Why It’s So Hard to Get Ahead in the South

CHARLOTTE—Shamelle Jackson moved here from Philadelphia, hoping to find work opportunities and better schools for her four children, who range in age from two to 14. Instead, she found a city with expensive housing, few good jobs, and schools that can vary dramatically in quality. “I’ve never struggled as hard as I do here in Charlotte,” Jackson, 34, told me.

Jackson isn’t alone. Data suggests that Charlotte is a dead-end for people trying to escape poverty. That’s especially startling because the city is a leader in economic development in the South. Bank of America is headquartered here, and over the last two decades the city has become a hub for the financial services industry. In recent years, Charlotte and the surrounding area, Mecklenburg County, have ranked among the fastest-growing regions of the country. “Charlotte is a place of economic wonder in some ways, but it’s also a city that faces very stark disparities, and that increasingly includes worrisome pockets of real deprivation,” said Gene Nichol, a professor at the UNC School of Law who has completed an extensive report on local poverty. Some of these disparities bubbled to the surface in September, when protests erupted after a black man, Keith Lamont Scott, was shot and killed by police.

Charlotte ranked dead last in an analysis of economic mobility in America’s 50 largest cities by the Equality of Opportunity Project, a team of researchers out of Harvard, Stanford and Berkeley led by Stanford’s Raj Chetty. Children born into the bottom 20 percent of the income distribution in Charlotte had just a 4.4 percent chance of making it to the top 20 percent of the income distribution. That’s compared to a 12.9 percent chance for children in San Jose, California, and 10.8 percent change for children in Salt Lake City. These statistics are troubling because mobility is essentially just a formal term for the American Dream—the ability to find a good job, provide for children, and do better than one’s parents did. Rather than making it into the middle class in Charlotte, poor children, who are majority black and Latino, are very likely to stay poor.

In some ways, Charlotte is indicative of a more widespread problem in the region. Map out the data from the Equality of Opportunity Project and you’ll find that much of the South has low mobility rates. The chance of a child moving from the bottom to top quartile in Atlanta is 4.5 percent, the chance of moving up in Raleigh is 5 percent, and the chance of moving up in New Orleans is 5.1 percent. These are among the lowest odds of advancement in the country. “The South really does struggle,” said Erin Currier, who directed the financial security and mobility project at the Pew Charitable Trusts. Pew found that mobility lags in states including Louisiana, South Carolina, Alabama, and North Carolina.

There’s no obvious reason why cities in the South would perform so poorly across the board. After all, economies like those in Charlotte are booming. In other places with significant economic growth, such as San Jose, this prosperity seems to be widely shared (or at least it was between 1980 and 2012, the time period over which children were tracked in Chetty’s data). In cities across the South though, economic success seems not to have trickled down to lower-income populations.

Chetty and colleagues say that there are a few key factors that play into where people struggle with economic mobility. These areas tend to be more racially segregated, have a higher share of poverty than the national average, more income inequality, a higher share of single mothers, and lower degrees of social capital, which means people interacting with others who can help them succeed, according to Nick Flamang, a predoctoral fellow with the Equality of Opportunity Project.

All of these indicators are present in Charlotte, and throughout much of the South. Segregation took root in the early 1900s, and was reinforced by Jim Crow laws and redlining in the later part of the century. It remains a problem today. The white, affluent population lives in a wedge south of the city. The census tracts north and west of the city are where the low-income people live, and those people are predominantly black and Latino.

The South also has among the highest poverty rates in the country. Mississippi ranks last, Louisiana is 49th, and North Carolina is 39th in the country when it comes to the percentage of people living below the poverty line. While Southern poverty has traditionally manifested itself in rural areas, cities are now home to some of the worst poverty in the region, according to Nichol. “If you look at census tracts, the deepest poverty in North Carolina is right in the middle of Charlotte, the middle of Greensboro, middle of Winston-Salem, the middle of Raleigh,” he said.

Indeed, concentrated poverty is becoming a pressing problem in Charlotte. The Brookings Institution data shows that in 2000, just 2 percent of poor families lived in a census tract with poverty rates of 40 percent or higher in Charlotte. That percentage had climbed to 10 percent by 2012. According to Nichol’s work, 17 census tracts in Mecklenburg County had poverty rates higher than 40 percent, a dramatic increase from 2000, when just four did. I visited neighborhoods like Lockwood, just north of downtown, where homeless people hung out at the gas stations and the small box homes had bars on their windows.

Concentrated poverty is related to another factor Chetty and his colleagues mention: social capital, which is essentially the mechanism that allows people to interact with others and become a part of broad networks that can lead to opportunity. It can help people get hooked up to first jobs, internships, and scholarships. Without these types of connections, children are more likely to take a similar path to their parents. For those who live in areas of concentrated poverty, this means they don’t learn about opportunities that might get them out of poverty, or about people in different income brackets.

Latasha Hunt, 36, is an example of what it means to lack social capital. She grew up in northern Charlotte, far from the wealth of the city’s south side. Her parents did ok, she told me—her mother worked in manufacturing and her father worked for the school system. But growing up, she didn’t know people who went to college or who worked in finance. Almost no one at her high school went to college—they all ended up getting a job right out of high school, or going to jail, she told me. Neither Hunt nor her two brothers went to college. Her brothers are both barbers, she now works in customer service at a local nonprofit. She doesn’t think she’s better off than her parents were.“My generation is struggling,” she told me. “We work every day, but it’s like we’re working just to pay for daycare.”

