I want to begin by saying how grateful we were at Brookings to partner with the Federal Reserve System on this concentrated poverty project. We like to think that at Brookings we know a lot about this subject, but it was only through this partnership with the Fed that we were able to ground this understanding in the experiences of the 16 communities across the United States that were the focus of the report’s case studies.

The report demonstrates that in addition to managing the macroeconomy, the Fed also possesses a unique and powerful understanding of the U.S. economy from the ground up, which is absolutely necessary for designing smart policy in turbulent times like these.

I want to also give special thanks to my colleagues David Erickson and Carolina Reid at the San Francisco Fed. They played several roles in this project for me: intellectual partners, co-conspirators, mood lighteners, and Fed sherpas. It can be tough for foreigners like myself to navigate this system, and they lightened my load throughout the project. I also want to thank my Brookings colleague Elizabeth Kneebone, who performed a lot of the data analysis for this project.

I want to argue three points, largely policy points, in my remarks this morning.

First, the current economic climate makes the issue of concentrated poverty, and our response, more relevant, not less.

Second, major near-term investments our country makes to resolve the economic crisis can and should provide meaningful opportunities for the most disadvantaged families and communities.

And third, our longer-run efforts to assist high-poverty areas and their residents must take account of the economic challenges and opportunities that manifest at the regional, metropolitan level.

To begin, let’s review where we were when the Fed and Brookings joined forces on this effort in May 2006.

• The unemployment rate was 4.7 percent, a five-year low.
• Payrolls were expanding every month for the third consecutive year.
• The poverty rate, while still above its low in 2000, was dropping.
• The federal deficit was a relatively manageable 2% of GDP.
• The Dow was above 11,000, and on its way up.
• And the 2008 general election promised a storied matchup between party favorites Hillary Clinton and Rudy Giuliani.

A lot can happen in 30 months!

In the wake of record house-price declines and financial market fallout, the economic outlook today is grim. The unemployment rate is 6.5 percent and rising. One projection suggests that the downturn could eventually increase the ranks of the nation’s poor by anywhere from 7 to 10 million. And amid declining revenues and increased expenditure needs, the U.S. budget deficit is expected to top $1 trillion this year.

In short, the situation for the lowest-income communities and their residents is not encouraging.

And neither is our starting point.

As Paul Jargowsky’s research has shown, the incidence of concentrated poverty in America dropped markedly during the 1990s, after two decades of increase. Some combination of a tight labor market and policy changes to promote work and break up the deepest concentrations of poverty seemed responsible for that decline.

But as Elizabeth and I found in a recent Brookings report, we may have given back much of that progress during the first half of this decade. The population in what we termed “high working poverty” communities rose by 40 percent between 1999 and 2005. This suggests that America’s high-poverty areas may have never really recovered from the modest downturn we experienced at the beginning of the decade.

Now, with all the turmoil in our economy, it would be easy to lose sight of these places and their residents, who even seem to have missed out on the benefits of recent growth.

But if we are to meet the enormous challenges facing our country—economic, social, and environmental—we simply can’t afford to take a blind eye to the continuing problem of concentrated poverty.

As decades of research and this report have shown, concentrated poverty magnifies the problems faced by the poor, and exacts a significant toll on the lives of families in its midst.

This report greatly enhances our understanding of how high-poverty communities of all stripes bear these costs. Moreover, it suggests that the contemporary circumstances of these communities owe not just to long-term market dynamics, but also to policy choices made over several decades’ time—some deliberate in their intent, and some producing unfortunate unintended consequences.

Today we’re at an important inflection point for policy. With the economy souring, we don’t have the luxury of using an “auto-pilot” strategy of macroeconomic growth to reach the most disadvantaged places and their residents. Quite the opposite—just as these communities are often “last in” for economic opportunity during boom times, they seem to be “first out” when things shift into reverse.

But the specific nature of the current crisis also poses added challenges for high-poverty communities.

That is because many of these areas were ground zero for risky subprime lending over the last several years. In many of the case-study communities in the report, half or more of recent home mortgages were high-cost subprime loans.

Now, they are on the front lines of the fallout. Our calculations of HUD data show that census tracts where the poverty rate was at least 40 percent in 2000—the conventional definition behind concentrated poverty—have an estimated foreclosure rate over 9 percent, roughly double the nationwide average.

This poses both an immediate and a long-term threat to what little stability these communities possess.

Over the short term, these areas face problems associated with heightened property neglect, vacancy, and abandonment. Not only can those conditions breed crime and disorder, but also they can accelerate a process of further disinvestment from high-poverty neighborhoods, which are all too familiar with that cycle of decline.

Over the long run, the public sector will work to return foreclosed properties in these neighborhoods to productive use. But there is a danger that we may once again re-concentrate poverty in these neighborhoods if these assets are not managed and deployed strategically.

In sum, recent trends and a perilous road ahead merit a meaningful policy response to the challenges facing areas of concentrated poverty and their residents.

This brings me to my second point, which is that near-term policy choices can ameliorate the impacts of the current crisis on areas of concentrated poverty.

In less than 50 days, a new administration will take office in Washington, facing economic challenges of a scale not seen in decades.

The president-elect and his advisors have signaled that they are ready to “do what it takes” to stimulate the economy, create and protect jobs, and catalyze investment in new sectors to spur longer-term growth.

I believe that policies advanced by the new administration and Congress in the first few weeks of the new year, if designed and executed well, could matter greatly for the fortunes of the nation’s high-poverty communities.

First, a comprehensive strategy to deal with the foreclosure crisis is sorely needed. This would feature, first and foremost, a broad plan to forestall the rising tide of mortgages, including many in high-poverty communities, headed for default due to falling home prices, economic dislocation, and poor underwriting.

However, even a sweeping, generous approach will not prevent the inevitable. Especially in high-poverty areas, more loans will fall into foreclosure, more people will lose their homes, and fiscally-strapped local governments will be left to manage the consequences of increasing vacancy and abandonment.

The Neighborhood Stabilization Program enacted by Congress and the Bush administration during the summer of 2008 represents an initial effort to arm state and local leaders with the resources to tackle the neighborhood impacts of rising foreclosures.

But significant deterioration of the economy in the intervening months suggests that the problem may now be of a much larger scale than was originally anticipated. What’s more, many local governments lack the capacity, expertise, and legal authorities to use existing or additional resources strategically.

So the new administration, and HUD in particular, will need to consider a further round of response—using some mix of fiscal, regulatory, capacity-building, and bully pulpit powers—to help cash-strapped local governments mitigate the impacts of foreclosure on their most vulnerable communities.

Second, there seems to be wide agreement that the economic recovery package should include a series of measures that inject money into the economy right away.

So the package will provide immediate assistance to families, communities, and governments hit hard by the downturn, in the likely form of extended unemployment and increased food stamp benefits, increased state and local aid, and low- to middle-income tax cuts, spending designed to make a real economic impact in the next several months.

A couple of details here are of real consequence to communities of concentrated poverty.

• Income tax cuts included in the package should be refundable, like the Earned Income Tax Credit, or EITC. Boosting the EITC, for instance, would provide additional help to workers most likely to be hit hard by the downturn, and target resources to families most likely to spend the additional cash immediately. As the report shows, at least 30 percent, and as many as 60 percent, of families in the case-study communities today benefit from the EITC.
• Unemployment insurance benefits should be extended, but also modernized. As the case studies showed, work among residents of high-poverty communities is often seasonal or part-time, even in a good economy. As a result, many laid-off workers from poor areas in several states may not qualify for benefits due to outmoded eligibility rules. Therefore, in addition to extending weeks of eligibility for UI, Congress and the new administration might also consider providing incentives to states to expand the pool of workers who could benefit from the program during the downturn.

Third, infrastructure will clearly figure prominently among the spending priorities in the recovery package.

Yet there is a significant risk that focusing dollars primarily on projects that states deem “shovel-ready,” as has been discussed, will repeat mistakes of the past. It would primarily subsidize road-building at the metropolitan fringe, and do little to enhance long-run economic growth, or provide better opportunities for low-income people and the places they live.

Infrastructure investments of the magnitude under consideration must not only create jobs, but also promote inclusive and sustainable growth. That means setting strict criteria for federal investment, including a real assessment of costs and benefits that considers economic, environmental, and social impacts. As the report shows, poor infrastructure often acts as a barrier to the economic integration of high-poverty communities into their larger municipal and regional areas.

To that end, we should also consider providing direct support for large, cash-strapped municipal governments that they could use to modernize and preserve roads, bridges, transit, water, sewer, and perhaps even broadband infrastructure. At the same time, we should hold them and grantees at all other levels of government accountable for connecting younger, disadvantaged workers and communities to the jobs that result.

In short, what happens in the first several weeks of the new year here in Washington could, if structured properly, provide meaningful support and opportunity for low-income areas and their residents. At a minimum, this might avert the sort of backsliding these communities suffered during the much milder recession we experienced earlier this decade.

So that brings me to my third and final point, which is that, over the longer term, we must advance policies that actively link the fortunes of poor communities to those of their regional neighbors. As you probably heard or read, our division at Brookings is named the “Metropolitan Policy Program.”

Our mission is to provide decision makers with cutting-edge research and policy ideas for improving the health and prosperity of cities and metropolitan areas.

You might ask, why metropolitan? After all, this is not a term that most Americans use, think about, or even recognize, even though 85 percent of us live in metropolitan areas. A friend of the program once told us that it sounded like a combination of “metrosexual” and “cosmopolitan.” Not exactly what we were going for.

More specifically, what relevance does “metropolitan” have for addressing the challenges of concentrated poverty?

Well, the report points to skills and employability problems that hold back residents of high-poverty communities. If the route to improving the lives of families affected by concentrated poverty runs in part through the labor market, then we must devise strategies and solutions that respect and respond to the geography of that market—which is metropolitan.

The report also points to housing problems, of various stripes, that segregate the poor in these communities and make their daily lives more difficult. Housing markets, too, are metropolitan—and housing dynamics in the wealthiest parts of each metro are inextricably linked to those in the poorest parts.

The fact is, our national economy—and that of most industrialized nations—is largely the aggregate of its individual metropolitan economies. In the United States, the 100 largest metro areas account for 12 percent of our land mass, hold 65 percent of our residents, and generate three-quarters of our Gross Domestic Product. They possess even greater shares of our innovative businesses, our most knowledgeable workers, the critical infrastructure that connects us to the global economy, and the quality places that attract, retain, and enhance the productivity of workers and firms.

And as the report shows, regions—both metropolitan and non-metropolitan—each retain distinctive clusters that shape their individual contributions to the national economic pie. Photonics in Rochester. Hospitality and tourism in Atlantic City and Miami. Manufacturing in Albany, Georgia. Agriculture and business services in Central California. These clusters do not possess equal strength or equal potential, but they define the starting point for thinking about the regional economic future of these areas, and economic opportunities for their residents.

