Where Black Families Reach the American Dream: Economic Mobility Study Reveals Key Factors

[00:00:04]Your neighborhood will determine much about your life trajectory.

[00:00:07]That's according to the Census Bureau.

[00:00:09]You can see the results for yourself in the opportunity atlas.

[00:00:12]The areas marked in green on this map show were low income black families are producing upwardly mobile children.

[00:00:19]We don't choose where we're born, right?

[00:00:21]So now we know that just where you're born down to the census tract can determine so much about your future.

[00:00:29]There's a whole body of work being done on this topic of economic mobility and trying to really peel back what are the levers.

[00:00:39]Drive and ambition and talent is everywhere, but equitable access to opportunity is not always there.

[00:00:48]In Washington, D.C., a strong public sector has produced many upwardly mobile black families.

[00:00:53]It's no secret that you have the- Prince George county nearby- is the leading per capita income for African-Americans.

[00:01:02]I don't think it's any coincidence that it's adjacent to the Washington, D.C., area.

[00:01:07]Woodrow Wilson is located in probably the highest-end neighborhood in all D.C.

[00:01:12]I was very lucky to be able to go there in high school.

[00:01:15]I was actually accepted accidentally after a few days of kind of back and forth.

[00:01:19]They finally let me attend.

[00:01:21]So that sort of accidental mistake on their part was quite life changing for me.

[00:01:26]So what makes areas like D.C.

[00:01:28]so special for black families?

[00:01:41]So we're located in Deanwood, Washington, D.C.

[00:01:43]It's on the far end of Northeast, I grew up here, we're sitting in the home where I grew up. My mom still lives here.

[00:01:50]She's lived in this neighborhood for over 40 years.

[00:01:53]It's sort of lower end working class neighborhood that is now kind of becoming a bit more gentrified.

[00:02:02]But certainly 20 years ago when I lived here was, you know, kind of a rough and tumble place to grow up.

[00:02:10]The median rent and Deanwood is 47% lower than the city as a whole.

[00:02:16]The area has a relatively low incarceration rate, and it also has low rates of discrimination.

[00:02:21]That's measured using implicit bias testing, as well as an explicit analysis of Google search results.

[00:02:28]Should we maybe to put it in a less diplomatic way, should we blame poverty on on people, on individuals and the choices they've made?

[00:02:36]Or are there external factors that are really determining their life course?

[00:02:40]The findings were published in this paper.

[00:02:42]This particular study followed 20 million Americans over 35 years.

[00:02:46]They tracked which children went on to earn more than their parents as they matured into adulthood.

[00:02:51]So we can actually put a dollar amount on the contribution of every census tract and commuting zone county in the U.S.

[00:02:59]on kids adult income.

[00:03:00]You know, you can be an individual success story, but we still know that there's something going on at the neighborhood level that's, on average, driving differences across kids.

[00:03:11]When it comes to raising black boys, strong results are coming from the suburbs of Houston and San Antonio. The highest performing neighborhoods are in New York City and near DC. The outcomes from Deanwood are relatively poor when compared to the national median.

[00:03:26]But if the variables are set to focus on the black population, the neighborhood's potential begins to show. Andre's story is a highlight.

[00:03:34]I really had no ambitions towards going to college because that wasn't a pathway that I had seen over the course of my life.

[00:03:43]However, my college counselor at Wilson essentially said that she wouldn't help me with my applications if I didn't apply to Morehouse.

[00:03:51]I ended up getting accepted to Morehouse on academic probation.

[00:03:55]Some groups have taken to opportunity faster than others.

[00:03:58]The numbers don't lie.

[00:04:00]Women are really driving participation in post-secondary education, which has been a traditional ladder of economic mobility.

[00:04:08]We know from broader research that boys are more sensitive to family and environmental inputs than girls are in terms of their later on outcomes, like an education or an income.

[00:04:20]So that seems to be consistent with what I'm finding.

[00:04:23]The other piece that's important is that when you think about our criminal justice system, it really disproportionately affects one group in the population, and that's black men.

[00:04:33]Over the 20th century, many black Americans took up jobs in the public sector Between roughly 1915 and 1970, six million Black Americans left the U.S.

[00:04:45]South, where 90% of the black population lived at the turn of the 20th century and migrated to cities in the north and West and the Midwest of the country.

[00:04:56]In the 1960s.

[00:04:57]The federal government and the public sector overall just expanded tremendously, and this became a very important source of employment for Black Americans.

[00:05:08]Justice Marshall, the great grandson of a slave, swore to do equal right to the poor and to the rich.

[00:05:15]I think the federal government did do something that many private sector companies did not do, and that is provide opportunity based upon merit.

[00:05:24]This movement provided a foundation for future generations.

[00:05:27]D.C., the black population grew to such an extent that it earned the nickname or moniker "Chocolate City." By having this nexus of black intellectuals and middle class workers that actually sows the seeds for more germination of ideas.

[00:05:42]Today, one in five black workers are employed by government agencies.

[00:05:46]Still, today, African-Americans, while the federal government provides perhaps more opportunity, is actually the largest employer of African-Americans in the country.

[00:05:55]At the same time, we still struggle with the promotion rates being slower than that of similarly situated and educated whites.

[00:06:02]Unfortunately, black families participation in the public sector leaves them exposed to economic shocks.

[00:06:08]In recent downturns, congress has limited funding for state and local government hiring.

[00:06:13]The instability can make it more difficult to save and pass inheritances onto the next generation.

[00:06:18]There's an income issue.

[00:06:19]We find that at every income level, Black Americans actually save more than other segments of the population.

[00:06:26]So the issue is that the income is too low.

