As the dust settles and we all try to find our feet in a world where president Trump is commander in chief of one of the largest democracies on earth, many of us perhaps wonder a bit about what's going on.
In April (2016) the Economic Innovation Group (EIG) in Washington DC launched a new metric, the Distressed Communities index. link to report. This metric lets you see how well-being varies within a city or district, a level of organisation that is reality for those who live there, but which is often masked by aggregated statistics.
They argue that: "Place matters. This simple concept has never been better understood than it is today. The American Dream is predicated on the idea that anyone from any place or background can climb to the highest rungs of the economic ladder. But there is a growing body of evidence that the more time an individual spends living in a distressed community—especially at childhood—the worse that individual’s lifetime chances of achieving economic stability or success. And not all poor neighborhoods are alike; some offer vastly better chances of economic mobility than others. The United States is still a land of opportunity for many. But when it comes to life outcomes, geography is too often destiny. "
With this new metric they suggest that large cities such as New York that have huge income inequality may not actually have as much community level economic inequality as might be expected, while other cities with more equal incomes may show big differences in economic well-being between zip-codes. What is important with this metric is not mapping the situation on the ground per se, but understanding what barriers exist for social mobility, ie. how possible it is for someone to take themselves out of a situation of endemic and inherited poverty.
In the 2016 US election both candidates based their economic promises on standard aggregated measures of economic progress, such as the GDP. These measures often mask what has become an increasingly unequal economic situation on the ground: To better understand what motivates voters, it is necessary to get a handle on their daily reality.
One of the key aspects of unhappiness has always been what someone has compared to what their neighbor has - this is linked to an individual''s perceived status or rank within a community. Weber’s law is a rule that shows that poor people benefit proportionally much more from an increase in income than rich people. This is often why discussions of minimum or protected wage, benefits, and job stability are hugely important issues, also when the change is in pence rather than hundreds of pounds. However while discussions of benefits and aid are critical they are unlikely to be the stuff to capture voters' romantic dreams of success and status- which social mobility encased in a model of capitalism (work hard and prosper) does provide.
It is difficult sometimes to understand why voters choose a path that leads away from what seems to be better benefits and aid to embrace individualism and opportunism- which go necessarily go hand in hand with leaving some less fortunate souls by the wayside. To understand this we need to remember that community spirit flourishes where individuals have a social status that is at least equal to others within their communities. Where many individuals have a lower social status than others , their community spirit is sapped and individualism takes over.
And Trump, the king of capitalism, does promote a vision where upward social mobility is very much possible- and that perhaps won him poor people's votes. For that reason he may also have more in common with Obama, who forged his own way across innumerable racial barriers and relatively modest beginnings- than either likes to admit.
DETAILS: A quick look at the 2016 distressed communities index
Authors: Economic Innovation Group
Data come predominately from the US census bureau
The index is comprised of seven key indicators which are all ranked equally, but then weighted by population at the different geographical levels.
The seven variables:
1. NO HIGH SCHOOL DEGREE
2. HOUSING VACANCY RATE
3. ADULTS NOT WORKING
4. POVERTY RATE
5. MEDIAN INCOME RATIO
6. CHANGE IN EMPLOYMENT
7. CHANGE IN BUSINESS ESTABLISHMENTS
It only captures those zip codes that have more than 500 inhabitants- but that covers over 99% of the US population. Inequality is then only calculated where there are at least 5 zip codes and over 100,000 people.
Three levels of organisation are used: zip codes, states and cities.
The data are robust, legitimate and credible; the indicators are given equal rank which avoids subjectivity, the data are made available as interactive dashboards at www.eig.org/dci
This index could be replicated elsewhere across e.g. Europe and might contribute to useful insights for e.g transition towns and sustainable municipality initiatives also in other countries.
What is missing from the variables is perhaps something that captures the socio- demographic of the area- perhaps including how long people have been there (proportion born there). the index makes a big thing of social mobility, but does not capture this.
Changes in definitions especially in terms of businesses may lead to loss of comparability between years. Census data is typically collected every decade so the usefulness of this indicator may be in analysing very long term trends- bearing in mind the likelihood of definition changes over these long time periods which may render such comparisons misleading..
Some key findings:
The most prosperous zip codes are the most populous, but 50.4 million Americans still live in distressed communities. Over half of the country’s distressed population lives in the South