Not only are the assets of our economy fundamentally metropolitan… increasingly, our challenges are, too. In 2006, we found that for the first time, more than half of the poor in metropolitan America lived in suburbs, not cities. While poor suburban families don’t yet concentrate at the levels seen in the communities in this report, they are trending in this direction. Between 1999 and 2005, the number of suburban tax filers living in “moderate” working poverty communities rose by nearly 50 percent.

So what does recognition of our metropolitan reality imply for longer-run policies to help the poorest communities and their residents?

Bruce has argued elsewhere that our nation must embrace a new, unified framework for addressing the needs of poor neighborhoods and their residents. He has termed this, Creating Neighborhoods of Choice and Connection. Neighborhoods of choice are communities in which lower-income people can both find a place to start, and as their incomes rise, a place to stay. They are also communities to which people of higher incomes can move, for their distinctiveness, amenities, or location. This requires an acceptance of economic integration as a goal of housing and neighborhood policy.

Neighborhoods of connection are communities that link families to opportunity, wherever in the metropolis that opportunity might be located. This requires a much more profound commitment to the “educational offer” in these communities and the larger areas of which they are a part. It also requires a pragmatic vision of the “geography of opportunity” with regard to jobs, housing, and other choices.

If we take this vision seriously, then our interventions must operate within, and relate to, the metro geography of our economy. This means viewing the conditions and prospects of poor areas through the lens of the broader economic regions of which they are a part, and explicitly gearing policy in that direction.

A simple example relates to the geography of work. In the Springfield, Massachusetts metro area, roughly 30 percent of the region’s jobs still cluster in the neighborhoods close to downtown, including Old Hill and Six Corners. In the Miami metro area, by contrast, only 9 percent of the region’s jobs lie close to its downtown, implying transportation needs of a quite different scale for Little Haiti’s residents. In response, we should empower metropolitan transportation planners to address the unique nature of these spatial divides, and measure their performance on creating inclusive systems that overcome them.

This metro lens applies to workforce development as well. Labor market intermediaries are some of the most promising mechanisms for bridging the information and skills divide between poor communities and regional economic opportunity. One of the highest performers, the Wisconsin Regional Training Partnership, works in the home region of one of our case-study communities, Milwaukee. If workforce policies and funding at all levels of government were to emphasize employer partnerships, provide greater flexibility, and reward performance, we could grow more capable institutions like these that serve the needs of low-income communities and regional firms alike.

A metro perspective can apply to school reform as well. We have called for a new focus at the Department of Education on supporting proven, successful educational entrepreneurs—charter management organizations like KIPP, human capital providers like Teach for America, student support organizations like College Summit. The demand for these entrepreneurial solutions extends well beyond the highest-poverty neighborhoods. Federal education policy should consider investing in these entrepreneurs at the metropolitan scale, to aggregate a critical mass of those organizations, serve a significant percentage of the area’s children, and drive positive changes in the entire public education environment.

Finally, our housing policies must embrace metro-wide economic diversity, which is a hallmark of neighborhoods of choice and connection.

This means expanding housing opportunities for middle-income families in deprived neighborhoods. We simply cannot continue to cluster low-income housing in already low-income areas, perpetuating the sort of economic segregation evident in so many of the case-study communities, and thereby consign another generation to a childhood amid concentrated poverty. Likewise, we must guard against the possibility that the current foreclosure crisis leads to a re-concentration of poor households in neighborhoods that were just beginning to achieve greater economic diversity.

But this is a two-way street. It also means creating more high-quality housing opportunities for low-income families in growing suburban job centers. Requiring or providing incentives to metropolitan areas to engage in regional housing planning, alongside regional transportation planning, may be a necessary first step. Those plans could also apply a more rational screen to the development choices that have fueled sprawl, and thereby added to the social and economic isolation of the lowest-income communities.

Let me end where I began.

This is both an auspicious and a challenging moment at which to wrestle with the problem of concentrated poverty in America.

Auspicious in that we are approaching the dawn of a new government in Washington that has signaled concern for our nation’s low-income residents and communities, recognition that metropolitan economies are the engines of our prosperity, and a pragmatic commitment to doing what works.

Challenging in that making progress against concentrated poverty, and improving opportunity for those in its midst, is a tall order when the macroeconomy isn’t cooperating.

But the current economic climate is not an excuse to avoid this problem; rather, it’s an imperative to act, strategically and purposefully.

That means doing the big near-term things the right way, so that low-income communities and their residents do not bear an excessive brunt of the downturn, and so that they participate meaningfully in our eventual economic recovery.

And it means getting the long-term vision right, so that policy advances sustainable, metro-led solutions that connect poor neighborhoods and poor families to opportunity in the wider economy around them.

The Federal Reserve System has tremendous, well-earned credibility for understanding and advancing dialogue around the future of our nation’s economic regions. I look forward to continuing to work with the Fed to increase public understanding of concentrated poverty, and to make tackling it a crucial element of strategies to promote regional and national prosperity.

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INTRODUCTION

Economic inequality has been on the rise in America for more than three decades. The nation’s traditional engine for promoting equality and opportunity—its public education system—has been unable to halt that upward trend despite increased public spending at the preschool, K–12, and postsecondary levels. Meanwhile, accumulating research evidence reveals that postsecondary education has, for the past few decades, proved an increasingly powerful tool in boosting the income and economic mobility of disadvantaged students. Here we outline steps that high schools can take to increase the college readiness of poor and minority students, making it more likely that they will be accepted into and graduate from college.

The annual income difference between Americans with a college degree and those with a high school degree was more than $33,000 in 2007, up from $12,500 in 1965. More to the point, long-term intergenerational data from the Panel Study of Income Dynamics show that a college degree helps disadvantaged children move up the income distribution past peers in their own generation. Adult children with parents in the bottom fifth of income, for example, nearly quadruple (from 5 percent to 19 percent) their chance of moving all the way to the top fifth by earning a college degree.

But too few poor kids get a college degree. About one-third of all youngsters from the bottom fifth of family income enter college and only 11 percent get a degree. By contrast, 80 percent of those from the top fifth enter college and well over half earn a degree.

Perhaps the primary reason that poor and minority students do not enter and graduate from college is that they are poorly prepared to do well there. The problem is especially evident in the huge gap between the academic achievement of white, Asian, and middle- and upper-income students as compared with black, Hispanic, and low-income students. And decades of educational reform aimed at reducing this gap have had, at best, modest success. Striking evidence of how few college freshmen meet even the most basic college preparation standards is provided by Jay Greene and Greg Forster of the Manhattan Institute. Defining minimum college readiness as receiving a high school diploma, taking courses required by colleges for basic academic preparedness, and demonstrating basic literacy skills, Greene and Forster report that only around 40 percent of white and Asian students were college ready by these criteria. But that figure was twice the 20 percent rate for black students and more than twice the 16 percent rate for Hispanic students.

The latest issue of The Future of Children, devoted to exploring how to improve America’s high schools, contains several articles that touch on student preparation for postsecondary education and the world of work. An especially compelling article, written by Melissa Roderick, Jenny Nagaoka, and Vanessa Coca, of the Consortium on Chicago School Research at the University of Chicago, contains a careful analysis of how to measure whether students are ready for college and a host of proposals for actions high schools can take to increase their students’ readiness for postsecondary education. As the Roderick article and related research and analysis make clear, recent years have seen an upsurge of support for the goal of helping all students, but especially poor, urban, and minority students, prepare for college, enter college, and earn a terminal degree. Attaining that goal, we believe, would boost economic mobility in the United States and help the nation live up to its ideals of equality of educational and economic opportunity.

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Since December 2007, working families and communities across the country have faced an increasingly difficult economic reality. Growing unemployment and cutbacks in work hours and wages have made it harder and harder for people to make ends meet.

So the census numbers released in September really just confirmed what many Americans have already been feeling during this “Great Recession.” U.S. poverty is once again on the rise. In the first year of the downturn alone, the poor population grew by 2.6 million people to reach a total of 39.8 million, or 13.2 percent of the population.

But that’s not the whole story. The national lens obscures an important fact: place matters. Yes, 2008 brought a significant uptick in poverty, but whether or not your community was a part of this trend has a lot to do with where you live and what kind of jobs are located there.

Certain regions of the country have disproportionately borne the brunt of this recession. Areas hit hardest by the collapse of the housing market and those metro areas that depend on auto manufacturing have experienced the deepest downturns, while regions concentrated in more recession-proof industries – like educational and medical institutions or government – have fared better.

The 2008 poverty numbers reflect this varied experience. Out of the 100 largest metros areas, a little more than one in five saw a significant change in its poverty rate between 2007 and 2008, most of them increases (see map). Not surprisingly, many of these metro areas are located in California and Florida. The early timing of the burst of the housing bubble put these Sun Belt metro areas on the leading edge of what is sure to be a more widespread upward trend in poverty, reflecting a recession that deepened and spread in 2009. In contrast, metro areas like El Paso and Houston actually experienced a decline in poverty rates from 2007 to 2008, reflecting the later onset and milder effects of the downturn in much of Texas.

Although they represent regional economies, metro areas are themselves collections of cities and suburbs that do not necessarily experience poverty or respond to economic shocks uniformly.

Cities remain poorer places overall. In 2008, city residents in the 100 largest metro areas were almost twice as likely as their suburban counterparts to live in poverty—18.3 percent versus 9.5 percent. However, over the first year of the downturn, suburbs actually added more than twice as many poor people (578,000) as cities (218,000). Sun Belt suburbs – like those in the Florida metros of Lakeland, Palm Bay, Tampa, and Miami – led the list for increased poverty. These numbers reflect the fact that the suburbs are home to more people than their primary cities, but they also reflect the growing economic diversity of America’s suburbs.

In fact, an important shift has taken place in the geography of metropolitan poverty over the course of this decade. Between 2000 and 2008, the suburban poor population grew almost five times as fast as the city poor population, so that suburbs are now home to almost 1.9 million more poor people than their primary cities.

Brookings’ recent study on the “Landscape of Recession” within the country’s largest metro areas suggests that the current downturn will further accelerate the suburbanization of poverty.

More so than in the last recession, suburbs are bearing the brunt of this downturn alongside cities. City and suburban unemployment rates increased by nearly equal degrees and in May 2009 were separated by less than a percentage point—9.6 and 8.7 percent, respectively. And rather than concentrating in the older suburbs that surround cities, problems have spread to lower-density “exurbs” and “emerging suburbs” at the metropolitan fringe. These types of suburban communities showed the greatest spikes in their unemployed populations, with an increase of roughly 77 percent.

Clearly, city and suburban residents alike are experiencing increased economic stress, and the coming months and years will test the adequacy and availability of local safety net and emergency services. Here again, place makes a difference.