Hunt is a single mother, which creates its own unique challenges. She juggles taking care of her two children and working a full-time job. Many other women in Charlotte experience similar issues; in North Carolina, 65 percent of African-American children live in single parent families, according to the Kids Count Data Center from the Annie E. Casey Foundation. Jackson, who moved from Philadelphia, told me she lost her job in Charlotte because of “single mom stuff.” She was frequently tardy to work because she had to drop kids off at school or pick them up when they were sick, attend parent-teacher conferences, and otherwise take care of her family.

Latasha Hunt grew up in an era when the schools were more integrated than they are now in Charlotte—which should have lead to easier mobility by helping with issues of social capital and quality education. A 1971 ruling in a Supreme Court case, Swann v. Charlotte-Mecklenburg Board of Education, essentially required Charlotte to integrate its schools. The district’s model proved so successful that other cities copied it. Yet the school integration may not have helped mobility that much, according to Jeff Michael, the director of the UNC Charlotte Urban Institute. If students are getting on buses right after school and going back to their segregated neighborhoods, they may not get enough exposure to people from other backgrounds. And the schools have returned to being extremely segregated, after a 1999 court ruling forced Charlotte to abandon its busing plan.

According to Nichol, 77 percent of black students attend majority-poverty schools, while only 23 percent of white students do. The best-performing schools are located in the wedge of wealth in the southern part of the city, while the worst-performing schools are located in high-poverty census tracts. Hunt, determined to make sure her daughter went to a better school than the one in their neighborhood, entered her daughter in a lottery and arranged for her to go on three separate public buses to get to a better school. “The school system is very racially segregated, housing is racially segregated,” Gene Nichol told me. “When you put that big stew together, it’s hard for people born in economically challenging circumstances to work their way out of them in Charlotte.”

Of course, some of the reasons the South is lagging behind when it comes to economic mobility have to do with very specific policy choices made by state governments. Southern states have low minimum wages, so many poor people make less than they do in other regions, and have less money to spend on creating opportunities for their children. Paltry wages negate any potential benefit that might be derived from lower housing costs or number of open positions. According to the Bureau of Labor Statistics, the average hourly earnings of workers in the leisure and hospitality field, which is where many low-wage workers are concentrated, is $20 in New York, and just $13 in North Carolina. (The minimum wage in North Carolina is $7.25 an hour.) Southern states also generally spend less on education than other states do. While states like New York, New Jersey, and Massachusetts spend $15,000 per student on elementary and secondary education, North Carolina spends almost half that, at $8,500 per student, and other states such as Tennessee and Mississippi spend around the same, according to Governing magazine. Research also suggests that tax policy is especially regressive in the South, meaning the tax burden falls the hardest on low-income families.

The low wages have meant that even as the South grows and cities like Charlotte boom, people are left out. Hunt’s mother could earn a decent wage in manufacturing without a college education; now someone without a college degree is stuck struggling in a low-wage job. And disinvestment in education has made it more difficult for people from all backgrounds to make it past high school. “We had an economic philosophy in the South, in the Jim Crow era and beyond, that we would lead with cheap labor, cheap land, and low taxes,” said David Dodson, the president of MDC, a nonprofit research group that produces assessments of the South. “And this is what you get.”

Charlotte is well aware of its mobility problems. Shortly after the Chetty data emerged, it convened an Economic Opportunity Task Force and sought to come up with recommendations for how Charlotte can be more inclusive. Its report, released at the end of March, concluded that segregation and a lack of social networks had a widespread influence on whether someone made it out of poverty, and that three determinants had a big influence: early care and education, college and career readiness, and child and family stability.

The report recommended “systemic and structural change” and included ideas such as addressing school segregation in order to make sure that all children in Mecklenburg County had access to early childhood education. It recommended making it easier for students to navigate college and other career pathways, encouraging the formation of two-parent families, and addressing the community’s affordable housing crisis. Many of the recommendations don’t have clear policy answers, and Charlotte seems slow to make any changes. When presenting the task force report, leaders announced the creation of yet another task force that will decide how to proceed.

Nichol says the biggest problem in Charlotte is that city leaders are happy to try and tackle the problem of economic mobility, but that they are not as interested in addressing the real problem, which is poverty. “There's a greater reluctance to engage in programs which fight poverty in the South than in the rest of the country,” Nichol told me.

This, Nichol says, has largely to do with race. People in the South view poverty as a “problem that black people have,” and don’t support programs to fight poverty because those programs are targeted at black people, he said. Research backs this up. As I’ve written before, efforts to cut back welfare and other programs for the poor arose once black people were able to get on those programs—there was widespread support for them when they had been majority white. And states that had the largest share of black people on welfare programs adopted some of the most stringent policies in the wake of welfare reform of 1996.

While Charlotte grapples with issues of stunted mobility, North Carolina is rolling back benefits for the poor. It eliminated its state Earned Income Tax Credit in 2014, cut unemployment benefits to a maximum of 14 weeks (the lowest in the nation), and made it more difficult for poor people to get food stamps. Benefits for families on Temporary Assistance for Needy Families are among the lowest in the nation, at just $272 a month. “The link between poverty and race is very strong in the South and in North Carolina,” Nichol said. “The willingness to ignore it, and regard it as a broad-ranging public challenge, is closely tied with ideas of race.”

Charlotte has an unenviable task ahead of it, then, as it tries to tackle its mobility challenges. It is a blue city in a red state that seems uninterested in programs that support the poor. Charlotte has acknowledged that its poorest citizens struggle to make their way up the economic ladder, which is an important first step. But the next step may require some difficult discussions about poverty, segregation, and race.