The Harlem Renaissance brought together a dizzying array of writers, such as Langston Hughes and Zora Neale Hurston, and performers like Ella Fitzgerald and Billie Holiday. All of America benefited as black talents like Duke Ellington burst into the white world. For these famous figures and for millions of more obscure African Americans, urban density enabled upward mobility.
This history suggests that areas should be judged not by their poverty but by their track record in helping poorer people move up. If a city is attracting continuing waves of the less fortunate, helping them succeed, watching them leave, and then attracting new disadvantaged migrants, then it is succeeding at one of society’s most important functions. If an area has become the home of default for poor people who are staying poor, then that area is failing.
Rise and Fall of the American Ghetto
The African-American migration north is as great an epic as America has experienced. In the early twentieth century, African Americans were rare in Northern cities. Only 2 percent of New York’s population and 1.8 percent of Chicago’s population were African American in 1900. Decade after decade, these percentages grew as blacks chose urban opportunity. They came north to experience freedom and pursue prosperity, but when they arrived, they found color barriers that, while less obvious than those in the South, could still be terrible. Just like building a factory, enacting a law has fixed costs, so Northern racists didn’t bother to enact laws when there were only a handful of urban blacks, but as their numbers increased, so did discriminatory legislation, and Northern cities increasingly found ways to isolate their growing African-American populations.
George W. F. McMechen would seem to be the ultimate upwardly mobile African American at the start of the last century. He graduated from Morgan College and Yale Law School and came to Baltimore, where he formed a successful legal practice with another African American, W. Ashbie Hawkins. McMechen wanted to live in one of Baltimore’s more affluent neighborhoods, which were in those days overwhelmingly white. In 1910, Hawkins bought a house at 1834 McCulloh Street and leased it to McMechen.
This formerly all-white neighborhood rose up in arms. Local kids threw bricks through McMechen’s windows. A neighborhood improvement association was formed specifically to get rid of him. Whites tried to buy the property from McMechen’s partner, who demanded three times his purchase price. The white neighbors balked and decided to rewrite the law instead. One of McMechen’s neighbors was an attorney—“eminent” according to the New York Times, “briefless” according to Hawkins—who dug up a copy of Baltimore’s city charter and decided that it was well within the city’s rights to pass a race-based zoning ordinance. He drafted such a law and had no problem getting it passed by the city council and signed by the mayor, who implausibly announced that the law’s supporters were “the best friends that the colored people have.”
Similar measures were soon passed in Richmond, Atlanta, Louisville, and other Southern cities. Yet despite the fact that segregation had become law in so many areas of Southern life, there was still doubt about the legality of zoning by race. McMechen argued that it was “unconstitutional, unjust and discriminatory against the negro.” Hawkins took Baltimore to court and won, invalidating the segregationist laws in state court. Finally, in 1917, the National Association for the Advancement of Colored People (NAACP) achieved its first great triumph when the Supreme Court made zoning by race illegal, in what probably was the greatest courtroom victory for black America up to that time.
But the Supreme Court’s ruling barely held back the white desire to isolate blacks. In some cities, like Atlanta and Chicago, rioters terrorized blacks who ventured into white areas. Restrictive covenants in deeds prevented the sale of property to classes of people deemed undesirable. One 1947 study found that there were racially restrictive covenants in 72 percent of developments built in New York between the world wars.
These restrictions meant that African Americans not only lived in isolated neighborhoods but often also paid more for their housing. Almost forty years ago, a study by economists John Kain and John Quigley found that blacks paid more than whites for comparable housing in St. Louis. This finding squared well with earlier claims that African-American “residents of the black belt in Chicago pay as much per cubic foot per room as that paid by wealthy residents for equivalent space on the Lakeside drive.” Throughout the country, blacks paid more, relative to whites, in cities that were more segregated.
But cities also produced the legal champions who slowly brought down the ghetto walls. Two Baltimore attorneys, Thurgood Marshall and Philip Perlman, one black and one white, one representing the NAACP and the other representing the U.S. government, came together to fight restrictive covenants. Swayed by their arguments, in 1948 the Supreme Court ruled that racial covenants were not prohibited, but state power could not be used to enforce them, effectively ending their usefulness. There is a beautiful irony in this: An activist court promoted racial equality by telling the government not to act. Ten years later, in New York City, a powerful coalition of blacks, Jews, and other ethnicities pioneered the nation’s first fair-housing law that banned discrimination on the basis of religion or race in private dwellings. Other areas followed New York’s lead, and after another ten years, a week after the assassination of Martin Luther King Jr., Congress passed the Civil Rights Act of 1968, which barred discrimination in all American housing.
These legal triumphs made it possible for upwardly mobile African Americans to leave the ghetto and to move to previously all-white neighborhoods. Between 1970 and 2000, segregation declined almost everywhere in America, primarily because formerly lily-white areas acquired a few mostly well-off African Americans. Between 1970 and 1990, the segregation level of African-American college graduates declined by about 25 percent, while the segregation level of high school dropouts declined by less than 10 percent.