Case in point: as poverty increased in 2008, more families turned to food stamps (now called the Supplemental Nutrition Assistance Program, or SNAP) to help make ends meet. Just as the poor population grew faster in the suburbs, so did SNAP receipt. And yet participation in the program remains much higher in urban counties (8.9 million recipients) than suburban counties (5.3 million recipients). This disparity raises questions about whether families in suburban communities know how to connect to safety net services like food stamps, and how accessible these services are in these communities.

Understanding the shifting local geography of poverty is a critical first step in effectively addressing its alleviation. In our largest metropolitan areas, safety net services and social service providers traditionally have been concentrated in central city neighborhoods. As the geography of metropolitan poverty continues to change, policymakers and service providers must ask whether or not the growing suburban poor population has access to the same kinds of services and programs that can help families weather downturns in the economic cycle or connect to opportunities to work their way out of poverty.

The Great Recession is only likely to exacerbate gaps between available services and growing need, as government programs and nonprofit providers struggle to do more with less. Knowing where the need is, and where it is growing fastest, can help regions more effectively align existing social services and programs to respond to the new map of metropolitan poverty.

Editor's Note: This article originally appeared in the online forum Spotlight on Poverty and Opportunity on October 19, 2009.

      

Two years after the country entered the Great Recession, there are signs the national economy has slowly begun to recover. Thus far recovery has meant the return of economic growth, but not the return of jobs. And just as some communities have felt the downturn more than others, recovery has not and will not be shared equally across the nation’s diverse metropolitan economies.

Within metropolitan areas, many communities continue to struggle with high unemployment and increasing economic and fiscal challenges, while at the same time poverty and the need for emergency and support services continue to rise. Even under the best case scenario of a sustained and robust recovery, cities and suburbs throughout the nation will be dealing with the social and economic aftermath of such a deep and lengthy recession for some time to come.

An analysis of unemployment, initial Unemployment Insurance claims, and receipt of Supplementary Nutritional Assistance Program (SNAP, formerly known as food stamps) benefits in urban and suburban communities over the course of the Great Recession reveals that:

• Between December 2007 and December 2009, city and suburban unemployment rates in large metro areas increased by roughly the same degree (5.1 versus 4.8 percentage points, respectively). By December 2009, the gap between city and suburban unemployment rates was one percentage point (10.3 percent versus 9.3 percent)—smaller than 24 months after the start of the first recession of the decade (1.7 percentage points) and the downturn in the early 1990s (2.2 percentage points).
  
  
• Western metro areas exhibited the greatest increases in city and suburban unemployment rates—5.8 and 5.6 percentage points—over the two-year period ending in December of 2009. Increases in unemployment rates tilted more toward primary cities in Northeastern metro areas (a 5.3 percentage-point increase versus 4.2 percentage points in the suburbs), while suburbs saw slightly larger increases in the South (5.0 versus 4.4 percentage points).
  
  
• Initial Unemployment Insurance (UI) claims increased considerably between December 2007 and December 2009 in urban and suburban areas alike. The largest increases in requests for UI occurred in the first year of the downturn—led by lower-density suburbs—with new claims beginning to taper off between December of 2008 and 2009.
  
  
• SNAP receipt increased steeply and steadily between January 2008 and July 2009 across both urban and suburban counties. Urban counties remain home to the largest number of SNAP recipients, though suburban counties saw enrollment increase at a slightly faster pace during the downturn—36.1 percent compared to 29.4 percent in urban counties.
  

Even as signs point to a tentative economic recovery for the nation, metropolitan areas throughout the country continue to struggle with high unemployment. Within these regions, the negative effects of this downturn—as measured by changes in unemployment and demand for safety net services—have been shared across cities and suburbs alike. Standardizing sub-state data collection and reporting across programs would better enable policymakers and services providers to effectively track indicators of recovery and need in the nation’s largest labor markets.

Read the Full Paper » (PDF)
Read the Related Report: Job Sprawl and the Suburbanization of Poverty »

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• Appendix B
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Gentrification – the migration of wealthier people into poorer neighborhoods – is a contentious issue in most American cities. Many fear that even if gentrification helps a city in broad terms, for instance by improving the tax base, it will be bad news for low-income residents who are hit by rising rents or even displacement. But this received wisdom is only partially true.

The Problem of Concentrated Poverty

A recent study published by City Observatory, an urban policy think-tank, and written by economist and former Brookings scholar Joseph Cortright with Dillon Mahmoudi , challenges this prevailing pessimism.  Examining population and income changes between 1970 and 2010 in the largest cities, they find that the poverty concentration, rather than gentrification, is the real problem for the urban poor.  

Cortright and Mahmoudi examine more than 16,000 census tracts[1] – small, relatively stable, statistical subdivisions (smaller than the zip code), of a city – within ten miles of the central business districts of the 51 largest cities. Their key findings are:

1. High-poverty neighborhoods tripled between 1970 and 2010: The number of census tracts considered “high-poverty” rose from around 1,100 in 1970 to 3,100 in 2010. Surprisingly, of these newly-impoverished areas, more than half were healthy neighborhoods in 1970, before descending into “high-poverty” status by 2010. Our Brookings colleague Elizabeth Kneebone has documented similar patterns in the concentration of poverty around large cities.
2. Poverty is persistent: Two-thirds of the census tracts defined as “high-poverty” in 1970 (with greater than 30% of residents living below the poverty line), were still “high-poverty” areas in 2010. And another one-quarter of neighborhoods escaped “high-poverty” but remained poorer than the national average (about 15% of population below FPL )
3. Few high-poverty neighborhoods escape poverty: Only about 9 percent of the census tracts that were “high-poverty” in 1970 rebounded to levels of poverty below the national average in 2010.

The Damage of Concentrated Poverty

Being poor is obviously bad, but being poor in a really poor neighborhood is even worse. The work of urban sociologists like Harvard’s Robert J. Sampson and New York University’s Patrick Sharkey  highlights how persistent, concentrated neighborhood disadvantage has damaging effects on children that continue throughout a lifetime, often stifling upward mobility across generations.  When a community experiences uniform and deep poverty, with most streets characterized by dilapidated housing, failing schools, teenage pregnancy and heavy unemployment, it appears to create a culture of despair that can permanently blight a young person’s future.

Gentrification: Potentially Benign Disruption

So what has been the impact of gentrification in the few places where it has occurred? There is some evidence, crisply summarized in a recent article by John Buntin in Slate, that it might not be all bad news in terms of poverty. A degree of gentrification can begin to break up the homogenous poverty of neighborhoods in ways that can be good for all residents. New wealthier residents may demand improvements in schools and crime control. Retail offerings and services may improve for all residents – and bring new jobs, too. Gentrifiers can change neighborhoods in ways that begin to counteract the effects of uniform, persistent poverty.  On the other hand, gentrification can hurt low-income households by disrupting the social fabric of neighborhoods and potentially “pricing out” families. It depends on how it’s done. We’ll turn to that tomorrow. 

       

Poverty is heavily concentrated in a growing number of urban neighborhoods, which as we argued yesterday, is bad news for social mobility. By breaking up semi-permanent poverty patterns, a degree of gentrification can bring in new resources, energy and opportunities.

Gentrification and poverty: A contested relationship

As we noted yesterday, work by Cortright and Mahmoudi suggests that almost 10% of high-poverty neighborhoods escaped the poverty trap between 1970 and 2010—especially in Chicago, New York, and Washington D.C. Is this good or bad news for the residents of these formerly very poor neighborhoods?

Researchers disagree: the standard fear, supported by a considerable body of qualitative research, is that low-income families will be priced out and displaced out of improving neighborhoods. But there is growing evidence in the economics literature that casts doubt on prevailing views about the risks of displacement. These neighborhoods may become mixed neighborhoods rather than switching from homogenously poor to homogenously wealthy. This could be good news for the poor households who are now living in non-poor areas.

Gentrification: It depends how you do it

Whether gentrification benefits the poor depends in part on the nature of the process. Gentrification is not all the same. Gentrification can mean “walled-up” and gated communities for the wealthy and it can sometimes create damaging disruptions in the tenuous social fabric of neighborhoods, such that there are few beneficial spillover effects of from gentrification.

So while many neighborhoods previously mired in poverty may experience positive impacts from gentrification, others may be directly hurt by it. According to an extensive literature review by the Urban Institute, the impact of living in mixed-income communities for low-income families varies quite widely. Low-income families tend to benefit from improvements in neighborhood services, but the effects on their education and economic outcomes are unclear.   

Some cities, such as Washington DC, have started using their regulatory powers to require developers to preserve or expand modest-income housing alongside higher-priced housing. It is too early to assess the impact of these programs so, but such “smart” gentrification policies may be a good strategy to turn around chronically poor neighborhoods in ways that benefit the original population.

One advantage of the migration of wealthier people into depressed neighborhoods is the restoration and use of dilapidated buildings, which can have positive spillover effects throughout the community. But there are other ways to achieve this, including investments in charter or community schools and other community institutions that then become “hubs” for a range of medical and other services, as well as improved education.

Gentrification certainly comes with attendant dangers for low-income families, which policy makers should be on guard against. But it comes with potential benefits too, so we should be careful about simply “protecting” neighborhoods from the process.  Policies and regulations that insulate impoverished neighborhoods from gentrification could end up condemning these communities to yet another generation of deep poverty and segregation. 

       

Inequality remained a prominent theme in public debate during 2015, likely helped by the unexpected rise and resilience of democratic socialist Bernie Sanders' run for the Democratic presidential nomination. Although the labor market continued its slow recovery, wage growth remained fairly weak—especially for middle and low earners. The upper middle class continues to pull away from the middle, not least in terms of income and wealth.

But it has also become much clearer that inequality is a geographical issue, as much as a social and economic one. Whether the focus is on the more immediate matter of income inequality or the slower-burning issue of intergenerational mobility, there is huge variation between different places in the United States.

Not all cities are created equal…

National income trends are important, of course. But they can often disguise deep differences by place. The income required to be ‘rich,’ at least by comparison to those around you, varies significantly between different cities, for example. A household income of $100,000 puts you on almost on the top rung (around the 95^th percentile) of the income ladder in Detroit. But to reach the same heights in San Jose, California, you’d need an income three times as great, according to calculations by my colleague Alan Berube.

There are also very large differences in the extent of income inequality in different metropolitan areas. Using the inequality measure used in another recent paper by Berube, the ratio between incomes at the 20^th percentile and the 95^th percentile, shows that while some cities have large gaps between rich and poor, others look almost Scandinavian in their egalitarian distributions. Here are the 20/95 ratios for the three most equal and unequal cities in the U.S.:

Intergenerational mobility varies—a lot—by place

In a groundbreaking research paper in 2014, Raj Chetty and his team at the Equality of Opportunity Project at Harvard showed that rates of intergenerational income mobility also vary considerably between different cities. It was always a stretch to compare the U.S. to Denmark on this front, given the colossal differences between the countries. But such comparisons became virtually unconscionable once the variations within the U.S. become apparent.

