How Lack of Mobility Hurts the Economy

The debate over what the government can do to help the economy is a pretty polarizing topic in American politics these days, but there's one role for government that a supermajority of Americans agree on: promoting economic mobility.

 A recent poll by the Pew Charitable Trusts found that 83% of respondents supported a government role in promoting economic mobility, and 58% believed the government could be doing more to help Americans improve their prospects.

While there were predictable divisions over the appropriate methods, 91% of Democrats and 73% of Republicans said they supported active government involvement in helping the poor and middle class from falling behind.

 There has long been a consensus in America that people are entitled to equality of opportunity, if not equality of income. We don't think government should provide everyone with an HD TV, but we agree that if you work hard, you should be able to achieve a good standard of living. The Pew poll's findings bear this out, with 79% supporting a government role for ensuring equal opportunity.

 This "rags to riches" idea is deeply embedded in the American narrative, and is a key part of what we believe about our national character and our economy. But the problem is that it's not true.

 Intergenerational mobility is actually distressingly low in the United States - lower than in France, Germany, Sweden, Canada, Finland, Norway and Denmark, all of whom are living the American dream better than we are.

 Certainly our  bears much of the blame, but equally culpable are the barriers to entry that disadvantaged people face in the job market.

 The rise in occupational licensing for an increasing number of trades like hair braiding and barbering, for example, needlessly prevents people with marketable skills from selling their services to paying customers.  Ex-convicts face many financial and administrative obstacles to employment in the licit economy.

 But one of the biggest barriers to entry may be geography.

 A recent paper by the Brookings Institution on transit and jobs found that while 62% of the Lehigh Valley's working-age residents live near a transit stop, only 27% of the region's jobs are reachable by transit in under 90 minutes. Transit-access is best in the core cities, but the Valley has mostly been adding jobs in the townships in recent years.

 Increasingly, to get to the jobs, you need to own a car. Car ownership is expensive in general, but it's prohibitively expensive for people who work in low-skill low-wage service jobs. Increasing economic mobility for low-skill low-income people depends, in part, on increasing their physical mobility.

 There are really just two ways to fix the job access problem: you can make transit go where the jobs are, or you can move the jobs to where the transit is.

 This is    I think it's a good idea for public policy to nudge businesses to cluster in the downtown cores. If the region starts adding most of its new jobs in the core cities instead of sprawling office parks over the next several years, that's the easiest way to get the access-to-jobs number up.

 But to do that, you need to increase density in the core business districts, adding building height to fit more people and businesses into a fixed plot of land. The more office workers and residents you can fit into the downtown cores, the more opportunities there will be for people to sell goods and services to their employees - which translates into more nearby service-sector job opportunities for low-skill workers.

It's true that the Valley's core cities are already pretty dense, but there's still a lot more that can be done to increase net density. Surface parking lots and empty lots can be filled in with taller buildings.

Commercial buildings and multi-family homes that get demolished can be replaced with taller ones over time. Cities could uncap height restrictions and tax just the first 4 floors of new buildings in the core business districts as an incentive for developers.

 Increased density would make public transportation a practical option for more people across a range of incomes, increasing fare revenues to LANTA that could be used to buy more buses, reduce wait times, and improve service frequency between the cities and the suburbs.  

 If we really take economic mobility seriously, we need to look at all the obstacles preventing people from reaching the bottom rungs of the career ladder, including development patterns.