[00:06:34]The pandemic has made labor inequality obvious.

[00:06:37]Black workers are overrepresented in frontline work, according to McKinsey.

[00:06:41]The question that the pandemic has raised is, given what we know about how essential these jobs are, are we providing adequate compensation, adequate scheduling predictability, adequate benefits?

[00:06:58]Mckinsey finds that racial income disparities are driven by just five sectors.

[00:07:02]The list includes finance, manufacturing and construction.

[00:07:05]We find that there's around $220 billion annual wage gap in terms of the income being paid to Black Americans if they were earning their fair share of the wages paid based on their population.

[00:07:18]Entrepreneurs like Andre McCain can shape what happens next.

[00:07:21]After seven years in finance and real estate, he brought a new restaurant brand to D.C.

[00:07:27]This was around the time when you really saw a takeoff in fast casual restaurants and also a huge restaurant renaissance.

[00:07:34]It seemed like a very large opportunity to take a product that is so versatile, like a sausage that we eat on a bun or on a pizza or for breakfast and create a restaurant that kind of pays homage to that, but in a very cool way.

[00:07:48]McCain says that one of the biggest challenges in launching was finding both investors and real estate.

[00:07:54]Investors want to know where is the restaurant going to be, which you can't tell them until you convince the landlord to give you the space.

[00:08:01]And investors want to know how much is the startup investment going to cost.

[00:08:05]But you can't also know that until you find the space and then you've also got to go find the investors who are interested in investing in you and investing in the restaurant.

[00:08:16]Those early years were very, very tough.

[00:08:21]The business community believes that more attention needs to go towards the basic health and well-being of Black Americans.

[00:08:26]Forty two percent of black workers hold jobs that are subject to disruption by 2030.

[00:08:31]Small businesses, which employ the vast majority of people in America, have to compete with large businesses, which have a lot more resources.

[00:08:40]And so when you think about benefits like health care and 401ks and the ability to subsidize those benefits is really tough for a small business to do that. And so because of that, you are at a massive competitive disadvantage. For us at Half-smoke, we now that we're in sort of growth mode, we're just now getting into being able to provide benefits.

[00:09:03]And that's like a game changer, not only in terms of just the right things to do, but also in terms of our ability to keep people and also to source the best talent.

[00:09:14]Businesses could also better serve the black consumer.

[00:09:17]For example, food deserts remain an issue in eastern D.C.

[00:09:21]And so as a result, you end up eating a lot of food from carryout and from corner stores.

[00:09:26]More than eight million Americans, Black Americans live in food deserts.

[00:09:31]You're twice as likely to live in a health care desert if you're a Black American, 20 percent more likely to live in a banking desert.

[00:09:37]And so this creates a big opportunity, and we tried to quantify what the dissatisfaction was was worth if someone could get it right, so to speak.

[00:09:49]And so the aggregate of those two analyzes was around $300 billion.

[00:09:53]That's just today.

[00:09:55]Cities like D.C.

[00:09:56]are focusing on this problem.

[00:09:58]We are the recipient of two awards from the D.C.

[00:10:03]government to sort of eradicate some of these food deserts, especially as it relates to full-service restaurants.

[00:10:10]It was a great feeling.

[00:10:12]I certainly wanted to do it for a very long time.

[00:10:15]It still isn't economically feasible without some sort of subsidy.

[00:10:20]And so the fact that the city recognizes that is a great thing.

[00:10:24]Then there's tax policy.

[00:10:26]It also has a massive impact on upward mobility.

[00:10:29]For example, most American public schools are funded with property taxes.

[00:10:34]That dynamic can worsen inequality.

[00:10:36]We, as a society have decided how we want to fund education.

[00:10:42]That choice results in the students who need the most support getting less support and at a philosophical level making a decision that we're going to prioritize the health of our citizens regardless of their income, I think will have huge implications for people.

[00:11:03]Certainly, people's lives would also the aggregate economy.

[00:11:05]Federal policies play a huge role to McKinsey finds that at least 30 percent of government spending amplifies existing racial disparities.

[00:11:13]These come in the form of write-offs on real estate, stock investing, and family trusts. Solutions could come in three forms.

[00:11:21]One would be housing vouchers for low-income families.

[00:11:24]Another could be an expansion in the child tax credit.

[00:11:27]Then there are local policies.

[00:11:29]And it's the choices that the local governments representing those populations and the people in power make.

[00:11:35]When we think about it from that perspective, instead of just moving a tiny fraction of families from a low opportunity area to high opportunity area, we can think about how to transform the places where people currently live.

[00:11:49]The most potent changes could come from programs like the Network for Teaching Entrepreneurship.

[00:11:53]Andre enrolled in this free program while commuting two hours a day to attend his high school. He still participates in the program as a mentor.

[00:12:02]You know, the good news is that many companies are very interested in work in supporting entrepreneurship education.

[00:12:11]So leading companies like Ernst and Young, Microsoft, SAP, Goldman Sachs, Moody's, they all contribute to NFTE.

[00:12:20]But they're also shrewd, and they understand that they need to start developing the workforce of the future.

[00:12:26]When people give back and the kids are able to see people from the business community and they're able to interact with them and really kind of demystifies what the world is like.

[00:12:36]The idea that just the supervisor at the local grocery store is African-American, just the idea that when you go into the bank and see the manager, oh, and the manager just happens to be African-American, right?

[00:12:46]All of these pieces come together to communicate the story that African-American is normal.

[00:12:54]Entrepreneurship is a vehicle to bring you to the greatest articulation of what your dreams could be.

[00:13:00]So I think that's really where it all starts is just improving the quality of the school system so everyone can continue to have these great opportunities.