This year, Chetty and his co-author Nathaniel Hendren went a step further and a big step closer to showing a causal impact of place on the prospects for children raised in different locations. Again relying on large administrative datasets, the two scholars were able to show the variation in earnings for the folk hailing from, say, Baltimore versus Baton Rouge.

Professor Chetty presented his new research at a Brookings event in June (which you can view here), just weeks after the eruption of protest and violence in Baltimore following the death of Freddie Gray. One striking finding was that the worst place in America to grow up, in terms of subsequent earnings, is Baltimore City. Critically, Chetty’s research design allows him to show that these differences do not reflect the characteristics of the people of Baltimore; but the characteristics of Baltimore itself. This downward effect on earnings is particularly bad for boys, as we highlighted in an earlier blog:

In related work, Chetty and his colleagues also show that children who move to a better place see an improvement in their own earnings—and that the younger they are when they move, the bigger the impact. The children of families who move as a result of the U.S. Department of Housing and Urban Development’s Moving to Opportunity program showed sizable improvements in their own outcomes, as Jonathan Rothwell highlighted in his blog, 'Sociology’s revenge: Moving to Opportunity (MTO) revisited.'

Race, place and opportunity

One of the findings from Chetty’s earlier work is that race, place, and opportunity intersect in important ways. Cities with more segregation, and those with larger black populations, tend to show weaker upward mobility patterns. In order to understand the obstacles to upward mobility, policymakers have to adopt both a place-conscious (Margery Turner) and a race-conscious perspective. This policy was the subject of another Brookings event in November, with contributions from the Deputy Prime Minister of Singapore, the Governor of Delaware, and the Mayor of Newton, Mass. (The event can still be viewed here; for my highlights see this piece.) Being poor and black is generally not the same as being poor and white. Being poor in Cleveland is not the same as being poor in Charlotte.

On equal opportunity: think local, act local

Many states and cities are upping their game on issues of equality and opportunity, for both bad and good reasons. The bad reason is the relative inertia of the federal government. The good reason is a growing recognition that many of the levers for improving opportunity lie in the hands of institutions and agents at the state and metro level. Colorado has adopted a life-cycle opportunity framework and is pioneering efforts to integrate health and social policy. Charlotte has a high-profile taskforce (which I advise) on improving opportunity. Cincinnati has pledged to lift 10,000 children out of poverty within five years. Louisville is leading a push on school desegregation. Kalamazoo is adding greater student supports to its existing promise of free college. Baltimore’s program to reduce infant mortality has shown remarkable success. Durham, N.C. has rolled out a universal home visiting program.

Many of these efforts are building on the emerging ideas around 'collective impact,' harnessing local resources of many kinds around a clearly-articulated, shared goal. Given the scholarship showing just how much particular places influences individual and broader outcomes, this is likely to be where much of the most important policy development will take place in coming years. In terms of equality—and especially equality of opportunity—we need to think local, and act local, too.

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

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Recent events in Taiwan, including the Sunflower Movement and the November 29 municipal elections in 2014, indicate changes in Taiwan’s political landscape. Political parties and candidates will have to adjust to changing public opinion and political trends as the January 2016 presidential and legislative elections approach. The two main parties, the Kuomintang (KMT) and the Democratic Progressive Party (DPP), face both opportunities and challenges in disseminating their messages and garnering public support. The strategies that each party develops in order to capture the necessary votes and seats will be critical. 

On April 22, the Center for East Asia Policy Studies at Brookings and Freeman Chair in China Studies at the Center for Strategic and International Studies co-hosted a public forum to identify and analyze the politics behind the 2016 elections in Taiwan. Leading experts from Taiwan and the United States assessed the new forces and phenomena within Taiwan politics; how the election system itself may contribute to election outcomes, especially for the Legislative Yuan; and how the major parties must respond to emerging trends.

 

 Join the conversation on Twitter at #TaiwanElections

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• Taiwan’s shifting political landscape and the politics of the 2016 elections

Transcript

• Transcript (.pdf)

Event Materials

• 20150422_taiwan_transcript

       

Amid anger and protests in Baltimore following the death of 25-year-old Freddie Gray from a spinal injury sustained after being arrested by police, much of the discussion has focused on the poverty-ridden neighborhood in which Gray grew up (Sandtown-Winchester, on the city’s west side). Conversation has centered around the economic disadvantages that Gray, his peers, and so many young adults are facing in certain neighborhoods throughout Baltimore and in other U.S. metro areas.

Metropolitan Policy Program Fellow Jennifer Vey spoke yesterday with CNN’s Maggie Lake on the poverty and economic inequality prevalent in Baltimore—particularly in impoverished neighborhoods like that of Gray’s and throughout the country.

In the interview, Vey says that, “it’s important to look at the events of the last few days in Baltimore against a backdrop of poverty, of entrenched joblessness, of social disconnectedness that’s prevalent in many Baltimore neighborhoods…but that isn’t unique to Baltimore, and I think that’s a really important point here, that we really need to put these issues in a much broader national context.

“I think what this really indicates is we’ve been operating under an economic model for quite some time that clearly isn’t working for large numbers of people in this country.”

Vey also discusses how we can work to break the cycle:

“What we’re really focused on at Brookings is trying to understand how cities and metropolitan areas can really be trying to grow the types of advanced industries that create good jobs, that create more jobs, and also focusing on how then, people can connect back to that economy. What can we do to make sure that more people are participating in that economic growth as it happens?”

She goes on to say that investment in education, workforce programs, and infrastructure are all key in incorporating everyone into a prosperous economy.

To learn more about poverty in Baltimore, read this piece by Karl Alexander.

       

Dark clouds have gathered over Malaysia as a crisis deepens. Two weeks ago, the country witnessed a massive street protest - dubbed Bersih (lit: “clean”) - organized by a network of civil society groups agitating for electoral reform. This was in fact the fourth iteration of the Bersih protests (Bersih also mobilized in 2007, 2011, and 2012), and managed to draw tens of thousands of participants (the exact number varies depending on who you ask). On this occasion, the protest was a culmination of widespread popular indignation at a scandal involving 1MDB, a government-owned strategic investment firm that accrued losses amounting to approximately USD10 billion over a short period of time, and the controversial "donation" of USD700 million funneled to the ruling party through the personal bank accounts of Prime Minister Najib Tun Razak.

All this is taking place against an inauspicious backdrop of sluggish economic growth, the depreciation of the Malaysian currency, and several exposes on the extravagant lifestyle of Najib’s wife, Rosmah Mansor.

How consequential was Bersih?

When Bersih first mobilized in 2007, it managed to harness a flood of dissatisfaction in opposition to the government of Abdullah Badawi, and contributed to major opposition political gains at the general election of 2008. The second and third protests have also been credited as contributing factors to further opposition inroads at the 2013 polls. Assessments of the latest iteration of Bersih however, have been more equivocal. On the one hand, Bersih 4.0 indicated that the movement can still draw huge crowds and give voice to popular discontent, which continues to grow. On the other hand, analysts have called attention in particular to the comparatively weak turnout of ethnic Malays at Bersih 4.0 compared to the previous protests. This is a crucial consideration that merits elaboration if Bersih is to be assessed as an instrument for change.

Given how Malaysian politics continues to set great store by ethnic identity, the support of the Malay majority demographic is integral for any social and political change to take place. By virtue of affirmative action, ethnic Malays are privileged recipients of scholarships and public sector jobs. Therein lies the problem for any social movement agitating for change. Years of conditioning through policy and propaganda have created a heavy reliance on the state, which in essence means UMNO (United Malays National Organisation), the dominant party in the ruling coalition which Prime Minister Najib helms as party president. While it is difficult to say conclusively that this explains the tepid reaction of ethnic Malays during the Bersih protests, it is not far-fetched to hypothesize that at least a contributing factor was the fear among recipients of scholarships and public sector employees that their benefits might be jeopardized (For example, I know that scholarship holders were sent letters "dissuading" them from participating in "political activities.").

Ultimately though, the most telling feature of the event may not have been the dearth of ethnic Malays but the presence of one particular Malay leader – Mahathir Mohamad, Malaysia’s nonagenarian former prime minister and unlikely Bersih participant.

Hitherto a supporter of Prime Minister Najib, Mahathir has grown increasingly unhappy with the prime minister’s policies. According to Mahathir himself, attempts had been made to share his reservations with Najib in private, but they were rebuffed. Goes by this account, it is not surprising that Najib’s alleged snub prompted private reservations to crescendo into harsh public criticism. By the middle of 2014, Mahathir had assumed the role of Malaysia’s conscience to become one of the loudest critics of Najib. Asked to explain his criticisms, Mahathir reportedly responded: “I have no choice but to withdraw my support. This (referring to the act of privately reaching out to Najib) has not been effective so I have to criticize. Many policies, approaches, and actions taken by the government under Najib have destroyed interracial ties, the economy, and the country’s finances.”[1]

Today, it is Mahathir, Malaysia’s longest serving prime minister who was in office from 1981 to 2003, who is leading the charge to discredit Najib and have him removed from office for malfeasance. What explains Mahathir’s singleness of purpose to have Najib removed from power? Part of the answer may lie in Mahathir’s own record of political quarrels.

What lies beneath Mahathir’s attacks?

Mahathir is no stranger to bitter and bloody personal political battles. His interventions in Malaysian politics throughout his career in office are legion (and many Malaysians might also say, legendary). Longtime Malaysia watchers and critics have assailed Mahathir for his autocratic streak evident, for example, in how he emaciated the judiciary by contriving to have supreme court judges (and on one occasion, the Lord President himself) removed from office, incapacitated the institution of the monarchy by pushing legislation that further curtailed the already-limited powers of the constitutional monarch, and suppressed opposition parties and civil society by using internal security legislation against them.

Mahathir was no less ruthless within UMNO, where he brooked no opposition. The history of political contests in UMNO has his fingerprints all over it. In 1969, it was his provocations as a contumacious backbencher that precipitated the resignation of the respected founding prime minister of Malaysia, Tunku Abdul Rahman. In 1987, Mahathir weathered a challenge to his leadership of UMNO mounted by political rivals (the then deputy prime minister, Musa Hitam, and minister for international trade, Razaleigh Hamzah), turned the tables on them, and had them exiled into political wilderness. In 1998, Mahathir successfully fended off the ambitious Anwar Ibrahim by sacking him, and later having him arrested, charged, and eventually convicted for corruption and sodomy. Even when not directly involved, he was never content to be a bystander, choosing instead to either instigate or leverage power plays. In 1978, he played no small part in nudging Sulaiman Palestin to challenge then incumbent Hussein Onn for party presidency (a move that many Malaysian analysts agree signaled the beginning of the end for Hussein’s political career even though he managed to fend off Sulaiman’s challenge). In 1993, Mahathir did little to prop his then deputy, Ghafar Baba, who was crumbling under the challenge of a charismatic Malay nationalist and rising star by the name of Anwar Ibrahim. It was Mahathir's machinations in 2008 that forced Abdullah Badawi, his handpicked successor no less, to resign a year later.

