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Your ZIP Code May Be Dragging You Down

Communities play a huge role in upward mobility, which is why the U.S. has seen only modest improvement over 40 years.

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A 40-year study of economic opportunity in the United States shows a lot of variance by state.

Cell phones, cable television, and social media have done precious little to improve upward mobility in the United States over the last two generations. The reason? Some regions of the country are thriving while others are sinking. Where you live will tell you whether you're one of the haves or the have-nots.

"Success is driven by hard work and perseverance, but this is a more nuanced picture. Another huge factor is the community," says Opportunity Nation Executive Director Mark Edwards. "If the ZIP code you're in has a low opportunity score, the deck is stacked against you.

 

First, the good news. Access to education, particularly preschool, has improved tremendously since 1970, according to a new study from the social-science group Measure for America and Opportunity Nation. But there is also bad news. Those gains have been dragged down by the country's poor economic performance, particularly from 2000 to 2010.

Overall, the researchers give the country a small gain of 6 points over 40 years on a 100-point measure of economic opportunity. In 1970, the "opportunity score" was 44.8. In 2010, it was 50.8.

The "opportunity index" developed by these researchers takes into account community factors beyond economics that also hinder or promote social mobility. It tracks educational and civic life statistics such as preschool enrollments, crime rates, and the number of "disconnected youth" who aren't in school and don't have jobs, and adds them to economic factors such as unemployment and poverty rates.

 

We have recovered a bit since 2010. The researchers now give the country an opportunity score of 53.9 using some additional data points (such as access to grocery stores or WiFi).

Even taking into account a bounce back from the woes of 2010, the new report shows a country that was much stronger economically in 1970 than it is now, even though at that time most people could not imagine a computer in their home, let alone their hand. The economic losses have been balanced by overall improvements in communities and education over that same time.

But the national picture masks important geographic differences. Location really matters when it comes to whether people have any hope of climbing the economic ladder. Mississippi's Harrison County (which houses Biloxi) has an opportunity score of 35.7, 10 points lower than the state score. New York City is at 76.5, 14 points above the New York state score and 23 points above the national score.

From a historical perspective, Michigan and Nevada are both in worse shape now than they were in 1970. Michigan is only slightly worse off, with a score of 46.2; it was 46.4 in 1970. Nevada's opportunity measure, which stood at 45.4 in 1970, took a nose dive between 2000 and 2010, dropping more than 10 points to 35.1. All other states have shown modest improvement. Virginia was the "most improved" state, moving from a 44.7 in 1970 to a 59.6, according to the report.

 

With its yearly index and the most recent historical report, the researchers are trying to expand the economic understanding of the United States beyond simple employment statistics. "If you have a job but it's not paying a living wage, that doesn't help. If you have a job but you can't get healthy food, that doesn't help," Edwards says. "These factors play a powerful role."

These added factors offer color and context to sometimes bland economic figures, but they can also complicate the picture in ways that can be tough to explain. For example, preschool enrollment has skyrocketed since 1970, which is the main reason the report's education score shows such a dramatic rise over time. Economists and educators generally view preschool as one of the best ways to ensure that disadvantaged children graduate from high school and (in theory) contribute to the economy. Yet the top-line economic figures in the historical report don't reflect economic improvement. The economic score actually dropped from 62.4 to 48.5 over 40 years.

That doesn't mean preschool hasn't helped, but you need more context (outside of the report's scope) to understand how early education is impacting the economy. The short answer is that it may be too soon to tell. In 1970, there was nowhere to go but up with preschool. Government-funded Head Start had been created just five years earlier, and only about 10 percent of 3- and 4-year olds attended some form of preschool, most of it private. Now, 48 percent of preschool-aged children are in a prekindergarten program. What's more, 28 percent of kids are in preschool programs that receive government funding, according to the National Institute for Early Education Research.

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Asked about the lack of economic improvement despite these educational gains, Edwards suggest that employers have evolved, too. In the past 40 years, they have moved beyond hiring mere high school graduates. "The kinds of jobs available today are a different kind of skill set," he says. That explains why unemployment rates are well above where they were in 1970. Back then, the annual unemployment rate was 4.9 percent, according to BLS. In 2013, it was 7.5 percent.

It's not hard to find examples of how the job markets have evolved. Jobs in the garment industry, which don't require much training, plunged from almost 1 million in 1990 to about 161,000 in 2010. The apparel workforce is now one-tenth of its previous size, according to the Bureau of Labor Statistics. By contrast, business and technical jobs that require specialized training (i.e., accounting, computer services, design, consulting) almost doubled in the same 20 years, from 4.5 million to 7.4 million.

The opportunity data, in theory, will help policymakers figure out ways to decrease the high school dropout rate in areas where it is particularly high, which in turn should reduce crime. But if the job availability for high school graduates is limited to fast-food or janitorial work, what good does it do? That's where the business community needs to figure out how to give young people the specific skills they need so they can hire them. Edwards says local employers should have a stronger voice in the community when it comes to educating young people.

Opportunity Nation is actively lobbying Congress to pass a new job-training bill that will expand federal youth job programs from ages 21 to 24, a high priority for organizations that try to keep the number of disconnected youth relatively low. Under the legislation, they won't have to turn a client away as soon as he or she can buy alcohol.

The bill also would increase employer representation slots on local "workforce investment boards" that coordinate school, training, and employment activities. The measure is at the end of a long road of negotiations between the House and the Senate. It will likely pass the Senate this week. And if it is not amended, it will be passed shortly thereafter by the House.

Don't Miss Today's Top Stories

Chock full of usable information on today's issues."

Michael, Executive Director

Concise coverage of everything I wish I had hours to read about."

Chuck, Graduate Student

The day's action in one quick read."

Stacy, Director of Communications

Great way to keep up with Washington"

Ray, Professor of Economics

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