Monday, January 16, 2017

The Real Martin Luther King Day Division in America: Wealth, not Race

"Since 2008, real wages have remained the same or fallen for the bottom four-fifths."

Peter Wehner, New York Times

"the labor-force participation rate for working-age natives without a bachelor’s degree is .   .   . lower than it was before the recession, just 70.4% now, compared with 74% before the downturn. [Republicans] should accept the new terms Trump has set out for its economic worldview, and focus on workers and their wages more than it has any time in memory."

Rich Lowry, New York Post

It’s Martin Luther King Day.  By the time of his untimely assassination at 39 in 1968, Martin Luther King understood the real battle for American blacks was ending poverty for all, North and South, white and black, a battle that continues today.

To be clear, King favored progressive government action — wealth transfer from rich to poor — to end poverty.  In 1968, no one knew how well the Great Society’s “end poverty” efforts would work out.

Now we know.  The Census Bureau’s official poverty rate fell only modestly from 19% in 1964 to 15% in 2012, the most recent year available.  Blacks, however, have made more dramatic progress, with African-American poverty down from 42% in 1964 to 27% in 2012 — though the black poverty rate is still more than double that of whites (13%).  As for whites, their poverty rate rose in the same period (by 1.4%).

The Initiative for a Competitive Inner City has found that though inner cities make up only 1% of land area versus the suburbs which comprise 17% of total U.S. land area, inner city absolute poverty (8 million) nearly matches that of the suburbs (11 million).  The concentrated poverty rate for blacks in cities — 36% — is far higher than it is in the suburbs (11%).

Pete Saunders, in Forbes, studied black migration in and out of the top 20 metro areas during 2010-14.  Saunders reports that 19 of the top 20 metro areas have suburbs where either the black population increased while the white population declined, or where the suburban growth rate of blacks exceeded that of whites. While black growth within the 20 cities was flat, it was up 7% in the suburbs.

Setting aside the special problem of inner city poverty, it now seems that any black-white or urban-suburban divide may be less significant than a newly discovered separation: that between high-output and low-output America.  A Brookings Institution study documents the division by looking at the last election.  It turns out that the less-than-500 counties that Hillary Clinton carried accounted in 2015 for 64% of America’s economic activity, while the 2,600+ counties Trump won generated 36% —just over one-third — of national output (see graph below, click to enlarge, ignore placement of Chicago's Cook County into New York state).

And the division has grown more pronounced since 2000 (chart below):

It’s not the color of your skin so much as where you live that determines your prospects.

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