The nature of segregation also changed. Before the 1960s, it reflected hard barriers against black mobility, which limited African Americans’ housing choices and caused them to pay more for housing in more segregated cities. Today, segregation is more likely to reflect the workings of a free housing market, in which whites are often simply more willing than many blacks to pay a premium to live in mostly white neighborhoods. As a result, housing today is particularly cheap for African Americans in more segregated areas—the exact opposite of the situation half a century ago.
The end of laws enforcing segregation was a triumph for American society, but segregation persists, and tragically the triumph of integration seems to have made segregation increasingly harmful. Studies in the 1960s and 1970s found little difference in outcomes between African Americans who grew up in more segregated cities and those who lived in less segregated areas. That changed as more prosperous African Americans left the ghetto. By 1990, blacks between the ages of twenty and twenty-four who grew up in more segregated cities were 5.5 percent less likely than similarly aged African Americans in less segregated areas to have a high school degree and 6.2 percent more likely to be out of school and out of work. The African Americans in less segregated areas were earning 17 percent more. There were no significant differences among whites living in more and less segregated metropolitan areas. Young black women were 3.2 percent more likely to be single mothers in more segregated cities.
Thirty years ago, William Julius Wilson argued that when the most well-educated African Americans stayed in segregated communities, they provided role models and leadership for the entire community. When they left, those communities became rudderless. A mass of evidence has accrued since then to support his argument. Here we see the wisdom in sociologist Robert Merton’s law of unintended consequences, which so often attend even the most well-meaning public actions. Merton understood the complexity of society and the fact that public action may bring unexpected and undesired aftereffects. No one wants to return to a world where blacks who moved into a white suburb faced death threats, yet the exodus of skilled minorities has meant that gh
ettos are now worse places for the children of those left behind. The sad fact is that too many segregated cities have changed from being places of upward mobility to places of perpetual poverty.
The Inner City
The fight against the terrible segregation that remains in American cities is so difficult, in part, because there are economic forces that pull the rich and poor apart. There is a hidden logic behind the concentrated poverty that results from the tendency of the poor to live at the physical center of American cities. That tendency reflects, in part, the power of transportation to shape cities. All forms of travel involve two types of cost: money and time. The cash cost of commuting is the same for rich and poor, but rich people with higher wages give up more income when they spend more time commuting and less time working. As a result the rich are generally willing to pay more for faster trips to work. Why are the centers of Manhattan and Rio richer than more distant areas? Richer people can pay more for the privilege of having shorter commutes.
Yet in most American cities, there are also reversals where the poor live closer to the center than the rich. When a single transportation mode, like driving or taking the subway, dominates, then the rich live closer to the city center and the poor live farther away. But when there are multiple modes of transit, then the poor often live closer in order to gain access to public transit. The U.S. poverty line for a four-person household in 2009 is $22,050. In 2008, a typical nonurban household spent $9,000 on car-related transportation. How in the world could a two-adult family with $22,000 of income afford two cars?
New York, Boston, and Philadelphia have four transit and income zones: an inner zone (like central Manhattan or Beacon Hill) where the rich commute by foot or public transit, a second zone (the edges of New York’s outer boroughs, or Roxbury in Boston) where the poor commute by public transit, a third zone (Westchester County or Wellesley) where the rich drive, and an outer zone comprising distant areas where less wealthy people live and drive. Paris likewise has excellent public transportation and consequently has an inner zone where the rich use the Métro or walk. The next zone has the poor living in more distant areas that are still connected to the city by train.
Newer cities, like Los Angeles, are far less oriented toward public transit and as a result have no inner walking or public-transit zone used by the wealthy. The prosperous all drive, and there are just three zones: an inner area where the poor take public transit (South Central L.A.), a middle area where the rich drive (Beverly Hills), and an outer area where the less wealthy have horrendous commutes.
Transportation isn’t the only force pulling the poor to the center of American cities. Above all, prosperous parents suburbanize to get access to better schools. Central areas are often historic, and as a result they usually have older homes that have depreciated in quality and in price. Just as richer people buy new cars and then sell them to less wealthy people, typically new housing is built for more prosperous people and then as the housing depreciates, it comes to house the less fortunate. Just as an abundance of cheap used cars is a boon for poorer people, the abundance of cheap used housing in places like Detroit or St. Louis also benefits the poor.
The connection between poverty and inner-city transportation reminds us that some places are poor for a reason and that we shouldn’t expect them to quickly get rich. When an area offers amenities like mass transit or cheaper, older housing that poor people particularly value, then the place will likely remain poor.
How Policy Magnifies Poverty
For decades, public policies have tried to alleviate the costs of segregation, but many of these well-meaning interventions have done more to prove the weakness of Washington than to fix urban suffering. One line of attack offers businesses tax breaks for locating in disadvantaged areas, called Empowerment Zones in the United States and Enterprise Zones in England. As we saw in the last chapter, Empowerment Zones do bring jobs to poor areas, but they’re expensive; it takes about $100,000 in tax breaks to generate one job. Moreover, we still don’t know if this employment translates into long-term success for the children growing up in these areas.