All said, Mahathir had accomplished the signal feat of being involved in some way or other in almost every political crisis that has beset UMNO since 1969. Several observations can be drawn from this record to explain Mahathir’s present behavior. First, Mahathir has long been possessed of a drive to be at the center of power in UMNO and Malaysian politics. Second, he is also in possession of an acute survival instinct that has enabled the über-politician to see off a string of challengers and ensured his political survival at the helm for 22 years. Finally, one can also plausibly surmise that at the core of his recent interventions is the desire – not unlike others who have held any high office for 22 years - to protect his legacy. Therein lie the rub, for it is not difficult to imagine that Mahathir might have deemed his legacy challenged by Anwar in 1998, ignored by Abdullah Badawi in 2008, and now, disregarded by Najib.

Will Najib survive?

A crucial factor that plays in this unfolding drama between two of Malaysia’s political heaveyweights – and which cannot be over-emphasized – is the fact that power in Malaysia ultimately lies in UMNO itself, sclerotic though the party may have become. It is on this score that Najib remains formidable, even for the likes of Mahathir.

Unlike Anwar, who was only a deputy president when he launched his abortive attempt to challenge Mahathir in 1998 (for which he paid a heavy political and personal price), Najib enjoys the advantage of incumbency. Unlike Abdullah Badawi, who chose to remain quiescent when stridently attacked latterly by Mahathir, Najib has used the powers of incumbency adroitly to head off any potential challenge and tighten his grip on the party. He has done so by out-maneuvering pretenders (he removed his deputy prime minister), sidelining opponents, and co-opting potential dissenters into his Cabinet. These divide-and-rule measures closely approximate what Mahathir himself had used to devastating effect when he was in power. For good measure, Najib has lifted a few additional moves from Mahathir’s own playbook: he has neutralized legal institutions, hunted down whistle blowers, brought security agencies to heel, and shut down newspapers and periodicals that have criticized him. Najib’s consolidation of power has been aided by the fact that there is at present no alternative leader within UMNO around whom a sufficiently extensive patronage network has been created. It bears repeating that the arid reality of Malaysian politics is that power still lies within UMNO, so he who controls the party controls Malaysia. On that score, even if Najib’s credibility is eroding in the eyes of the Malaysian populace, within UMNO his position does not appear to have weakened, nor does he seem to be buckling under pressure.

There are no signs that the enmity between the current and former prime ministers of Malaysia will abate anytime soon. Given the stakes, the depths to which ill-will between both parties now run, and how far the boundaries have already been pushed, the rancor is likely to intensify. Mahathir still commands a following especially online where his studied blog musings on www.chedet.cc, a key vehicle for his unrelenting assaults on Najib’s credibility, remain popular grist for the ever-churning Malaysian rumor mill. In response, Najib has defiantly circled the wagons and tightened his grip on levers of power. While Mahathir is unlikely to relent, the reality is that the avenues available to him to ramp up pressure on Najib are disappearing fast. A recent UMNO Supreme Council meeting that was expected to witness a further culling of Najib’s detractors and Mahathir’s sympathizers turned out to be a non-event and an endorsement of the status quo. In the final analysis then, it is difficult to see Mahathir ultimately prevailing over Najib, let alone bend the sitting prime minister and party president to his will.

       

Young people in Northeast Asia have become famous around the world for their creativity and consumer flair: K-pop and the Korean Wave, fancy smart phones and IT entrepreneurism, high-end fashion, obsession with plastic surgery, and web-based social networks. Political activism and participation are not the first two words that pop into one’s head when we think of young East Asians. 

But in recent years, youth in Hong Kong, Japan, South Korea, and Taiwan are leading political movements and asserting their interests onto the national political agenda. Although the specific issues of political concern differ, they are motivated by a common fear of economic decline for their generation, a rejection of political marginalization, and a moral awakening that their governments and the older generations are endangering their future, including democracy. 

Since 2014, young Japanese took up the issue of national security policy and the democratic process and became new defenders of the peace Constitution. They passionately opposed the Legislation for Peace and Security (aka Collective Self-Defense law), which Prime Minister Shinzo Abe’s government put before the Diet to permit Japan’s Self-Defense Forces to engage in military action outside Japan and in the aid of allies. The leading organization, Students Emergency Action for Liberal Democracy (SEALDs), used peaceful means to stage multi-faceted challenges—via street protests, songs, livestream broadcasts, humor, as well as slogans deliberately marked in the English language—to what they viewed as fundamentally unconstitutional and a violation of the democratic process. Most of Japan’s constitutional scholars agreed with them.

All protesters, young and old, condemned the CSD measures as a way for Japan to do what Article 9 of the Constitution forbids: engage in offensive military action without amending the Constitution. Many called it the “war law.” Not only college students but those in middle school and high school participated in protests and meetings while still in their school uniforms. Teens Stand Up To Oppose War Law (T-ns SOWL) is their main organization. In late August 2015, at the height of the protests across Japan, over 120,000 people held their rally in front of the Diet building while tens of thousands more gathered in other cities. In the mass gatherings, the SEALDs slogan, “What does democracy look like? This is what democracy looks like,” reverberated. Young people were drawing attention to themselves as practitioners and protectors of Japanese democracy, as opposed to the older Abe establishment in the government and the Diet. Although their protests did not stop the passing and enactment of the bill (March 2016), Japanese youth continue to oppose the government’s penchant to increase Japan’s military capabilities and posture. Their weakness, however, lies in having no institutional structure of leadership and influence. This reflects SEALDs’ belief in horizontal political participation and organizing, in itself a political stance in a society that is hierarchical and hyper-organized.

In Korea, President Park Geun-hye’s conservative Saenuri Party was projected to be the overwhelming winner of South Korea’s legislative election on April 13, 2016 as no pundits or surveys predicted the opposition Minjoo Party to emerge as the victor. But in a stunning twist, the Minjoo Party gained a single seat advantage over the ruling Saenuri Party and secured a liberal majority with an additional 44 seats from two minor opposition parties. This surprise outcome was not credited to the success of the opposition, but instead largely attributed to the increased turnout of voters in their twenties and thirties who are frustrated by socioeconomic conditions and the political status quo. Leading up to the election, university student bodies and various youth groups mobilized young voters to go the polls, which resulted in a 13 percent increase among 20-year-olds since the last election. Once labeled as a politically detached generation, South Korea’s youth sent a loud and powerful message that they have had enough.

On May 20, 2016, Taiwan inaugurated Tsai Ing-wen, its first woman president, and completed its third democratic transfer of power. In February, following the January 2016 elections, Taiwan’s opposition Democratic Progressive Party (DPP) became the majority party in the Legislative Yuan for the first time. While the Kuomintang, the conservative ruling party, was predicted to lose the executive, the losses in the Legislative Yuan validated the growing progressive movement that had been initiated by students in March 2014.

Meanwhile, in Hong Kong, student activist groups have mobilized beyond mass demonstrations, such as the Umbrella Movement of fall 2014. Angered by the setback to political reform and expanded citizen participation in choosing their leaders, the young students have organized into formal political parties, looking ahead to the September 2016 Legislative Council (LegCo) elections. Similar to the student groups in South Korea, the younger generation in Taiwan and Hong Kong has concluded that their voices are not only important, but necessary in determining their political and economic futures.

Why now? Why have younger activist movements emerged or gained ground recently?

Like their counterparts in South Korea, Taiwan, and Hong Kong, Japanese youth were affected by a series of political, legal, and economic events that decreased their trust in their respective governments and increased their sense of vulnerability and insecurity. The most prominent catalyst was the Fukushima nuclear plant disaster of March 2011. It generated a rash of citizen activism, including investigation and documentation teams, increased opposition to nuclear power plants, and lawsuits against the Japanese government and the Tokyo Electric Power Company. Because so many of the victims were children and youth, the political action was particularly poignant. Parents of the nearly 400,000 children residing in the Fukushima area at the time of the power plant melt-downs began organizing in April 2011.

One group sued the Koriyama City government, demanding that it provide financially and logistically for the affected children to reside and attend school in safe areas. Two years later, their lawsuit failed as the Sendai High Court ruled against the plaintiffs, stating that radiation levels are safe enough, even for children, and that families should pursue evacuation if they wish, at their own cost. The 400,000 or so children (up to 18 years of age at the time of the accident) will be required to get tested for radiation-related health effects for the rest of their lives because children are known to be more vulnerable to radiation than adults. As of April 2016, citizens were disappointed again as their injunction against the reopening of two reactors at a nuclear power plant in Kagoshima Prefecture was overturned by the Fukuoka High Court. Young and old alike have joined together to oppose nuclear energy in Japan.

Young people also resent the expansion of non-regular employment and the Worker Dispatch Law, which decreased the labor rights and protections of dispatched or temporary workers since its inception in 1985. The global economic crisis of 2007-09 highlighted young people’s economic vulnerability as jobs became harder to obtain and those in temporary arrangements, with no seniority in age and experience, were easily laid off. The 2012 revision of the Dispatch Law prohibited the employment of a temp for more than three years in certain job categories was another blow to young people, who worry that they will face “lifelong dispatch.” SEALDs also warns against the economic hardship on many Japanese, including young adults, when the proposed consumption tax of 10 percent kicks in come April 2017: “If the consumption tax is increased without rebuilding the system of redistribution centered on social security, the wealth gap will continue to widen.”

For South Korea, signs of frustration began to brew in 2013 when a hand-written poster at the elite Korea University circulated around the internet. Written in the form of a letter, the poster conveyed frustration against perceived social injustices (e.g. 4,213 workers were dismissed for protesting the privatization of the state-owned Korea Railroad Co.), which reverberated beyond the student population. Most striking was the poignant criticism of the lack of youth representation in government and young people’s sense of repeated neglect by the older political establishment. The letter was a sobering reminder that today’s youth feel they have little say in shaping their own futures.

This political wake-up call was amplified following the government’s inadequate handling of the Sewol ferry tragedy in spring 2014 and the Middle East Respiratory Syndrome outbreak (MERS) in spring 2015. When reports revealed that state collusion with the shipping industry led to lax maritime regulations and that the government had failed to distribute time-sensitive information about MERS, an enraged public demanded accountability for the tragic loss of innocent lives. The sinking of Sewol killed 304 passengers out of 476 on board, most of whom were high school students. This wave of public distrust and resentment triggered a larger outcry against the lack of transparency and corruption in both government and businesses.

