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The Limits of Rhetoric

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The Limits of Rhetoric

Noble-sounding words won’t improve failing cities, especially for minority residents. November 2, 2020
Cities
Economy, finance, and budgets
The Social Order

Deep-blue cities and states are eager to declare their social-justice credentials. New York mayor Bill de Blasio has set up a commission designed to uproot the city’s “institutional” racism, while California governor Gavin Newsom brags that his state is “the envy of the world” and will not abandon its poor. “Unlike the Washington plutocracy,” he proclaims, “California isn’t satisfied serving a powerful few on one side of the velvet rope. The California Dream is for all.”

Yet California, though well known for its wealth, also has the nation’s highest poverty rate, adjusted for housing cost. If rhetoric were magic, metropolitan areas like New York, San Francisco, Los Angeles, and Chicago would be ideal places for aspirational minority residents. But according to statistics compiled by demographer Wendell Cox in a newly released report, these cities are far worse for nonwhites in terms of income, housing affordability, and education. New York and California also exhibit some of the highest levels of inequality in the United States, with poor outcomes for blacks and Hispanics, who, population-growth patterns suggest, are increasingly moving away from deep-blue metros to less stridently progressive ones.

The current focus on “systemic racism”—often devolving into symbolic actions like mandatory minority representation on corporate boards, hiring quotas, and an educational focus on racial redress and resentment—is not likely to improve conditions for most minorities. “If a man doesn’t have a job or an income, he has neither life nor liberty nor the possibility for the pursuit of happiness,” Martin Luther King said. “He merely exists.” That remains true. Our lodestar should be upward mobility: improving how well people live, across the board. When it comes to that criterion, blue states and cities are falling short.

The Covid-19 pandemic has inflicted disproportionate harm to the health of Latinos and African-Americans, who, according to the CDC, have suffered rates of infections and deaths higher than the overall population, which makes a focus on upward mobility even more important. To measure progress, we have developed an Upward Mobility Index, with “opportunity ratings” for the nation’s 107 largest metropolitan areas—those with populations of 500,000 or more in 2018—by race and ethnicity. We examined the factors that underpin upward mobility and entry into the middle class. Then, we created a ranking by metro that combined these factors for the three largest ethnic and racial minorities: African-Americans, Latinos, and Asians.

The results confound assertions that nominally progressive policies—affirmative action, programs for racial redress, strict labor and environmental laws—help nonwhites. It turns out that places with low housing costs, friendly business conditions, and reasonable tax rates do much better than cities proclaiming their woke credentials.

African-Americans do best by these measurements in southern metros such as Atlanta, the traditional capital of black America; McAllen, El Paso, and Austin, Texas; and Raleigh, Virginia Beach/ Norfolk, and Richmond, Virginia. The Washington, D.C. metro area, well known for its large, middle-class African-American suburbs, also compares well. Oklahoma City, Phoenix, Lancaster, Pennsylvania, and (perhaps surprisingly) Provo, Utah rank high for black success.

At the bottom of the list, California dominates, with four of the worst ten locations, including Los Angeles, which a half-century ago was widely seen as a mecca of sorts for blacks. Two of the state’s most prominent political leaders of the late twentieth century—¬four-term Los Angeles mayor Tom Bradley and long-time assembly speaker and San Francisco mayor Willie Brown—came from poor Texas families, not Golden State metros.¬ Other cities traditionally attractive to African-Americans no longer serve as leading places for black ambition, including Miami and New York.

Similar, though somewhat varied, results can be seen for Latinos, now the nation’s largest minority, and Asians, the fastest-growing. Latinos seem to be doing best outside the Northeast Corridor and the West. Fayetteville (Arkansas/Missouri), for example, ranks number 7; it’s an evolving economic hub paced by Walmart, JB Hunt, and Tyson Foods. Latinos have found opportunities in metros tied to basic goods as well as technological production (St. Louis); logistics and agribusiness (Kansas City, Des Moines, and Omaha); energy (Pittsburgh and Oklahoma City); and manufacturing (Grand Rapids and Akron).

