The income ladder

The big thing about Big Data is that it allows a far more complex and accurate representation of the world, and therefore to our understanding of that world. It’s your friend if it’s able to find a tiny and previously undetected cancer that is yet to spread or if it transmits the results of recent tests of a new therapy to your physician. It’s your friend if it allows the capture of greater visual complexity in photography, music, art or movies.

But it can be your enemy if it allows the government to spy on you or for a private enterprise to intrude on your privacy. A recent tech blog by writer Michelle Quinn in Silicon Valley’s Mercury News draws a distinction between the two. “Governments grab data, then put dissidents in jail,” she writes. “Google just gives me a different Ann Taylor ad.” I wish it were that simple. It isn’t.

I’d argue that Big Data can be your friend to the extent that it teaches you what you didn’t previously know. For instance, this study encourages a far more sophisticated understanding of intergenerational mobility in today’s America. The fact it’s so comprehensive means that it provides a granular view of its subject matter. Its subsets and the subsets of those subsets — such as regional analysis — are statistically reliable.

“Recent Trends in Intergenerational Mobility” does a lot of things to clean up basic data, often using statistical methods which I as a layman confess I do not understand. Many of them involve an exploration of the factors correlated with upward mobility. The study concludes that high-mobility areas have less residential segregation, less income inequality, better primary schools, greater social capital, and greater family stability. Greater civic engagement is also a sign of greater opportunity. Also, all other things being equal, “upward mobility tends to be higher in metropolitan areas where poor families were more dispersed among mixed-income neighborhoods.”

A lot of tasks are left to further researchers: “The new publicly available statistics on intergenerational mobility by area developed here can facilitate future research on such mechanisms.”

Stuck on the bottom

Geographical location is one of the ways in which the huge population studied in this paper on intergenerational mobility can be studied. The four mid-Hudson counties of Dutchess, Orange, Sullivan and Ulster known in the study as “Poughkeepsie” have a population of about 930,000, or about 29 hundredths of one per cent of the nation’s population; the study includes data on the social mobility of about 100,000 mid-Hudson children, give or take.

There are roughly 20,000 children in each mid-Hudson quintile. When the study concludes that nine per cent of the children whose parents are in the lowest quintile made it to the top quintile, we’re talking about 1800 children. And when it concludes that 33 per cent remained stuck like their parents in the lowest quintile, we mean 6600 children. In a similar vein, 2600 rose to the second highest quintile, 3800 got to the middle quintile, and 5200 to the second lowest.

Jamestown, North Dakota is a city of 16,000 halfway between the capital of Bismarck and the largest city in the state, Fargo. Its city council met this Monday afternoon at five o’clock in the city hall on Third Avenue Southeast. Mostly because of the state’s oil boom, Jamestown’s children benefit from colossally high intergenerational mobility. Twenty per cent of those Jamestowners whose parents were in the lowest fifth on the economic ladder are now in the top quintile, 24 per cent in the second, 22 in the middle, 18 in the second lowest, and only 16 per cent at the bottom. In Jamestown’s case, a rising tide did lift all boats.

Jamestown is an exceptional place.

With 12.9 per cent of its children with parents in the bottom quintile making it to the top one, San Jose, the hub of Silicon Valley, is the highest-ranking U.S. metropolitan area by that standard. Pittsburgh, Seattle and Salt Lake City rank nearly as high as San Jose. New York City, Boston, San Francisco and Washington D.C. aren’t far from the top. Most of upstate New York, including Poughkeepsie, isn’t far behind.

By contrast, intergenerational mobility in the Southeast and the most economically depressed Midwest cities are less than half of what they are in the most mobile areas. The ten least mobile of the 50 largest cities are — with the worst first — Memphis, Fayetteville, Charlotte, Columbia S.C., Atlanta, Greensboro, Greenville, Indianapolis and Detroit. These scores, the authors observe, are substantially lower than those in any other advanced country.

International comparisons show some American cities enjoy intergenerational mobility close to averages in Denmark and Norway, probably the most economically mobile societies in the world. Other nations with greater mobility include Canada, Australia, France, Germany and Japan.

The bottom line of this elegant new working paper is not encouraging to those who believe in equal opportunity. Children entering the American labor market today have no better chances of moving up in the income distribution relative to their parents as children born in the 1970s. However, the authors of this comprehensive study also note, “because inequality has risen, the consequences of the ‘birth lottery’ — the parents to whom a child is born — are larger today than in the past.”++

This weekly column reports on economic trends in the mid-Hudson region. To read past columns go to Ulster Publishing’s hudsonvalleybusinessreview.com.