Mounting frustrations from the younger generation culminated in the creation of “Hell Joseon,” a satirical phrase and an online community named after the country’s “hellish” economic conditions and the class-based society of Joseon, Korea’s former kingdom before Japanese colonization. The phrase is used to describe a grim society where social mobility is impossible, only the privileged are immune from the plight of unemployment, and immigration is the only way out. The popularity and wide circulation of this term led to a public debate about the hardships of Korean society, prompting even politicians to use the term during the 2015 National Assembly inspection of government offices. Naturally, both the term and its implications made its way into the campaign trails, as evidenced in the prioritization of domestic issues in candidates’ platforms for the 2016 general election.

In Taiwan, the younger generation burst onto the political scene in March 2014, when a group of activists stormed and occupied the Legislative Yuan for twenty-three days. The occupation, known as the “Sunflower Movement,” was the culmination of the growing frustration with Taiwan’s economic climate coupled with the younger generation’s political upbringing in a democracy. The student occupiers focused on the Cross-Strait Service Trade Agreement (CSSTA), which, to them, embodied both economic and security perils created by the then-president Ma Ying-jeou’s practice of political thaw and tighter economic ties with mainland China. The protesters viewed the benefits of the CSSTA as biased favoring big corporations but hurting small-to-medium enterprises. Additionally, these young occupiers felt that under the KMT, Taiwan’s worsening economy was becoming more dependent on the Mainland. They feared that Beijing was taking advantage of these agreements as a means to leverage its power over the island, which would make China’s ultimate goal of reunification all the easier.

Hong Kong’s political reform process, which was initiated prior to Britain’s handover of the territory back to China in 1997, has garnered more attention in recent years due to upcoming milestones. Since the reversion, China has taken gradual steps to ensure Hong Kong’s political system adheres to the Basic Law, which is the mini-constitution that protects “one country, two systems”, the guiding principle for China’s sovereignty over the territory, at least until 2047. As outlined by a 2007 PRC National People’s Congress Standing Committee (NPC-SC) decision, Hong Kong residents would be able to choose the chief executive by means of “universal suffrage” for the 2017 election.

However, China’s interpretation of “universal suffrage” differed from the definition pursued by the pan-democratic political camp in Hong Kong. When an August 2014 NPC-SC decision outlined that the Hong Kong public could only choose between two to three candidates, who would be selected through a screening committee biased towards Beijing, high school and university students felt particularly deceived. Several veteran pan-democratic activists had already formed the “Occupy Central” movement, which adhered to non-violent, consultative, civil disobedience norms. Without a representative government, demonstrations have become the go-to way for Hong Kong people to voice their opinions. So, following this tradition, young activists decided to move beyond the “Occupy Central” methods when they boycotted class in September 2014, and thus, launched the three-month mass demonstration known as “the Umbrella Movement.”

What is driving these movements? Economic factors or political values?

In all four cases, economic factors including youth unemployment, job insecurity, low wages, and social inequality are critical motivators driving the younger generation’s political actions. The youth unemployment rate in South Korea hit a record high of 12.5 percent in February, which is three times the overall unemployment rate, and about one-third of those who are employed hold temporary jobs. In Taiwan, between 2014 and 2015, youth unemployment averaged 12.9 percent, reaching a high of 14 percent in August 2014. Even for those with jobs in South Korea, real wages have not increased commensurate with the country’s economic growth. Over the past five years, the annual average increase in real wages was only 1.34 percent, barely half the average economic growth rate of 2.96 percent. The unemployment rates among Japanese youth are lower (8 percent in 2011 declining to 6.5 percent in 2014), but a large number of young Japanese with jobs consider themselves as temporary, contract or part-time workers. What’s startling is that the Japanese government “Survey of Employment of Young People” (ages 15-34) in 2014 found that a whopping 40.3 percent of the respondents stated that their “main source of income” comes from parents. In addition, a recent survey by the Japanese branch of the U.K.-based Big Issue Foundation, which assists the homeless, found “77 percent of the nation’s low-income unmarried youths live with their parents mainly for financial reasons.”^[1] Even if these young folks have not launched their version of “Hell Nippon,” they certainly would sympathize with their Korean counterparts’ fears of economic uncertainty and worries about social marginalization through extended infantilization.

Inequality also is manifested in access to affordable housing, with both Taiwan and Hong Kong experiencing exorbitant real estate markets. In Taipei, the ratio of median housing price to median annual household income hit 15.7 in 2014, thus coining the phrase that you’d have to neither eat nor drink for 15 years to afford housing. In Hong Kong, 180-square-foot “mosquito apartments” can cost $US 517,000. Housing prices have steadily increased in South Korea as well, where the average price of an apartment is roughly $10,000 per 35 square feet. 

But compounding these economic disappointments is young citizens’ disillusionment with their respective governments. Since 2013, when President Park Geun-hye took office, Freedom House has downgraded South Korea’s score from the highest at #1 for political rights to #2 in 2014 and 2015. Its overall freedom score slipped from 1.5 to 2.0. Specifically, the report emphasized the “increased intimidation of political opponents of President Park Geun-hye and crackdowns on public criticism of her performance following the Sewol ferry accident.” Additionally, President Park’s administration has been plagued with controversies from the start, with charges of election meddling in her favor by the National Intelligence Service, a divisive debate over state-sanctioned history textbooks, which her administration has spearheaded Additionally, her administration’s arbitrary use of the controversial National Security Law to restrict freedom of speech and freedom of association reminded many Koreans of the pre-democratic Korea under the control of her father, the late President Park Chung-hee.

Like their peers in South Korea, the younger generation in Taiwan has only known a democratic Taiwan, so unlike their parents’ generation who lived under an authoritarian regime, they now seek a higher standard of governance and fairness and accountability from political institutions. But, the democracy they know is a young democracy, one trying to overcome, but still prone to, corruption, unfair practices and deep partisan divides. So, when they see problems in their democratic institutions, such as opacity in passing the CSSTA bill, they regard themselves as protectors of Taiwan’s democracy, justified in opposing the government and articulating their criticism.

The young Japanese of SEALDs profess a similar purpose: “We believe it is absolutely essential for [sic] opposing the current government to establish a unity of opposition parties and its supporters who share liberal values such as constitutionalism, social security and peace diplomacy. This unity will create a new political culture which encourages citizen’s political participation and revitalizes representational democracy.”^[2]

Economic frustrations in Hong Kong have coalesced into a political pursuit toward a more representative and democratic political system. In particular, for the millennial generation, the year 2047 – when the one country, two systems agreement expires – is not a distant date in the future as it was for the creators of the Basic Law in the 1990s. Therefore, the young activists believe they should help set the parameters and pace of the political reforms they deem necessary to achieve a society they envision and that they, not their elders, will have to lead.

Implications for the future? Forerunner of divisive generational politics?

With the September 2016 legislative council (LegCo) and 2017 chief executive elections approaching, Hong Kong’s student groups have begun to organize beyond demonstrations into political parties. Joshua Wong, one of the student leaders during the Umbrella Movement, launched the Demosisto party, which plans to run several candidates in the LegCo elections, and calls for a referendum on one-country, two-systems and on self-determination after 2047. Other new parties led by young activists have taken even more extreme stances, such as the Hong Kong National Party, which calls for Hong Kong independence. The upcoming challenge for the new political parties, however, is that the pan-democratic camp is fractured, while the pro-Beijing establishment camp has remained more-or-less unified. As witnessed in the failed political reform bill in June 2015, which, as Richard Bush argues, could have provided a narrow path for a pan-democratic candidate, Beijing can ride out a political deadlock in Hong Kong. But, the younger generation in Hong Kong feels that they have little time to waste in implementing political reforms. The greatest challenge ahead of Hong Kong will be finding a way for the moderate and radical sides of the pan-democratic camp to compromise and unify.

The “Sunflower Movement” helped ignite the pan-green coalition in Taiwan, leading to demoralizing defeats for the Kuomintang (KMT) Party in both the local elections of November 2014 and presidential and legislative elections of January 2016. In addition to the DPP gaining a majority in the Legislative Yuan, the New Power Party, which emerged directly from the Sunflower Movement, won five legislative seats, making it the third largest party in Taiwan. During her inauguration speech on May 20, 2016, President Tsai Ing-wen focused on a wide range of domestic issues, and even spoke directly to young people, vowing to help change their current predicament through a new model of economic development “based on the core values of innovation, employment and equitable distribution.”

In reference to cross-Strait relations, Tsai did not say what Beijing wanted her to say, which means Taiwan can expect some economic and strategic blowback from the Mainland. In particular, if Beijing punishes Taiwan via economic tools, then that could derail Tsai’s plans to help pull young people out of their economic rut. So, while it’s tempting to say the Taiwanese youth movement succeeded in getting on the national agenda through the recent election, the Tsai administration has many hurdles to jump in order to fully achieve the movement’s objectives.

While Tsai has time to consider and clear the political hurdles, President Park is poised for a rough run in the final stage of her term as she faces a formidable progressive bloc in the new legislature. Political commentators are already discussing the prospects of a progressive-led Blue House in 2017 and what this would mean for ROK foreign policy, especially toward North Korea. But beyond the immediate policy implications, the generational divide that emerged so starkly in the recent election may portend significant changes for South Korean politics. What was noteworthy in this election was the role of the People’s Party, a new minor opposition that offered an alternative choice for young voters disillusioned by the traditional two parties. Led by an unassuming yet popular figure vowing to tackle the old establishment, the People’s Party managed to win a higher percentage (26.7 percent) of the popular vote than the Minjoo Party (25.5 percent) and contributed to a progressive majority despite concerns over vote-splitting. In fact, this third party only split regional loyalties, receiving a significant amount of the proportional votes from regions traditionally tied to the two major parties.

Northeast Asia is a region with the fastest-ageing population and the lowest birth rates in the world. It is possible that young people will increasingly find themselves at the bottom of an upside-down pyramid, holding up or held down by the size and weight of the older generations. The latter will form the majority of voters with the capacity to choose leaders and policies that support or undermine the interests of the younger generations. Youth today need to prepare for and practice greater political participation now if they are to lead their respective societies into the depths of the 21st century. Most likely, generational politics will become a sharper and more potent force in northeast Asia. 