In contrast, California, with the nation’s largest Hispanic population, now includes eight of the bottom 15 metros on the Hispanic Upward Mobility Index. The nation’s largest Hispanic conurbation, Los Angeles, ranked 105th out of the 107 largest U.S. metros. The remaining six worst performers, apart from Honolulu, are on the much-deindustrialized east coast, including New York, Bridgeport-Stamford, and Worcester.

Overall, Asians enjoy incomes 43 percent higher than the U.S. average, and 29 percent higher than white non-Hispanics, according to newly released American Community Survey 2019 data. But they, too, are finding better opportunities, in terms of housing and income, in places previously not associated with earlier waves of Asian immigrants, such as Atlanta, St. Louis, Kansas City, Fayetteville, and Cincinnati. At the bottom of the Asian Upward Mobility Index ratings, six are in California, home of the nation’s largest Asian population, paced by Los Angeles at number 105. Honolulu, the nation’s most Asian metro, does even worse, at 107.

Perhaps no issue influences upward mobility more than housing prices. Since World War II, homeownership has defined middle- and working-class aspirations. High home prices tend to keep minorities, particularly blacks and Latinos, from achieving this critical component of the middle-class dream. Without homes of their own, disadvantaged minorities will face formidable challenges to boosting their wealth. Property remains key to financial security: homes today account for roughly two-thirds of the wealth of middle-income Americans. Homeowners’ median net worth is more than 40 times that of renters, according to the Census Bureau. At the same time, high rents make any economic progress difficult for those with lower-wage jobs.

The impact of blue state policies on housing costs is particularly harmful. The three least affordable U.S. metros for blacks are San Jose, San Francisco, and Los Angeles. Honolulu is fourth; others include San Diego, Denver, Seattle, and Portland. In contrast, the South and Midwest are best for housing affordability. The inability of African-Americans to buy homes in key markets puts them at a disadvantage in accumulating wealth. Black families’ median household net wealth has declined to just one-tenth that of white families, the widest disparity in at least 40 years. The regulatory environment that contributes to this inequality is rarely cited by those decrying systemic racism.

The differences between regions are enormous. Black homeownership in larger metropolitan areas exceeds 50 percent in Birmingham and in the Washington, D.C. area. The top 12 metros with black homeownership exceeding 50 percent are all in the South. In contrast, only about one-third of African-Americans own homes in Los Angeles, Boston, or New York. Among large metros, Atlanta and Oklahoma City rank highest in housing affordability for blacks; for Hispanics, the leaders are Youngstown, McAllen, Pittsburgh, and Toledo, where house prices are exceptionally low. Pittsburgh, Akron, and St. Louis also rank well. The least affordable housing markets for Hispanics, like those for blacks, include the four large California metros, Honolulu, and Boston. Asians also follow this pattern, finding better affordability in the South and Midwest, while homeownership is much lower in traditional Asian hubs such as New York, Los Angeles, San Francisco, and Honolulu.

What stands in the way of black or Latino aspirations is not race discrimination but, in part, policies that drive up housing costs, which account for 88 percent of the variation in cost of living between areas. The median house price in San Jose has risen to nearly 400 percent above the national average, according to the National Association of Realtors. It is hard to imagine public policies more disadvantageous to aspirational Americans of any ethnic or racial group.

African-Americans and Latinos have not shared much in the renaissance of urban areas, often built around tech and finance but not as promising in creating middle-skilled upwardly mobile jobs in other sectors. “Real” median incomes (that is, adjusted for cost of living) for African-Americans are highest in McAllen, El Paso, and Modesto. The lowest African-American incomes are in Youngstown, Milwaukee, Spokane, Providence, and Hartford. Among the larger metropolitan areas, such as Washington and Atlanta, cost-adjusted black median incomes are more than $60,000, compared with just $36,000 in San Francisco and $37,000 in Los Angeles.

