Officially our most recent recession began December 2007 and ended June 2009. The following chart provides an important perspective on the recovery period.
Stocks and profits have enjoyed a remarkable recovery. While income is slightly up over the period, it is critical to remember that this is average income and the increase largely reflects gains for those at the very top of the income distribution. Jobs and housing have yet to recover.
So, with returns to capital booming, it is easy to understand why business leaders are relatively content with current policies and, by extension, political leaders are reluctant to rock the boat.
Unfortunately, current policies are unlikely to do much to improve the job prospects or income of most workers. In fact, the rise in business profits owes much to our depressed labor conditions. Unless something dramatic happens, we can expect the next few years to look very much like the past few years.
Part of what makes professional basketball appealing, for kids who love to play as well as fans, is the idea that a person can come from humble beginnings and become a star. The players on the court, the narrative goes, are ones who rose to fame as a result of incredible dedication and extraordinary talent. Basketball, then, is a way out of poverty, a true equal opportunity sport that affirms what we think America is all about.
Seth Stephens-Davidowitz crunched the numbers to find out if the equal opportunity story was true. Analyzing the economic background of NBA players, he found that growing up in a wealthy neighborhood (the top 40% of household incomes) is a “major, positive predictor” for success in professional basketball. Black players are also less likely than the general black male population to have been born to a young or single mother. So, class privilege is an advantage for pro ball players, just like it is elsewhere in our economy.
The richest Black men, then, are most likely to end up in the NBA, followed by those in the bottom 20% of neighborhoods by income. Middle class black men may, like many middle class white men, see college as a more secure route to a successful future. Research shows that poor black men often see sports as a more realistic route out of poverty than college (and they may not be wrong). This also helps explain why Jews dominated professional basketball in the first half of the 1900s.
LeBron James was right, then, when he said, “I’m LeBron James. From Akron, Ohio. From the inner city. I am not even supposed to be here.” The final phrase disrupts our mythology about professional basketball: that being poor isn’t an obstacle if one has talent and drive. But, as Stephens-Davidowitz reminds us, “[a]nyone from a difficult environment, no matter his athletic prowess, has the odds stacked against him.”
Kids growing up in dense, urban environments often turn to basketball as their sport of choice. This is partly because it fits, in a physical sense. All things being equal, a basketball court takes up a lot less room than a football or soccer field. For the economically disadvantaged, it’s also relatively cheap to play. If you have a court available, you only need a pair of shoes and a ball. For this reason, whatever population finds itself in this type of environment tends to take up basketball.
That’s why the sport was dominated by Jews in the first half of the 1900s. Just like many African-Americans today, at that time many immigrant Jewish families found themselves isolated in inner cities. Basketball seemed like a way out. “It was absolutely a way out of the ghetto,” explained retired ball player Dave Dabrow. Basketball scholarships were one of the few ways low income urban Jews could afford college.
Today we refer to stereotypes about Black men to explain why they dominate basketball, but this is an after-the-fact justification. At the time, very different characteristics — stereotypes associated with Jews — were used to explain why they dominated professional teams. Paul Gallico, sports editor of the NY Daily News in the 1930s, explained that “the game places a premium on an alert, scheming mind, flashy trickiness, artful dodging and general smart aleckness.” All stereotypes about Jews. Moreover, he argued, Jews were rather short and so had “God-given better balance and speed.” Yep. There was a time when we thought being short was an advantage in the sport of basketball.
Never underestimate the power of institutions and how much things can change.
In the late 1990s, I turned down my publisher’s offer to do a third edition of my criminology textbook. It wasn’t just that editions one and two had failed to make me a man of wealth and fame. But it was clear that crime had changed greatly. Rates of murder and robbery had fallen by nearly 50%; property crimes like car theft and burglary were also much lower. Anybody writing an honest and relevant book about crime would have a lot of explaining to do. And that would be a lot of work.
I politely declined the publisher’s offer. They didn’t seem too upset.
If I had undertaken the project, I probably would have relied heavily on the research articles in The Crime Drop in America, edited by Al Blumstein and Joel Wallman. They rounded up the usual suspects – the solid economy, new police strategies, the incarceration boom, the stabilization of drug markets, anti-gun policies. But we all missed something important – lead. Children exposed to high levels of lead in early childhood are more likely to have lower IQs, higher levels of aggression, and lower impulse-control. All those factors point to crime when children reach their teens if not earlier.
Lead had long been suspected as a toxin, and even before World War I many countries acted to ban or reduce lead in paint and gasoline. But the U.S., thanks to the anti-regulatory efforts of the industries and support from anti-regulation, pro-business politicians, did not undertake serious lead reduction until the 1970s.