       

       

       

       

In Pennsylvania, the next major presidential primary state, concerns about the economy loom large as global competition, economic restructuring, and an aging workforce threaten the state’s ability to prosper. Thanks to these assets, the six metro areas generate 80 percent of the state’s economic output even though they house 68 percent of its population. A true economic agenda for the state must speak to the core assets of Pennsylvania’s economy and where these assets are located: the state’s many small and large metropolitan areas. In short, this brief finds that:

• To help Pennsylvania prosper, federal leaders must leverage four key assets that matter today—innovation, human capital, infrastructure, and quality places. These assets help increase the productivity of firms and workers, boost the incomes of families and workers, and can help the state and nation grow in more fiscally and environmentally responsible ways.
• These four assets are highly concentrated in the state’s economic engines, its metropolitan areas. There are 16 metro areas in the Commonwealth, ranging from Philadelphia, the most populous, to Williamsport, the smallest. The top six metropolitan areas alone generate the bulk of the state’s innovation (80 percent of all patenting), contain the majority of the state’s educated workforce (77 percent of all adults with a bachelors degree), and serve as the state’s transport hubs.
• Despite these assets, Pennsylvania’s metro areas have yet to achieve their full economic potential. For instance, Philadelphia and Pittsburgh enjoy strengths in innovation, but they both struggle to convert their research investments into commercial products and real jobs. The Scranton metro area is emerging as a satellite of the New York City region, but it’s hampered by the absence of frequent and reliable transportation connections and inadequate broadband coverage.
• Federal leaders must advance an economic agenda that empowers states and metro areas to leverage their assets and help the nation prosper. To that end, they should establish a single federal entity that works with industry, states, and metro areas to ensure that innovation results in jobs and helps businesses small and large modernize. The federal government should strengthen access and success through the entire education pipeline. They should overhaul and create a 21st century transportation system. And they should use housing policy to support quality, mixed-income communities rather than perpetuating distressed neighborhoods with few school and job options.

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Ruy Teixeira joins NPR's Talk of the Nation host Neal Conan to discuss the Pennsylvania primary and the working-class vote.

NEAL CONAN: With us here in Studio 3A is Ruy Teixeira, a visiting fellow at Brookings Institution, co-author of the report "The Decline of the White Working Class and the Rise of a Mass Upper Middle Class." He's kind enough to be with us here. Thanks very much for coming in, nice to see you again.

RUY TEIXEIRA: Great to be here.

NEAL CONAN: And, what are some of the common themes that we see around these working class voters that Sherry Linkon was talking to us about?

RUY TEIXEIRA: Well, I think Sherry touched on a number of them. I think one critical theme, obviously, for this election is their level of economic discontent and their sense that the economic ground has shifted underneath their feet, and they are sort of wondering where they are going to go in the future, where their kids are going to go, sort of, where their way of life is going to go.

This is a matter of great concern to these voters because the last, you know, actually the last several years, have not been kind to them. But more broadly, you can look back, you know, 35 years and say the last 35 years has not been very kind to them. This has been a period when America, by and large, has grown not as fast as it did and incomes have not risen as fast as they used to, but it's been particularly bad for these voters.

Anyone with less than a four-year college degree has really done rather poorly since about the middle 1970s. So, there's a real question in their minds of what America has in store for them in the future. And they are very interested to hear what politicians have to say about it. So far, it hasn't seemed to work out quite so well.

And the other side of it is really touched on by the controversy that you're referring to which is their sense of cultural traditionalism, their sense that, especially the Democrats, perhaps, seem out of touch with that at times. It seems like they don't respect their way of life. It seems like their social liberalism gets in the way of connecting to these voters and really hearing what they have to say and what their commitments and priorities really are and a sense of elitism on their part.

And that's really what, I think, Obama's getting slammed on this, you know, in general, and of course, obviously the McCain and Clinton campaigns have some interest in pushing this, but it did give them an opening to raise this issue and argue that, in fact, he is elitist. And Democrats, if they wish to get away from this, they have to adopt - I think it's a little bit unfair to the remark once you look at it in context.

But nevertheless, the perception was there particularly, I think the stuff about guns and about religion. I mean, can't you, like, own a gun and go to church and not be clinging to it? Because you know, your economic way of life is deteriorating. Again, I don't think that's what he meant. But that's how it's being interpreted. And that's where the discussion is.

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In the long run-up to the Pennsylvania primary, there's been a good deal of candidate discussion of the state's economy and how to fix it.

But missing from the prescriptions of what the federal government would do and how it would do it has been a discussion of where it will happen.

That needs to change because place matters. For all the ink spilled on the declining fortunes of the commonwealth, there are many bright spots around the state that could be catalysts to growth and prosperity.

Recent Brookings research shows strength in varied fields across the state:

Advanced health care, pharmaceuticals, and information technology in Greater Philadelphia.

Health care, architecture and engineering, and banking in Pittsburgh.

Heavy construction, machinery and food processing in Lancaster.

Industrial gases, health care and higher education in the Lehigh Valley.

The state's economy is an amalgam of its 16 metropolitan areas that generate 92 percent of its economic output.

The top six metropolitan areas alone - Philadelphia, Pittsburgh, Harrisburg-Carlisle, Allentown-Bethlehem-Easton, Scranton/Wilkes-Barre, and Lancaster - constitute 68.4 percent of the state's population and produce 80.5 percent of the state's economic output.

The research underscores that four key assets overwhelmingly located in metropolitan areas - innovation, modern infrastructure, strong human capital, and quality places - are needed today to drive productivity of firms and workers, improve the wealth and opportunities of families, and ensure sustainable growth. America's metropolitan assets - the universities, the health-care concentrations, and the skilled-labor pools - are the drivers of our national economy and the key to future American competitiveness and success.

So what does this mean for Greater Philadelphia? And what would a more thoughtful federal role look like?

Two realms with extensive current federal involvement are transportation infrastructure and innovation. Cogent efforts from Washington in both these areas could significantly leverage state and local efforts.

Rather than thinly spreading transportation-infrastructure dollars across the country, the federal government should spend strategically.

For Greater Philadelphia, supporting its competitive advantage as the linchpin of Amtrak's Northeast Corridor with federal dollars for more frequent and reliable service would strengthen the region as a rail hub, as has been championed by the Greater Philadelphia Chamber of Commerce.

Additionally, federal transportation policy should empower metropolitan areas with the discretion to spend funds flexibly, whether that's improving the aging SEPTA system, beginning the work of reinventing and burying Interstate 95 to increase access to the Delaware waterfront, or increasing transit access of city residents to suburban jobs.

Regarding innovation, unfortunately, the federal government currently has no unified national strategy to maximize high-quality jobs and spread their benefits throughout the Philadelphia region. Instead, it has a series of highly fragmented investments and programs.

Current programs put strong emphasis on research, but are insufficiently attentive to the commercialization of that research and blind to how innovation and jobs arise from the intense interaction of firms, industry associations, workers, universities and investors - a nexus ready to be capitalized on in Greater Philadelphia as documented by the Economy League of Philadelphia in a report for the CEO Council for Growth.

To this end, the federal government should reorganize its efforts and create a National Innovation Foundation, a nimble, lean organization whose sole purpose would be to work with industries, universities, business chambers, and local and state governments to spur innovation. Similar, successful national agencies are already up and running in competing nations, such as Britain, France, Sweden and Japan.

This effort should include R&D and support for technology-intensive industries such as information technology and pharmaceuticals, but it also must make small and medium-size manufacturers more competitive and train workers in manufacturing and low-tech services to work smarter.

Looking forward, our federal government must realize this is a "Metro Nation" and value and strengthen economic juggernauts such as Philadelphia.

Only by organizing our currently fragmented investments in transportation and innovation - and targeting them where they will provide the greatest return, metropolitan America - will the United States continue not only to compete, but also to lead.

      

This is the first in a series of reports on the demographic and political dynamics under way in 10 “battleground” states, deemed to be crucial in deciding the 2008 election. As part of the Metropolitan Policy Program’s Blueprint for American Prosperity, this series will provide an electoral component to the initiative’s analysis of and prescriptions for bolstering the health and vitality of America’s metropolitan areas, the engines of the U.S economy. This report focuses on Pennsylvania. Among its specific findings are:

• Pennsylvania is becoming a demographic “bridge” between Midwestern states like Ohio and other Northeastern states like New Jersey, as its new growth is tied to urban coastal regions. While often classed as a so-called “Rust Belt” state, its eastern and south central regions are increasingly becoming part of the nation’s Northeast Corridor, with new growth and demographic profiles that warrant attention in upcoming elections.
• Eligible voter populations indicate a state in transition, where minorities, especially Hispanics, and white college graduates are increasingly important, but where white working class voters continue to play a central role. While white working class voters continue to decline as a share of voters and are less likely to work in manufacturing and goods production, they are still a critical segment of voters, including in the fast-growing Harrisburg and Allentown regions where their absolute numbers are actually increasing.
• Recent Democratic victories in Pennsylvania have featured strong support from groups like minorities, single women, and the young but have also benefited from relatively strong support among the white working class, especially among its upwardly mobile segment that has some college education. Compared to 1988, both the latter group and white college graduates have increased their support for Democrats. And both groups have increased their share of voters over the time period.
• Political shifts in Pennsylvania since 1988 have seen the growing eastern part of the state swing toward the Democrats, producing four straight presidential victories for that party. The swing has been sharpest in the Philadelphia suburbs, but has also been strong in the Allentown region and even affected the pro-Republican Harrisburg region. Countering this swing, the declining western part of the state has been moving toward the GOP.
• Key trends and groups to watch in 2008 include the white working class, especially whites with some college, who, unlike the rest of this group, are growing; white college graduates; and Hispanics, who have been driving the growth of the minority vote.

These trends could have their strongest impact in the fast-growing Allentown region, which may move solidly into the Democratic column in 2008 and beyond, following the trajectory of the Philadelphia suburbs. The even-faster-growing Harrisburg region remains a GOP firewall, but the same trends could make that region more closely contested in 2008.

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In last night’s Pennsylvania primary, Hillary Clinton won a sweeping if not quite overwhelming victory, receiving 55 percent of the vote and reducing Barack Obama’s overall popular vote edge by more than 200,000. Because of the Democratic party’s system of proportional representation, she netted fewer than 15 pledged delegates. These results have quieted calls for her to leave the race and will probably slow the steady flow of superdelegates to Obama. Nonetheless, her path to the nomination remains steep.

The demographics of the Pennsylvania vote followed a now-familiar pattern. Obama won among voters younger than 40, while Clinton prevailed among older voters. Obama won in big cities and some inner suburbs; Clinton carried suburbs overall while winning more than 60 percent of the small town and rural vote. Clinton did 9 points worse among men than among women, who constituted 59 percent of last night’s voters. She received 62 percent of the vote from gun-owning households and almost three-fifths of the vote from union households. Obama carried voters from families making less than $15,000 and more than $150,000; Clinton carried everyone in between. She received 64 percent of the vote from high school graduates but only 48 percent from college graduates. Obama won 55 percent of the vote among those who consider themselves “very liberal,” while Clinton got 60 percent of the vote among self-described moderates. Clinton took 56 percent among long-time Democrats, while Obama took 62 percent of new Democratic primary voters—principally Republicans and Independents who registered as Democrats to participate, but also the 4 percent of the primary electorate that previously been unregistered.

