The U.S. Census Bureau, in collaboration with Raj Chetty and Nathan Hendren from Harvard University and John Friedman from Brown University, released new research and a mapping interface that looks at children’s outcomes in adulthood. The Opportunity Atlas estimates children’s earnings distributions, incarceration rates, and other outcomes in adulthood by parental income, race and gender for every census tract in the United States. Users can view data, overlay their own data points of interest, and export into a data set for analysis.
…. The resulting news stories deserve our attention, but it is important to keep a vital question in mind: Does the CPS give us an accurate picture of household incomes?
In many recent years, the answer has been “No.” Compared to the national income and product accounts (NIPA) produced by the Bureau of Economic Analysis (BEA), the CPS often gives us a strikingly different picture of the recent trend in household income. ….
From the press release:
About nine percent of working families with children under the age of six are pushed out of the middle class as a result of their child care expenses, according to new research released by the Carsey School of Public Policy at the University of New Hampshire.
The researchers also found that many middle-class families do not pay any out-of-pocket child care expenses, perhaps by relying on family and friends, or by turning to lower-cost, less-qualified care. If all middle-class working families with young children were to pay what typical upper-middle and middle-class families pay for child care, roughly $6,900 per year on average, an additional 21 percent would be pushed below the middle-class threshold….
Source: Prosperity Now Scorecard, 2018
The Prosperity Now Scorecard is a comprehensive resource featuring data on family financial health and policy recommendations to help put all U.S. households on a path to prosperity. The Scorecard equips advocates, policymakers and practitioners with national, state, and local data to jump-start a conversation about solutions and policies that put households on stronger financial footing across five issue areas: Financial Assets & Income, Businesses & Jobs, Homeownership & Housing, Health Care and Education.
The Scorecard assesses all states on their relative ability to provide opportunities for residents to build and retain financial stability and wealth. The state outcome rankings are a measure of financial prosperity and how that prosperity is shared and safeguarded. The Scorecard ranks the 50 states and the District of Columbia on 62 outcome measures in the five Issue Areas. Data for an additional four measures are published, but states are not ranked on these measures due to insufficient data at the state level. The overall state outcome rank is determined by the rankings each state receives for outcome measures within each issue area. The issue area grades in the Scorecard are distributed on a curve, based on how each state fares compared with all other states.
The Scorecard also separately assesses states on the strength of 53 policies to expand economic opportunity. Taken together, these 53 policies provide a comprehensive view of what states can do to help residents build and protect wealth in the issue areas described above. Unlike the outcome measures, the strength of states’ policies are assessed based on fixed criteria arrived at through consultation with issue experts and Prosperity Now’s own knowledge of policies that are promising, proven or effective in helping families build and protect financial stability and wealth.
In addition to the outcome and policy measures used to assess states, the Scorecard provides additional data to understand financial stability and prosperity in states and communities. For 44 outcome measures, trend data are available for states to track progress over time. The Scorecard also allows you to drill down to the local level—city, county, Congressional district, tribal area and metro area—on up to 26 measures. Additionally, for 21 outcome measures at the state level and 11 at the local level, the Scorecard includes outcome measure estimates disaggregated by race and ethnicity. The Scorecard also disaggregates 14 outcome measures at the state level by disability status, providing for the first time in 2018 a glimpse into the financial challenges facing people with disabilities. While these additional data do not factor into a state’s overall performance in the Scorecard, we provide the data to allow for a more meaningful analysis of financial security and stability in the United States.
From the press release:
…. The Out of Reach report shows the Housing Wage for every state, metropolitan area, and county in the country. The Housing Wage is the hourly wage a full-time worker must earn to afford a modest rental home without spending more than 30% of his or her income on housing costs. The report compares the Housing Wage to average renter wages and minimum wages, as well as wages in the fast-growing occupations, nationally. The report also shows how many hours an individual must work each week for all 52 weeks per year at the prevailing minimum wage to afford a modest one- and two-bedroom apartment at the Fair Market Rent. Out of Reach 2018 also provides Housing Wages for ZIP codes in metropolitan areas. ….
Affluence—not willpower—seems to be what’s behind some kids’ capacity to delay gratification. ….
…. Ultimately, the new study finds limited support for the idea that being able to delay gratification leads to better outcomes. Instead, it suggests that the capacity to hold out for a second marshmallow is shaped in large part by a child’s social and economic background—and, in turn, that that background, not the ability to delay gratification, is what’s behind kids’ long-term success. ….
…. This new paper found that among kids whose mothers had a college degree, those who waited for a second marshmallow did no better in the long run—in terms of standardized test scores and mothers’ reports of their children’s behavior—than those who dug right in. Similarly, among kids whose mothers did not have college degrees, those who waited did no better than those who gave in to temptation, once other factors like household income and the child’s home environment at age 3 (evaluated according to a standard research measure that notes, for instance, the number of books that researchers observed in the home and how responsive mothers were to their children in the researchers’ presence) were taken into account. For those kids, self-control alone couldn’t overcome economic and social disadvantages.
The failed replication of the marshmallow test does more than just debunk the earlier notion; it suggests other possible explanations for why poorer kids would be less motivated to wait for that second marshmallow. For them, daily life holds fewer guarantees: There might be food in the pantry today, but there might not be tomorrow, so there is a risk that comes with waiting. And even if their parents promise to buy more of a certain food, sometimes that promise gets broken out of financial necessity. ….
