Area kids’ economic prospects shaped by race, gender

Racial disparities, in Chattanooga and across the country, remain a stubborn reality despite decades of private and public spending toward efforts meant to close gaps.

These are just a few sobering examples from U.S. Census data: In Hamilton County, 33.1 percent of whites have a college degree, while just 15.2 percent of African-Americans and 17.2 percent of Hispanics hold a four-year diploma. The median household income for whites is now $55,963 a year, while the median household income for African-American families is $29,416 and $37,747 for Hispanic families. Seventy-two percent of white families own their homes, yet 42 percent of

African-Americans and only 29.2 percent of Hispanic families own their own homes.

The question of why is still a point of much debate, but a study published just a few months ago by economists at Stanford and Harvard universities sheds new light on why these local disparities persist, and argues, based on an analysis of 20 million Americans’ anonymous tax records, that cities such as Chattanooga must address the factors stifling the economic mobility of African-American men if they want to see racial gaps narrow.

In the Chattanooga area, according to the data, white and Hispanic men born to families among the area’s lowest 25 percent of earners grow up to earn $23,730 on average, while black men born to families among the lowest 25 percent of earners earn $18,530 on average. All three fall below the national averages for men born to families in the lowest 25 percent of earners — $28,870 for white men, $27,160 for Hispanic men and $20,260 for black men.

The same gap is evident in the average earnings of children from Chattanooga families in the top 75 percent. In fact, the data shows that a black man born to a Chattanooga family in the top 75 percent of earners will make, on average, $30,590 as an adult. A white man born to a local family in the top 75 percent of earners will make, on average, $36,660. The national average for black men from families in the highest income bracket is $31,440, and the national average for white men from families in the highest income bracket is $41,190.

“In 99 percent of neighborhoods in the United States, black boys earn less in adulthood than white boys who grow up in families with comparable income,” according to the study.

White-black earnings gaps exist in every major Tennessee city, according to the data, but the male, white-black earnings gap is lower in Chattanooga than in Knoxville, Memphis and Nashville. Also, black men from low- and high-income families grow up to earn more in Chattanooga than than they do in Knoxville, Memphis or Nashville.

Hispanics are moving up in the income distribution across generations, the nationwide dataset shows, while blacks are not. This is a trend across the country, including Chattanooga, according to Stanford University economist Raj Chetty and Harvard University economist Nathaniel Hendren. Black children born to parents among the lowest 25 percent of earners have a 2.5 percent chance of rising to the top quintile. Yet, poor whites have a 10.6 percent chance of making it to the top.

“Black children born to parents in the top income quintile are almost as likely to fall to the bottom quintile as they are to remain in the top quintile,” the researchers wrote. “By contrast, white children born in the top quintile are nearly five times as likely to stay there as they are to fall to the bottom.” So what’s going on?

Black families are falling behind because black boys are falling behind, according to the study. “The black-white income gap is entirely driven by differences in men’s, not women’s, outcomes.”

Black women from both low-income and high-income families earn slightly more than white women from the same income brackets. Black women born to families among the lowest 25 percent of Chattanooga area earners make $19,400 on average in adulthood, while white women born to families among the lowest 25 percent of Chattanooga area earners make $15,171. Black women born to families among the top 75 percent of earners

grow up to make $30,590 on average, yet white women from families among the top 75 percent of earners will make just $27,161.

The black-white gaps in high school completion rates, college attendance rates and incarceration are all substantially larger for men than for women.

And being born into a high-income family doesn’t protect black men, who have a much higher rate of downward mobility than any other group.

There are many theories as to why, but the most prominent explanation is that black and white boys have different outcomes because they grow up in different neighborhoods.

Still, Chetty and Hendren said the data shows disparities are evident even among children who grow up on the same block, which reveals that differences in neighborhood-level resources, including school quality, cannot explain the gaps between white and black boys.

“Black and white boys have very different outcomes even if they grow up in two-parent families with comparable incomes, education, and wealth, live on the same city block, and attend the same school,” the study reads. “This finding suggests that many widely discussed proposals may be insufficient to narrow the black-white gap themselves, and suggest potentially new directions for policies to consider.”