Kevin Drum at Mother Jones has been writing about lead and crime. Because race differences on both variables are so great, it’s useful to look at Blacks and Whites separately. In the late 1970s, 15% of Black children under age three had dangerously high rates of lead in their blood (30 mcg/dl or higher). Among Whites, that rate was only 2.5%. By 1990, even with a lower criterion level of 25 mcg/dl, those rates had fallen to 1.4% and 0.4%, respectively.
The huge reduction in lead was matched – years later when those children were old enough to commit crimes – with a reduction in crime. (note that the graphs show rates of arrest, which may somewhat exaggerate Black rates of offending):
Much of the research pointing to lead as an important cause of crime looks at geographical areas rather than individuals. A study might compare cities, measuring changes in lead emissions and changes in violent crime 20 years later. But studies that follow individuals have found the same thing. Kids with higher blood levels of lead have higher rates of crime. The lead-crime hypothesis is fairly recent, and the evidence is not conclusive. But my best guess is that further research will confirm the idea that getting the lead out was, and will remain, an important crime-reduction policy.
[A]rrest rates for violent crime have fallen much faster among black juveniles than among white juveniles… black juvenile crime rates fell further than white juvenile crime rates because they had been artificially elevated by lead exposure at a much higher rate.
But that depends on how you intepret the data. As the graphs of arrests show, the percentage reductions are roughly similar across races. Among Black youths, the arrest rates for all violent crime fell from 1600 per 100,000 to less than 700 – a 57% reduction. For Whites the reduction was from 307 to 140 or 54%. But in absolute numbers, because Black rates of criminality were so much higher, the reduction seems all the more impressive. In that sense, those rates “fell further.”
Arrest rates for Blacks are still double those of Whites for property crimes, five times higher for homicide, and nine times higher for robbery. Lead may be a factor in those differences. Remember the lag time between childhood lead exposure and later crime. Twenty years ago, high blood levels of lead among children 1-5 years were three times as high for Blacks as for Whites.
Poverty in the United States is stereotypically associated with racial minorities in urban centers. However, a closer look at social geography reveals a more complex situation: a majority of poor people are white and live in the suburbs. This makes sense when you consider that whites are the largest racial group in the U.S., making up 75% of the population, and that there are three times as many suburbanites than urbanites.
A majority of Americans are losing wealth, and we know it’s going straight to the top. This is not a conspiracy theory, but the economic arrangement of the last 40 years. The New Deal, which created the middle class and the American Dream, was systematically dismantled by elite interest. The revolving door, the shuffling of elites in top positions of power between the public and private sectors, made this possible. The New Deal was abandoned for neoliberal policy. As a result, the comfortable middle class lifestyle was replaced by unemployment and working class struggle.
Suburban poverty normally reflects the spread of metropolitan poverty, but in recent years, suburban poverty has been growing at a faster rate. From 2010-2011, poverty in America’s 100 largest metro areas increased by 5.9% overall. Suburban poverty grew at a rate of 6.8%, while urban poverty grew only 4.7%. In general, the poverty rates in urban areas are still higher (21%) than those in the suburbs (11%). Most notable is the rate of change in the suburbs, which can be attributed to increasing inequality, the housing market crash, gentrification, efforts to make low-income people more mobile, and public housing vouchers.
For the past decade, suburbanites commuted between suburbs rather than into cities for work. More affluent, nearby suburbs provide low-wage service jobs in food and retail. Poverty rates in suburbia are rising due to a crumbling middle class, but the poor are still mainly concentrated in inner-ring suburbs close to cities, and on the fringe — former rural areas consumed by suburban sprawl.
Poverty’s expansion to the suburbs is a symptom of an increasingly unequal society. The geographic isolation of the suburban poor in the inner and outer rings of suburbia troubles the validity of the claim that poverty moved to the suburbs. More accurately, people are getting poorer and more people live in the suburbs—or areas now designated as such. It’s plausible that economic inequality and leapfrog developments have changed the sociogeographic landscape. Low-income earners are displaced to the outskirts of the city (inner-ring of the suburbs) due to gentrification, and the rural poor are now more easily counted among the suburban poor due to suburban sprawl. Whatever the case, suburban poverty presents unique challenges to policy makers because federal antipoverty resources are tailored for densely populated urban areas. The stereotypical images of inner city poverty and suburban affluence are the ultimate fiction.
Kara McGhee is a PhD student in sociology at the University of Missouri specializing in culture, identity, and inequalities. She is a regular contributor for The WILD Magazine.
We got another reminder last week that despite complaints about federal government programs that give money to the poor, when it comes to taxes, the government is much more generous to the wealthy. The news came from a report from the Congressional Budget Office on tax expenditures.