Among Latinos, the highest cost-adjusted incomes are in Virginia Beach, Baltimore, and Columbus. The traditional melting pots, Los Angeles and New York, rank near the bottom 20 in Latino household income per capita. The median income for Latinos in Virginia Beach-Norfolk is $69,000—compared with $43,000 in Los Angeles, $47,000 in San Francisco and $40,000 in New York. Asians enjoy the highest incomes, in Raleigh, Jackson, and Fayetteville, at $115,000 or more. Los Angeles, with the nation’s largest Asian population, ranks in the bottom ten, with a cost-adjusted income of $60,000.

Politicians often claim to speak for minorities, but people reveal what they want by “voting with their feet.” Over the past two decades, the black household population has declined in San Francisco, Oxnard, Los Angeles, and New Orleans. Growth has been modest in Chicago, New York, San Jose, and Buffalo. In San Francisco proper (not its metro area), the African-American population share has declined from one in seven in 1970 to barely one in 20 today. Blacks are now so marginal that one filmmaker even made a movie called The Last Black Man In San Francisco.

African-American populations are growing, though, in metros like Salt Lake City, Phoenix, Las Vegas, and Minneapolis-St. Paul, which have seen an increase in black households of 100 percent or more since 2000. In trends that began even before Covid, small metros have added black households at high rates. For example, the black population in both Boise and Fayetteville increased more than 200 percent, while in Provo, Portland (Maine), and Scranton, it grew by at least 150 percent.

Latinos, approximately two-thirds of whom are foreign-born, and Asians, nearly 60 percent foreign-born, are now settling in regions that were, until recently, immigrant backwaters. Among Latinos, Scranton, near the fringe of the New York metro area, leads by a huge margin; its Latino population was negligible in 2000. Otherwise, the top metros for Latino growth are clustered overwhelmingly in the South: Knoxville, Charleston, Fayetteville, and Cape Coral. Bigger metros with large gains include Louisville, Charlotte, and Nashville.

In contrast, the lowest Latino growth is taking place mostly in coastal metropolitan areas: Los Angeles, San Jose, San Francisco, New York, Oxnard, and Miami. Chicago and Detroit also rank in the bottom ten. Asians, the fastest-growing minority, have expanded into such unlikely places as Cape Coral (Florida), Madison, Fayetteville, Scranton, Greensboro, and Indianapolis. In contrast, growth has been muted in such traditional centers as Honolulu (which ranked last), Los Angeles, San Francisco, and New York.

“One of the great mistakes is to judge policies and programs by their intentions rather than their results,” economist Milton Friedman said. Whatever their professed concerns for low-income and ethnic minorities, progressive cities and their mayors fail to deliver palpable progress. Initiatives like defunding the police, affirmative action, and implementing guaranteed basic income have largely failed and in some cases have made things worse.

In contrast, more conservative areas have produced more opportunity and general well-being for the minority population. Those who govern places like New York, Los Angeles, and Chicago need to learn that solutions to America’s ethnic and racial disparities will not be found in intensified resentment, civil unrest, or further regulation that constrains the economy. Instead, broad-based economic growth appears to be the prerequisite to greater opportunity. Places with the best tax climates and the best overall business climates fare best.

The pandemic, which has seen many metros in the Heartland, the South, and Intermountain West recover more quickly than those in locked-down New York, Los Angeles, San Francisco, and Chicago, could either accelerate these trends or provide a wake-up call. These blue cities must liberalize their land-use regulations to reduce rents and make house prices affordable to average-income families. And these cities certainly need a renewed focus on crime and disorder, which threaten to drive a growing exodus.

Instead of addressing “systemic racism,” these cities should instead embrace the Gospel admonition: “Physician, heal thyself.” It starts by focusing not on rhetoric but on what works—job creation, broad-based business growth, increased housing affordability, and improving dysfunctional education systems.

For now, Americans are finding their own solutions—often by moving away from locales that have stopped addressing these issues. Our commitment should be to spread more advantageous conditions to all metropolitan areas, not only to Boise and Nashville but also to New York and Los Angeles, improving quality of life for working- and middle-class Americans wherever they live.

Photo by Mario Tama/Getty Images

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