Mentoring programs for black boys, efforts to reduce racial bias among whites, interventions to reduce discrimination in criminal justice and efforts to facilitate greater interaction across racial groups need to be prioritized, argue Chetty and Hendren, because they are initiatives that cross neighborhoods and class lines and actually work to create a new community culture.

“The black-white gap in upward mobility is driven primarily by environmental factors that can be changed,” wrote Chetty and Hendren.

Alexa LeBoeuf, director of community engagement and design at UnifiEd, said policies seeking to diversify schools, both racial and socioeconomically, will not alone sufficiently address the needs of students in racially isolated and low-income schools. Increasing economic mobility rates will require a multi-sector conversation.

“Research shows all students benefit academically from programmatic

efforts to diversify teaching staff and increase the cultural competency of those in school buildings through anti-bias trainings and restorative justice strategies,” said LeBoeuf. “A community commitment to equity is important if black students are going to move from disproportionately carrying the weight of economic immobility as they transition into adulthood.”

Troy Kemp, executive director of the National Center for the Development of Boys, based in Chattanooga, said he has two perspectives on the data as a black man.

“There is one side that says it’s racism,” he said. “Kids don’t have the same networks. When you look at Chattanooga, it’s divided on all types of levels. I have never seen anything like it.”

Another part of him wonders how feeling stuck or seeing so many others remain stuck, economically, affects black men and their choices.

“When someone is exposed to a person who is prejudiced or racist, the person who is offended loses trust. When you lose trust, you can’t take advantage of the opportunities you are exposed to,” said Kemp.

Chetty and Hendren have published several watershed studies on economic mobility in recent years. Their most noted study, published in 2015, was featured in the Times Free Press series “The Poverty Puzzle” and showed that some places in America promoted economic mobility for poor kids while others, such as Chattanooga, did not.

The American dream of upward mobility has long been fading across the country, their research shows, but the South, in particular, appears to be a dead zone for mobility.

Chetty and Hendren’s 2015 research showed that a lifetime in Hamilton County hurts poor and middle-class children, in terms of finding a spouse and earning a livable wage, more than it helps. In fact, their data showed that almost the entire nation — 91 percent of counties — did a better job of creating paths to high earnings for children born at the bottom than Hamilton County. In some Western states, more than 30 percent of poor children climb to a family income of $70,000 per year by age 30 or $100,000 by age 45. In Chattanooga, just 5.9 percent do.

The reasons, according to the 2015 study published by Chetty and Hendren

and University of California-Berkeley professors Emmanuel Saez and Patrick Kline, may lie in five measures that many communities widely differ on: segregation, inequality, schools, social capitol and family structure.

“Research clearly shows that economically inclusive communities achieve greater and more sustainable growth,” said Maeghan Jones, president of the Community Foundation of Greater Chattanooga. “We recognize there are barriers that prevent some of our neighbors from realizing their potential. Unfortunately, the numbers show that many of those barriers exist along racial and gender lines.”

The Community Foundation has named economic mobility as a priority for the coming year, and Jones said the foundation will explore funding opportunities that address job creation, home ownership and access to education. The foundation also wants to see funding requests for ideas that extend social capitol across classes and races, she said.

“When the board took on economic mobility as a priority, we went through an exercise where everyone told their mobility story,” she said. “In mapping those we came to see what led to family mobility, and one thing that came out was access to social capital.”

Networks have to be extended, said Jones. It’s a belief that led the foundation to invite a diverse group of community members onto the grant-making committee at the foundation, which is run by a board of 15, including one Hispanic and five African-American board members.

“We wanted to increase the diversity of opinions, backgrounds and experiences on the grant-making committee. It also created a pipeline for people to come onto the foundation board,” she said.

Jones said a lot of learning needs to take place, which is why the Community Foundation is bringing in trainers this month from North Carolina to talk with board members about things to consider as it works toward addressing racial disparities in economic mobility rates.

“These are the issues that we have to talk about,” said Jones. “We need tools and training to do that. We are investing in our board and staff to get that training.”