These are the ways that the government uses the tax system to give money to people. Some expenditures are tax credits, which can take the form of cash payments. Others are tax breaks — taxing people less than the going rate. For example, if I am in the 35% tax bracket, but the government charges me only 15% on the $100,000 I made playing the stock market, the government is giving me $20,000 it could otherwise have had me pay in taxes. That’s an expense. The preferential rate for my luck in the market costs the government $20,000.
The justification for these expenditures is that they are a way the government can encourage people to do something that it wants them to do. With tax breaks, the government is basically paying people by not charging them full tax fare — encouraging them to buy a house or give to charity or get health insurance at their work. Similarly with the tax credits that go mostly to the poor. We want people to hold a job and to care for their kids. The child tax credit gives people more money to care for their children. The Earned Income Tax Credit pays them for working, even at jobs that pay very little. By the same logic, the government is paying me to invest my money in companies — or put another way, to play the stock market.
This government largesse, however, benefits some people more than others:
About half of all tax expenditures go to the top quintile (top 20% of income earners). The bottom 80% of earners divide the other half. And within that richest quintile, the top 1% receive 15% of all tax expenditures (this distribution of tax breaks roughly parallels the distribution of income). Were you really expecting Sherwood Forest?
Here is a breakdown of the costs of these different tax expenditures:
The Earned Income Tax Credit, which benefits mostly the poor, costs less than $40B. The tab for the low tax on investment income (capital gains and dividends) is more than twice that, and nearly all of that goes to the top quintile. More than two-thirds goes to the richest 1%.
Dylan Matthews at the Washington PostWonkBlog regraphed the numbers to show the total amounts overall plus the amounts in each category for each income group:
The point? People complain about government payments to the poor, but tax breaks are also payments, though less obviously so, to the rich. And those tax breaks cost the government a lot more money.
The magic of demographic knowledge is a memorable moment in John Sayles’s 1984 movie “Brother From Another Planet.” On the A train, a young man shows an elaborate card trick to the title alien, who looks like an African American but seems to have no understanding of the trick. So the magician offers another.
From 59th St. to 125th St. is one stop on the express. But as the movie shows, that short ride covers a large demographic change, and it’s not just racial. The New Yorker has posted interactive graphics showing the median income of the census tracts surrounding subway stations.
Take the A train one stop — from the southern border of Central Park to a few blocks above its northern border — and see median income drop by $100,000.
Many other lines travel the extremes of economic inequality. My line is the 2:
In the early morning commute, I see blue collar workers in their hoodies or rough jackets and steel-toe boots next to well-dressed people reading The Wall Street Journal. They didn’t get on at the same stop. The people who live in and work in the Wall Street census tract, which includes Park Place, are not on the train. Here’s what their housing looks like:
And here is Franklin St., Brooklyn:
The subway demographic trick is not limited to New York. Here’s a time-lapse video of the Red Line of Chicago’s CTA.
Despite the social class segregation in housing, in cities like New York and Chicago, people of vastly different economic circumstances are likely to share the same subway car, at least for a few stops. Yet I don’t get a sense of strong resentment or even envy among the have-nots (though I wish I had systematic data on this). This is similar to the findings of Rachel Sherman, who studied how workers at high-end hotels thought of their guests.
New York and Chicago, however, are also where the rich are more likely to be liberal and in favor of redistributionist policies. As Andrew Gelman has shown, the wealthy in rich states are far more liberal than the wealthy in poor states. That may be partly because in rich states, the wealthy live in the large cities. It would be interesting to see if we saw the same effect if we looked at Upstate New York, Downstate Illinois, or Massachusetts outside Rte. 128.
Happy Graduation, Seniors! Congratulations! What’s next? Below is some sociologically-inspired, out-of-the-box advice on work, love, family, friendship, and the meaning of life. For new grads from the two of us!
1. Don’t Worry About Making Your Dreams Come True
College graduates are often told: “follow your passion,” do “what you love,” what you were “meant to do,” or “make your dreams come true.” Two-thirds think they’re going find a job that allows them to change the world, half within five years. Yikes.
This sets young people up to fail. The truth is that the vast majority of us will not be employed in a job that is both our lifelong passion and a world-changer; that’s just not the way our global economy is. So it’s ok to set your sights just a tad below occupational ecstasy. Just find a job that you like. Use that job to help you have a full life with lots of good things and pleasure and helping others and stuff. A great life is pretty good, even if it’s not perfect.
