Charlotte’s poor struggle to move up

This was originally published Jan. 24, 2014.

Climbing out of poverty is a bigger struggle in Charlotte than in other large U.S. cities, a new study shows.

The Charlotte area ranked last among the country’s 50 largest metro areas for upward mobility, according to researchers at Harvard University, University of California, Berkeley and the Treasury Department.

The study, published this week by the National Bureau of Economic Research, used 2012 data to measure how likely it is for children whose parents are in the bottom 20 percent of the national income distribution to reach the top 20 percent of the income distribution themselves.

Charlotte’s ranking: 50th out of the 50 largest metro areas and 97th out of the top 100. Charlotte ranked poorly in a similar study released last year.

Other cities in the Carolinas performed just as poorly this time. Columbia placed 99th, Fayetteville placed 98th and Greensboro placed 94th.

In Charlotte, it’s a struggle that Carson Dean sees daily. Dean is the executive director of the Men’s Shelter. The shelter sleeps about 325 men a night at its two locations and has put 250 men into housing so far this fiscal year.

“A lot of folks that we serve, even if we help them with employment and housing ... they’re going to always be in a pretty precarious situation,” Dean said.

The results of the study didn’t surprise Randall Hitt, chief advancement officer at Charlotte’s Community Link, an affordable housing nonprofit.

“What we have found is there are jobs out there that are more or less low-income,” said Hitt. “But there doesn’t seem to be anything to notch them into a solid middle class.”

Hitt estimated that 60 percent to 70 percent of Community Link’s clients work. Dean said nearly 50 percent of the people at the Men’s Shelter have jobs, though many are part-time or seasonal jobs.

“Is it likely they’re going to get $10 or $11 an hour? Sure,” Dean said. “Is it likely they’re going to get $18 or $20? If they’re older, probably not.”

Dean, however, said he believed Charlotte’s leaders are starting to confront the mobility problem.

Unreachable dream?

This week’s study linked several factors with mobility: segregation, family structures, inequality, social capital and school systems.

The study also showed that young Americans from low-income families are as likely to move into the ranks of the affluent today as those born in the 1970s.

Democratic and Republican lawmakers alike have expressed alarm over what had been seen as diminishing opportunities for economic advancement through hard work and ingenuity.

The study suggests that upward mobility has largely remained the same for generations.

The study found that 9 percent of children born in 1986 to the poorest 20 percent of households were likely to climb into the top 20 percent - little-changed from 8.4 percent for such children born in 1971.

“Absolutely, we were surprised” by the results, Harvard University economist Nathaniel Hendren said. He is one of the report’s authors, along with Harvard’s Raj Chetty, Emmanuel Saez and Patrick Kline of Berkeley and Nicholas Turner of the Treasury Department.

Worries have been growing across the political spectrum about an expanding divide between America’s rich and the rest: The top 1 percent of Americans accounted for 22.5 percent of income earned in the United States in 2012. That is one of the highest figures since the 1920s and up from a low of 8.9 percent in 1976, according to a database maintained by Saez.

But the fact the top 1 percent are pulling away has had little effect on the ability of those in the bottom fifth to rise to the top fifth, the study found.

The findings are open to different interpretations: They could suggest that government programs to help the poor have made little headway in increasing economic opportunity. Or they could suggest that economic advancement would have become harder without such programs.

“My concern is that there may be less mobility in the future,” former White House economic adviser Alan Krueger said. The cost of a college education, for instance, is increasingly difficult for low- and middle-income families to afford.

Hendren emphasizes that it’s still harder to move from poverty to affluence in the United States than in most other wealthy countries.

In a 2012 study of 22 countries, economist Miles Corak of the University of Ottawa found that the United States ranked 15th for social mobility among wealthy countries. Only Italy and the Britain ranked lower.

“In some sense, how could it have gotten worse?” Hendren said. “It’s not like we’re losing the American Dream. We never really had it.”

The Associated Press contributed.

Odds of moving up

1. San Jose, CA - 12.9 percent

2. San Francisco, CA - 12.2 percent

3. Washington, DC - 11 percent

4. Seattle, WA - 10.9 percent

5. Salt Lake City, UT - 10.8 percent


46. Indianapolis, IN - 4.9 percent

47. Dayton, OH - 4.9 percent

48. Atlanta, GA - 4.5 percent

49. Milwaukee, WI - 4.5 percent

50. Charlotte - 4.4 percent

Source: The Equality of Opportunity Project