER THAN WHITE NEIGHBORHOODS. ULTIMATELY, “RACIAL
INEQUALITY IN EXPOSURE TO LOW-INCOME NEIGHBORHOOD ENVIRONMENTS IS SO STRONG THAT HIGH-INCOME BLACKS ARE
EXPOSED TO GREATER NEIGHBORHOOD POVERTY THAN LOW-INCOME WHITES.”
23. • POVERTY POLICIES CAN BE “PEOPLE-ORIENTED” AND “PLACE-ORIENTED”
• SAMPSON ALSO TAKES A CLOSE LOOK AT WHAT CAN BE DONE TO REMEDY AMERICA’S NEIGHBORHOOD INEQUALITY. HE
DIVIDES OUR CURRENT APPROACH TO POVERTY INTO TWO MAIN BUCKETS. ONE THE ONE SIDE ARE “PEOPLE-ORIENTED”
POLICIES, FAVORED BY MANY ECONOMISTS, THAT AIM TO MOVE PEOPLE, PARTICULARLY YOUNG PEOPLE, OUT OF
DISADVANTAGED PLACES AND RELOCATE THEM TO NEIGHBORHOODS WITH BETTER SCHOOLS AND PUBLIC SERVICES.
A RECENT STUDY FOUND THAT THESE PEOPLE-ORIENTED STRATEGIES CAN WORK: THE CHILDREN OF FAMILIES WHO USED
VOUCHERS TO MOVE FROM HIGHER TO LOWER POVERTY NEIGHBORHOODS HAD HIGHER ADULT EARNINGS, THOUGH THIS
EFFECT WAS MUCH GREATER FOR CHILDREN WHO MOVED AT A VERY YOUNG AGE. ON THE OTHER SIDE ARE “PLACE-
ORIENTED” POLICIES THAT SEEK TO BUILD UP DISADVANTAGED NEIGHBORHOODS AND MAKE THEM BETTER AND STRONGER.
• SAMPSON ARGUES THAT WE NEED TO IMPLEMENT BOTH, AND I AGREE. THE SHORT-TERM SOLUTION WOULD BE TO EXPAND
EXISTING PEOPLE-ORIENTED POLICIES, WHICH WOULD ALLOW TALENTED KIDS TO AVOID THE NEGATIVE EFFECTS OF THEIR
OLD NEIGHBORHOODS. THE LONGER-TERM STRATEGY WOULD BE TO SUPPORT MORE SUBSTANTIAL INVESTMENTS TO
IMPROVE DISADVANTAGED NEIGHBORHOODS. AS SAMPSON POINTS OUT: “WHAT POOR RESIDENTS SEEM TO WANT MOST IS
NOT TO MOVE BUT SIMPLY TO HAVE THEIR COMMUNITIESREVITALIZED.”
24. • TO MAKE THIS POSSIBLE, SAMPSON ARGUES IN FAVOR OF WHAT NYU’S PATRICK SHARKEY HAS DUBBED
“DURABLE INVESTMENTS” IN NEIGHBORHOODS—LARGE-SCALE INTERVENTIONS IN EDUCATION, HEALTH,
EMPLOYMENT, CRIME-REDUCTION, COMMUNITY SOCIAL SERVICES, AND THE WHOLE GAMUT OF STRATEGIES
REQUIRED TO COMBAT THE LONG LEGACY OF PERSISTENT DISADVANTAGE IN THESE PLACES. SAMPSON MAKES
AN ESPECIALLY POWERFUL CASE FOR WHAT HE CALLS “AFFIRMATIVE ACTION FOR NEIGHBORHOODS,” WHICH
WOULD INVOLVE THINGS LIKE CASH ASSISTANCE OR REDUCED TAXES RATES FOR RESIDENTS IN POOR OR
HISTORICALLY DISADVANTAGED AREAS.
• ALTHOUGH AMERICA HAS LONG BEEN CONSIDERED THE LAND OF OPPORTUNITY, OPPORTUNITY HASN’T BEEN
EQUAL FOR QUITE SOME TIME, IF EVER. AS THE MIDDLE HAS FALLEN OUT OF OUR CITIES, INEQUALITY IS BAKED
INTO OUR INCREASINGLY DIVIDED GEOGRAPHY. “THE SALIENCE OF NEIGHBORHOOD DIFFERENCE HAS
PERSISTED ACROSS LONG TIME SCALES AND HISTORICAL ERAS,” CONCLUDES SAMPSON, ADDING THAT
“SPATIAL ARRANGEMENTS CONSTITUTE A FUNDAMENTAL ORGANIZING DIMENSION OF SOCIAL INEQUALITY.” IN
OTHER WORDS, WHERE WE END UP IN LIFE LARGELY DEPENDS ON WHERE WE WERE BORN.