Economic segregation makes it hard for the poor to move up the ladder. That’s just not healthy in a democracy. We have to do something.
The Seattle Foundation held an event recently, called “The Fragile American dream.” Even here in booming Seattle, it’s difficult for many people to improve their economic situation.
The foundation plays an important role in identifying community needs and marshaling forces to meet those needs. Doing that requires a deeper understanding of issues than casual observation provides, so the foundation hosted a briefing by Erin Currier, director of financial and economic mobility at The Pew Charitable Trusts.
Currier said that wealth is influenced by multiple factors, including where people live — the state, city, right down to the neighborhood.
She said in Seattle, 11 percent of people who were raised at the bottom eventually make it to the top, versus 4 percent nationally. Seattle ranks fourth highest in the country in terms of upward mobility from the bottom, and the state of Washington generally ranks high.
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“As a city you have a lot to be proud of,” Currier said. But she also identified an exception to Seattle’s record of fostering mobility. Economic segregation in Seattle restricts mobility for many and does so dramatically for black families, who tend to live in poorer neighborhoods. Areas of concentrated poverty reduce access to good education, jobs and security and tend to make upward mobility difficult.
Median income in Seattle is more than $80,000, with the national median at $57,000. But for black families in Seattle, the median income is $36,000. That’s lower than the national median for black households, which is $38,000.
Pew researchers studied families across the nation in five levels based on income, the money a household earns in a year, and five based on wealth, how much money is left after accounting for everything a family owes. Currier said it is unusual for someone to fall out of the top level or for someone to rise from the bottom rung of either family income or wealth. Only 4 percent of Americans raised in the bottom fifth make it all the way to the top. That happens more often in Hollywood than in the real world, she said.
Currier said it is especially hard for black people around the country to move into a higher economic level than the one into which they were born. “More than half of African Americans raised at the bottom remain stuck at the bottom compared to a third of whites.” Even black people raised in middle-income homes tend to fall to a lower rung — more than 50 percent do.
Currier said that promoting equality of economic opportunity is the defining issue of our time. She said there are numerous reasons for economic gaps and no single solution. But we understand the main factors that affect how people fare:
• Financial capital: Can you pay your bill? Can you save? Can you give your kids extra help?
• Human capital: Ninety percent of people raised at the bottom who get a college degree move out of the bottom, she said.
• Social capital: Where you live and the networks you have matter.
There are huge differences in how successful different areas of the country are at breaking the cycle of poverty. In some places, mobility is worse than in Third World countries, she said.
Currier said that regardless of where they live, 92 percent of participants in Pew’s 2015 Survey of American Family Finances said financial stability is more important to them than upward mobility. That seems to reflect significant pessimism about economic opportunity, and that’s not healthy in a democracy. We have to do something.
Currier said tackling racial and economic segregation will be a key part of moving Seattle forward.
Representatives of some of the organizations trying to narrow income and wealth gaps spoke about their efforts in a panel discussion I moderated after Currier’s briefing.
Misha Werschkul, executive director of the Washington State Budget & Policy Center, highlighted the negative effect of Washington’s tax system, which places a high burden on low-income families.
Nicole Vallestero Keenan, director of the Fair Work Center, spoke about educating workers about their rights and helping protect those rights.
And Michael Brown, vice president of community programs at the Foundation, described work to empower communities to influence policy decisions that affect their well-being.
We’re fortunate to live in a place where so many people and institutions are challenging the most stubborn barriers to upward mobility. But there’s still difficult work to be done.