Revisiting the Marshmallow Test: A Conceptual Replication Investigating Links Between Early Delay of Gratification and Later Outcomes
Source: Tyler W. Watts, Greg J. Duncan, Haonan Quan, Psychological Science, Online First, May 25, 2018
From the abstract:
We replicated and extended Shoda, Mischel, and Peake’s (1990) famous marshmallow study, which showed strong bivariate correlations between a child’s ability to delay gratification just before entering school and both adolescent achievement and socioemotional behaviors. Concentrating on children whose mothers had not completed college, we found that an additional minute waited at age 4 predicted a gain of approximately one tenth of a standard deviation in achievement at age 15. But this bivariate correlation was only half the size of those reported in the original studies and was reduced by two thirds in the presence of controls for family background, early cognitive ability, and the home environment. Most of the variation in adolescent achievement came from being able to wait at least 20 s. Associations between delay time and measures of behavioral outcomes at age 15 were much smaller and rarely statistically significant.
Source: United Way, 2018
The United Way ALICE Project provides a framework, language, and tools to measure and understand the struggles of the growing number of households in our communities that do not earn enough to afford basic necessities, a population called ALICE (Asset Limited, Income Constrained, Employed).
Scroll down to view the percent of households in each state – and county – that lived below the ALICE Threshold in 2016. The ALICE Threshold is the bare-minimum economic survival level that is based on the local cost of living in each area.
Hover over the U.S. map below to view state data, click on any state to see a county-by-county analysis of financial instability, and scroll further to compare all states.
Source: Andrew Aurand, Dan Emmanuel, Diane Yentel, Ellen Errico, Marjorie Pang, National Low Income Housing Coalition, March 2018
About the Gap Report
Each year, the National Low Income Housing Coalition (NLIHC) measures the availability of rental housing affordable to extremely low income households and other income groups. Based on the American Community Survey Public Use Microdata Sample (ACS PUMS), The Gap presents data on the affordable housing supply and housing cost burdens at the national, state, and metropolitan levels. This year’s report also examines the demographics, disability and work status, and other characteristics of extremely low income households most impacted by the national shortage of affordable and available rental housing.
Who are the Lowest Income Renters?
Of the 43.8 million renter households in the U.S., 11.2 million (more than one-quarter) have extremely low incomes at or below the poverty level or 30% of the area median income (AMI), whichever is higher. Extremely low income renters are more likely to be elderly or disabled or to have children than other renters. Nearly half (46%) of extremely low income renter households are elderly or disabled. Black and Hispanic renter households are more likely to be extremely low income than white renters. Thirty-five percent of the 8.5 million non-Hispanic black renter households and 29% of the 8.4 million Hispanic renter households are extremely low-income. In comparison, 21% of the 23.2 million non-Hispanic white renter households are extremely low income…..
Source: Michael McCormack and Jeff Madrick, The Century Foundation, October 16, 2017
From the summary:
America has deliberately chosen to be a low-wage society since the 1970s. This status was not thrust upon it inevitably by technological change or globalization, but instead was the result of deliberate policy choices made over the years. America likewise has the ability to reverse course, pursuing a policy agenda that would put it back on the path toward a high-wage economy. ….
…. This report provides an overview of the current state of the U.S. economy, characterized by a sluggish recovery, stagnant living standards, inequality, increasingly volatile and uncertain incomes, especially for low-income Americans, persistent poverty, and declining benefits. Our review below of the economic data and literature will demonstrate the persistence of reduced opportunity and a low-wage America for millions since the 1970s.
The report also explores the deliberate policy choices that led to the low-wage economy that developed in the late 1970s and was solidified by the 1980s and 1990s. There was only a brief reprieve during the full-employment economy of the late 1990s, when wage growth lifted wages for all income levels; even during this time, anti-inflationary monetary policy reduced the bargaining power of workers relative to capital.
After reviewing the political and academic influences that created a low-wage America, the report proposes alternative policy choices to build a high-wage America that extends prosperity to a broader range of workers. The three main pillars of a high-wage economy identified in this report—public investment and industrial policy, education and training, and labor standards and social supports—will guide the Rediscovering Government Initiative’s research and event agendas in the coming months, as it seeks to build an agenda that can return American workers to prosperity…..
What You Should Know
The high-wage agenda requires new approaches to directly confront underemployment and unemployment that may include government acting as an employer of last resort and support for labor organizing, which is now actively thwarted.
New data from the U.S. Census Bureau show that in 2016, the median U.S. household earned $59,039, a 3.2 percent increase from the previous year. Seven years after the end of the Great Recession, the median household’s income has approximately recovered to its pre-recession level, when adjusted for inflation, but has effectively remained stagnant since the late 1990s.
Middle-class households are not seeing the high levels of income growth that are being enjoyed by America’s highest-income earners. Furthermore, the share of income that is earned by the middle 60 percent of households, by income, has fallen to record lows. A revitalized union movement could help reverse the decades-long trend of growing inequality and a shrinking middle class. But anti-union attacks at the state and national levels threaten to further tilt our nation’s economy against workers…..