An alternative view argues that such approaches are just “gilding the ghetto,” as my former colleague John Kain once wrote. In this view, only greater mobility, such as that created by housing vouchers, can relieve the suffering of segregation. In the 1990s, the Department of Housing and Urban Development tried a social experiment, called Moving to Opportunity, that randomly distributed vouchers among a pool of single-parent families eager for aid. One third of the subjects got nothing; they were the control group. One third got a standard-issue voucher that could pay for housing anywhere in the city. The remaining third got a voucher that could only be used in a low-poverty neighborhood. This restriction was an attempt to put poor people in wealthier neighborhoods and gauge the effects of place on those people. By comparing the control groups with the voucher recipients, it was possible to get an estimate of the impact of various neighborhoods on parents and kids.
The results were strikingly mixed. Parents whose vouchers enabled them to move to low-poverty neighborhoods were happier, healthier, and less likely to be crime victims, but they weren’t any better off financially. After all, the old ghettos were actually pretty close to jobs. The impact on children’s achievement was quite mixed as well. Girls did much better academically and seemed to be settling well into their new environments. The boys did poorly, and if anything had more behavioral problems if they moved to a low-poverty environment, which is another example of the unforeseen consequences that are so common in social policy. These mixed results for girls and boys mirror a broader pattern over the last three decades: African-American women have been much more successful than men.
Housing vouchers are good at what they were designed to do—using public dollars to put poorer people into better homes. They actually get resources to the people who need them, instead of lining contractors’ pockets and building white-elephant projects. But they are not the solution to cities’ larger social problems. The Moving to Opportunity study shows that we can’t solve the problems of urban poverty by just giving people money to move to richer neighborhoods.
Bad policy puts place-making above helping people, but sometimes social entrepreneurs can do great good by focusing on just one place. For almost forty years, the Harlem Children’s Zone has fought for the children of Manhattan’s best-known African-American community. They’ve created a dense web of social activities, such as the Baby College, which teaches parenting skills, aimed at improving academic outcomes and reducing crime. In one sense, they may be “gilding the ghetto,” but in another sense, they are giving Harlem’s children the skills they need to thrive and even leave Harlem if they want to.
In 2004, as New York began to allow more experimentation in its schools, the Harlem Children’s Zone opened its own charter school, the Promise Academy. The school’s curriculum is intense, requiring long hours from its students, and it offers financial incentives for success. The school’s leaders worked aggressively to lure the best teachers available, and the academy fired almost 50 percent of its teachers in its first year. Entrance into the school is determined by lottery, which led my colleague Roland Fryer to perform a true natural experiment comparing similar lottery winners and losers. He and his coauthor found that the school had strong, positive effects on its students: the Promise Academy eliminated the black-white achievement gap in mathematics. The teachers had particular success with boys, which is unusual and remarkable.
The Harlem Children’s Zone proves that investing in segregated areas can work, as long as that investment targets children, not stadiums or monorails. But does its success mean that President Obama was right in 2007 to promise that “when I’m President, the first part of my plan to combat urban poverty will be to replicate the Harlem Children’s Zone in twenty cities across the country”? Can the federal government successfully replicate the social entrepreneurship that sprang up in New York City? Can other cities attract
the same remarkable pool of leaders, teachers, and benefactors that came to the zone in New York, especially if they have to play by rules laid down in Washington? I hope so, but I fear that the success of the zone and the relative failure of most nationwide interventions suggest that the solution to urban problems is more likely to come from local initiative than from federal policy. When a city attracts enough skilled people, some of them will be willing to work on the city’s problems and find solutions for even the most seemingly intractable ones.
The case for federal action is strongest when that action is reducing the artificial separation of rich and poor created by the government itself. Whenever public services are radically different in two adjacent areas, those differences will influence where people choose to live. Some of that sorting is perfectly benign: One suburban school may have a better football team than its neighbor and attract more sports-oriented parents. Given the athletic incompetence that my children may inherit from me, I’m happy to have an option of less sports-oriented schools. But there is far more reason to worry when differences in school quality lead to the isolation of the poor.
East St. Louis provides an extreme example of the urban poverty paradox, whereby public policy that helps the poor in one area can lead to a massive concentration of poverty. East St. Louis lies across the Mississippi River, in Illinois, from St. Louis, Missouri. In 1989, the annual Aid to Families with Dependent Children payment was 20 percent higher in Illinois than in Missouri. If you were out of work, it made sense to move to Illinois, and so in 1990 the poverty rate in East St. Louis was 43 percent—higher than in St. Louis or Buffalo or Detroit or any other declining Rust Belt city. Since welfare reform in 1996, the gap in welfare payments has essentially disappeared, and the povertyrate gap between St. Louis and East St. Louis has narrowed considerably.
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