There is evidence that religion, gender and race all figured in the results. Clinton received 58 percent of the white Protestant vote and a stunning 71 percent of white Catholics. Obama got 64 percent of those who profess no religion and 56 percent of those who never attend church. Clinton did 22 points better among those who said gender was important than among those who did not. (Intriguingly, men who said it mattered were also more likely to support Clinton.) By contrast, race appears to have been a negative for Obama: whites who said it mattered gave 75 percent of their votes to Clinton, versus only 58 percent for those who said it did not. While nearly half the whites for whom race mattered refused to say that they would be willing to support Obama in the general election, their sentiments may well soften in coming months as differences between the parties come to the fore.

The long campaign mattered, and it left some bruises. 68 percent of the voters said that Clinton had attacked unfairly; 50 percent thought Obama had. Nearly a quarter of the electorate thought that Clinton was solely responsible for unfair attacks, versus only 6 percent who thought Obama was. Only 57 percent of the electorate thought that Clinton was honest and trustworthy, versus 67 percent for Obama. Only 40 percent said they would be satisfied if either candidate won; 32 percent wanted only Clinton, and 23 percent only Obama. But however negative the contest may have turned, it appears to have worked to Clinton’s advantage: she received 57 percent among voters who decided during the last week before the primary, 5 points better than she did among those who decided earlier.

The results also confirmed the surge in concern about the economy. Fifty-five percent of the voters regarded the economy as the top issue, versus only 27 percent for the war in Iraq and a modest 14 percent for health care. Obama prevailed only among voters who gave top priority to Iraq, while Clinton received 54 percent of the health care voters and 58 percent of the economy voters.

Attention now shifts to the May 6 primaries in North Carolina and Indiana. Obama is expected to prevail in North Carolina, but Indiana offers a level playing field. A split decision would be likely to prolong the race, while an Obama sweep might well induce many undecided superdelegates to declare for him and bring this protracted contest to an end. In addition, Obama’s fundraising edge is becoming increasingly important. Not long into her victory speech, Clinton made an urgent pitch for new contributions. Facing a mounting debt and dwindling cash on hand, her ability to continue on until the end of the primary and caucus season in early June may well depend on the size and speed of her supporters’ response.

      

Bringing together the five counties of Southeastern Pennsylvania, the nonprofit Metropolitan Caucus, a new regional consortium there, is promoting a joint regional application for ARRA’s competitive Energy Efficiency and Conservation Block Grant dollars. Its four-part proposal, which will add and refine partners and programs over time, draws on the collaboration of multiple regional institutions to establish and operate a loan fund for green building and retrofits; support clean energy technology deployment; assist local governments with energy efficiency plans; and measure the energy performance of public facilities.

The newly created Metropolitan Caucus of southeastern Pennsylvania is leading the bold new regional energy efficiency strategy targeting for the competitive Energy Efficiency and Conservation Block Grants (EECBG) in the American Recovery and Reinvestment Act (ARRA). Unprecedented for the region, the Metropolitan Caucus has brought together five area counties—Bucks, Chester, Delaware, Montgomery, and Philadelphia—to make the most of the stimulus opportunity by coordinating their plans, goals, and assets to achieve maximum regional benefit. Their proposed joint EECBG competitive application for roughly $35 million calls for financing construction and retrofits, supporting clean energy companies, measuring building energy performance, and assisting local governments in implementing various sustainability solutions. To carry out each of these activities, the caucus intends to engage in broad cross-sector collaboration to leverage the strengths and unique assets of regional educational institutions, key nonprofits, and planning agencies.

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Cities across America are undergoing massive demographic change, and Philadelphia is no exception. Understanding this change, and effectively managing it, will be key to our national progress and prosperity in this decade and beyond.

A new report from the Brookings Institution, "The State of Metropolitan America," describes a nation that has grown larger, more diverse, more suburban, and more educated in the first decade of this century. These characteristics offer the potential for a tremendous advantage among industrialized nations as the global economy becomes more integrated and more competitive.

The Philadelphia region, for instance, is now home to 92 colleges and universities - more than the renowned concentration of higher education institutions in the Boston area. In our research on the demographic transformation of the nation, we refer to Philadelphia as a "skilled anchor" - one of 19 metro areas, including Baltimore, Rochester, N.Y., and Boston, that have made a transition from manufacturing and shipping to service-based economies. Medical and educational institutions have often driven this transformation, along with specialized manufacturing.

Skilled anchors face challenges, however, due to other trends. While 32 percent of Philadelphia area residents over the age of 25 hold bachelor's degrees, only 21 percent of residents of the city itself have been educated beyond high school.

That is cause for concern, especially as baby boomers begin to retire - most notably in the suburbs, where more than 40 percent of the residents are boomers and seniors. The young people who will take their place in the workforce are not completing college education at the same rate as their predecessors. This is problematic considering that median household income declined during the 2000s, and higher education is closely correlated with higher wages.

Meeting the region's future workforce challenges - that is, connecting residents to high-quality jobs in the education, medicine, life-sciences, and pharmaceutical sectors - will require education policies that prepare all children for successful postsecondary education, so they can build on the economic momentum of the retiring baby boomers.

As part of the national Achieving the Dream Initiative, several foundations are working together to help community colleges in Michigan, Ohio, and Indiana improve completion rates for minority and low-income students who are most at risk of dropping out and not getting the skills and credentials they need to succeed in the workforce.

Other demographic trends represent challenges as well as opportunities. The Philadelphia region's foreign-born population grew by 30 percent in the 2000s, albeit from a relatively small base. Efforts to incorporate immigrants into the mainstream of economic and civic life - such as Philadelphia's language-access policy, its one-stop education office, and the region's emerging Metropolitan Caucus - are all praiseworthy. But more is required.

At the same time, while solutions must be built from the ground up, the Philadelphia region can't go it alone. The federal government can't wait for megacities such as Philadelphia to work out the massive transformation under way by themselves. There are macro-level federal responses to these trends that could and should emanate from Washington.

Among them are comprehensive immigration reform that includes explicit means for improving the integration of new Americans into our society and economy; a revamping of transportation and housing policy that reduces energy-inefficient sprawl, accommodates seniors, and provides access to employment centers; programs to increase postsecondary education for our emerging workforce; and a redoubling of efforts to make work pay for working families, such as the Earned Income Tax Credit.

Over the past decade, between two recessions, Philadelphia has made much progress. Today, the region must capitalize on its hard-earned gains and address emerging challenges with similar conviction.

Philadelphia and America are changing in front of our eyes. Public policy decisions crucial to our health, prosperity, and security need to be informed by what's happening now. We cannot afford to look for our future in the rearview mirror.

       

This week will bring a cornucopia of new data, an econo-nerd's dream. Unfortunately for some of us nerds, there won't be any releases on state and local government finances. (The Census Bureau generally has to wait for all states to report and, as you can imagine, some states are laggards.)

However, there will still be a lot in this week's numbers for those who follow state and local government finances, pay into state and local coffers, or consume predominantly state and local public services like education, roads, and health care. Here are a few trends worth watching:

First, Tuesday's March S&P/Case Shiller house price indexes will be important for states whose fortunes are tied to real estate, especially in the West and Southwest. Macroeconomic forecasters are predicting home prices will decline slightly compared to one year ago but continue to increase month-to-month, suggesting that perhaps the market has hit bottom.

That would be good news for the housing sector. However, research from Federal Reserve Board economists Byron Lutz, Raven Molloy, and Hui Shan suggests that any boon to state and local revenues would be minor. They calculate the housing bust per se generated only a $22 billion drop in taxes over three years, equivalent to roughly 3 percent of annual state and local revenues excluding federal funds.

Meanwhile, the latest Census data suggest that state taxes are growing, but at a pace that is slower than usual. More worrisome, the pace appears to be moderating. In recent weeks, California, New York, New Jersey, Pennsylvania, and Rhode Island have all reported taxes coming in below projections. Also, local property taxes are likely to remain in the doldrums for some time. They tend to respond to house price changes with a delay and thus just started showing the effects of the housing bust in late 2010. Property taxes recently turned positive again, but these gains are anemic by historical standards and likely caused by rate hikes in some jurisdictions rather than improving property values.

Next up this week are Bureau of Economic Analysis revisions to first quarter GDP. Macroeconomists will be attuned to how the revisions compare to advance estimates and what this portends for the recovery. They might also take note of whether these governments are detracting from growth - as they have done by an average of 0.2 percentage points in each quarter since 2008 - or contributing to it as usual. State and local watchers will be more focused on state and local spending, which unlike previous downturns, has declined in real per capita terms and not yet recovered.

That leads us to the biggest number to watch this week - Friday's jobs report. State and local employment is already down by 665,000 jobs or about 3.5 percent from its pre-recession peak. Recent trends suggest that cuts may be abating, but this total masks differences across subsectors - state education has been adding jobs while losses continue in all other subsectors, especially at the local level.

Ongoing state and local job losses also distinguish this recession from previous downturns in the modern era. This may be in keeping with the depths of this Great Recession. However, it's hard to imagine state and local residents aren't feeling the pinch of higher property tax burdens or lower services. To take one example, Governor Jerry Brown has proposed closing California's $16 billion budget gap by converting state employees to a four day work week and closing state parks. From a macro perspective, the fiscal tightening may be over. But that doesn't mean state and local governments aren't still a real drag.

       

The “diversity explosion,” described in my recent book, is altering all parts of American life but particularly the lives of our younger population. As the white population ages and whites continue to decline in numbers among our under-30 population, as recent Census tabulations project, a growing portion of America’s children are racial minorities from a kaleidoscope of backgrounds in terms of their parents’ or grandparents’ place of birth. Origin countries include Mexico, China, the Philippines, India, Vietnam, El Salvador, Korea, the Dominican Republic, Guatemala, Jamaica, Colombia, Haiti, Honduras, Ecuador, Peru, Taiwan, Brazil, and others. 

A dramatic remaking of the nation’s child population is under way; in growing parts of the country growth of the child population is synonymous with the growth of minority children. More than one-third of the 100 largest metropolitan areas now have minority-white child populations. California and Texas house the largest number of these metropolitan areas, and Hispanics constitute the largest minorities. Florida, Georgia, and Arizona each contain more than one of these metro areas; the newest include Atlanta, Orlando, and Phoenix. And in many other “whiter” areas, such as Allentown, Pa. on the periphery of the New York megalopolis, the share of minorities among children is increasing. 

Of course, metro areas such as Los Angeles, Miami, and New York are used to accommodating large numbers of young children from dozens of foreign countries. Yet the first-generation immigrant children in large sections of the Southeast and Mountain West and scattered parts of “middle America” represent the front lines of the country’s diversity explosion. For an overview of U.S. county profiles by race and age, see the U.S. interactive map.

Material adapted from Diversity Explosion: How New Racial Demographics Are Remaking America by William H. Frey, 2014.