2. Make Friends
Americans put far too much emphasis on finding Mr. or Ms. Right and getting married. We think this will bring us happiness. In fact, however, both psychological well-being and health are more strongly related to friendship. If you have good friends, you’ll be less likely to get the common cold, less likely to die from cancer, recover better from the loss of a spouse, and keep your mental acuity as you age. You’ll also feel more capable of facing life’s challenges, be less likely to feed depressed or commit suicide, and be happier in old age. Having happy friends increases your chance of being happy as much as an extra $145,500 a year does. So, make friends!
This might be you. Research shows that young people’s expectations about their marital status (e.g., the desire to be married by 30 and have kids by 32) have little or no relationship to what actually happens to people. So, go with the flow.
And, if you’re single, you’re in good company. Single people spend more time with friends, volunteer more, and are more involved in their communities than married people. Never-married and divorced women are happier, on average, than married women. So, don’t buy into the myth of the miserable singleton.
4. Don’t Take Your Ideas about Gender and Marriage Too Seriously
If you do get married, keep going with the flow. Relationship satisfaction, financial security, and happy kids are more strongly related to flexibility in the face of life’s challenges than any particular way of organizing families. The most functional families are ones that can bend. So partnering with someone who thinks that one partner should support their families and the other should take responsibility for the house and children is a recipe for disaster. So is being equally rigid about non-traditional divisions of labor. It’s okay to have ideas about how to organize your family – and, for the love of god, please talk about both your ideals and fallback positions on this – but your best bet for happiness is to be flexible.
5. Think Hard About Whether to Buy a House
Our current image of the American Dream revolves around homeownership, and buying a home is often taken for granted as a stage on the path to full-fledge adulthood. But the ideal of universal home ownership was born in the 1950s. It’s a rather new idea.
With such a short history, it’s funny that people often insist that buying a house is a fool-proof investment and the best way to secure retirement. In fact, buying a house may not be the best choice for you. The mortgage may be less than rent, but there are also taxes, insurance, and the increasingly common Home Owners Association (HOA) fees. You may someday sell the house for more than you bought it but, if you paid interest on a mortgage, you also paid far more than the sale price. You have freedom from a landlord, but may discover your HOA is just as controlling, or worse. And then there’s the headache: renting relieves you from the stress of being responsible for repairs. It also offers a freedom of movement that you might cherish.
So, think carefully about whether buying or renting is a better fit for your finances, lifestyle, and future goals. This New York Timesrent vs. buy calculator is a good start.
6. Think Even Harder about Having Kids
One father had this to say about children: “They’re a huge source of joy, but they turn every other source of joy to shit.” In fact, having children correlates with both an increased sense of purpose in life and a long-lasting decrease in individual and marital happiness. Having kids means spending a lot of your short life and limited income on one source of joy. It’s not a bad decision. But it’s also not the only good decision you can make. We want to think we can “have it all” but, in fact, it’s a zero sum game. You have only so much time and money and there are lots of ways to find satisfaction, pleasure, and meaning in this life. Consider all your options.
7. Remember: If You Change Your Mind, You’re Still Right!
For some reason Americans feel ashamed when they discover they’re wrong. So much so that we often refuse to admit it or go on the counter-attack. Being told we’re wrong, though, is really great! It means we have a good chance of not making that mistake in quite that way again. That doesn’t mean it feels good, but it is a very good thing to learn how to accept that we’re wrong – and, trust us, you will be, lots and lots of times, about many different things — without treating every correction as a threat to our very identity. So next time someone corrects your facts, logic, or point of view, say “Hey thanks!”
8. Listen When People Point Out Your Privilege
One of the hardest ways to be wrong involves saying something that is inadvertently prejudicial. When someone points out that something we said or did was racist, sexist, ableist, homophobic, classist or otherwise, we often feel attacked. Remember, though, that if someone bothers to engage with you on this kind of issue, it means they think you’re worth it. It’s really easy to write someone off as racist; it’s much harder to start a dialogue on the issue. If they do the latter, it’s because they’ve decided that you’re a good person who’s worth their time and energy. So instead of launching into an explanation for why and how you can’t possibly be prejudiced, ask “Can you tell me what you mean?” and listen listen listen.
9. Make Allies and, Yes, Change the World
C. Wright Mills one said that sociology was both terrifying and magnificent. It is terrifying because it teaches us that our lives are not ours to determine, but are subject to cultural norms and institutional forces over which we have very little control. It’s magnificent, however, because once we can see the system for what it is, we can agree to change it. In other words, we’re stuck in a system not of our own making, but we’re in it together. So, when you come across an unfair workplace, an unjust law, a biased educational practice, or some other injustice, know that — with the right allies, hard work, and a little luck — you may just have the power to change it.