Forbes Recognition of Dubuque Copyright 2014
City of Dubuque Consent Items # 4.
ITEM TITLE: Forbes Recognition of Dubuque
SUMMARY: City Manager transmitting an article from Forbes.com
recognizing Dubuque as one of the "Best Cities to Climb
the Economic Ladder."
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Forbes Article-Best Cities to Climb the Economic Supporting Documentation
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http://vvvvw.forbes.com/sites/ohnwasi k/2016/02/05/the-best-cities-to-climb-the-
eco n o m is-I ad d er/#58d 5534a50fd
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The Best Cities To Climb The Economic Ladder
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John Wasik
CONTRIBUTOR
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now.
With a slowing global economy becoming a painful reality, it's
harder than ever to climb the economic ladder. Yet where you live
makes a big difference.
Such is the finding of a robust body of research led by Harvard
and Stanford economist Raj Chetty, who may be to economics
what Facebook's FB +0.05% Mark Zuckerberg is to social media. As the
public face of the "Equality of Opportunity Project," which asks
some fundamental questions about economic inequality, he and
his team have done some groundbreaking research.
Whenever the question of inequality comes up, most policymakers
are flummoxed. Why do some people prosper while others
flounder and seem doomed to be struggling to stay in the middle
class? Why do some Americans get mired in student debt and not
move ahead while others get a great education and climb the
economic ladder?
The answers are beginning to emerge, thanks to Chetty's team.
While Chetty's "Equality" presentation looks at some causes of
inequality, it's not a complete suite of solutions, although some
great ideas are proposed (more on that later). After seeing Chetty
speak at the Chicago Humanities Festival recently, I was converted
to his worldview that big data can give us some insights into this
universal problem.
Analyzing millions of tax and income records from throughout the
U.S., Chetty's team found that where you live had a great impact
on how well you did in economic terms. They looked at how likely
a child was likely to go from the bottom rung to the top tier of the
income ladder in most American cities. While this piece of
research doesn't exactly tell you why you had a better shot at
success in certain places, it led to some important inferences.
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Certain cities present greater economic opportunities because
they have robust business climates — they offer jobs and favor
entrepreneurs. They also have decent public education and solid
foundations for families. What does that mean? The combination
of two-parent families, decent public schools, job growth and a
healthy economic climate swing the odds in your favor that you
can rise above the lowest economic level of American life.
So here's the short list of upwardly mobile cities:
Dubuque, Iowa.
San Jose, California.
Washington, DC
How do these cities compare to the largest American cities? The
U.S. average for people getting ahead (from bottom to top of the
income scale) is 7.5%. In Dubuque or San Jose, the range is 18%
to 13%, according to Chetty. Down the scale, Chicago is 6.5% and
Memphis is 2.6%. Near the bottom is Atlanta and Baltimore. In
relative terms, your odds of success are nearly triple in Dubuque
vs. Chicago and nearly eight times better in the Iowa town than
Memphis.
Although we don't yet know for sure, we know in a general way
that San Jose is more innovative than Memphis, mostly due to its
proximity to Silicon Valley. The Northern California mecca
attracts lots of brilliant, creative and innovative people who want
to make money and create jobs. It's also a diverse mix of people
from all over the world. They want to go places, do things and get
rich in the process. Many of them do quite well. It's part of the
culture.
Memphis, where the Mississippi Delta region begins, is doing its
best to rise above the slump of one of the poorest regions in the
country. Like a lot of older cities, it wants to attract new
businesses and entrepreneurs. It would love to have a Stanford
University nearby and point to a place like Silicon Valley, where
innovation seems to be in the water.
Policymakers would do well to duplicate what's happening in
places like Salt Lake City,Utah; Snohomish County, Washington;
Bucks County, Penn.; and Fairfax County, Virginia; which also
were at the top of Chetty's list? Of course, if you had a young
family — and were thinking of moving — these would be good
places to go to find the right climate for your childrens' economic
success.
But the story of economic mobility doesn't stop at where you live.
It has to do with what communities are doing to succeed in a
holistic way. Here's what most of these areas had in common:
1) A high amount of diversity/low amount of segregation.
The most segregated cities (Atlanta, Chicago, Baltimore, et al),
had the lowest amount of economic mobility. High-paying jobs
need to be where lower/middle-income people can afford to live.
Chetty and his team found that the most sprawling cities such as
Atlanta isolated those who needed to make more money from
where they needed to go to find better-paying jobs.
That's why cities like Boston and San Francisco, which are
relatively compact, may offer more opportunities. Although
income inequality can be quite divergent in compact cities, the
odds of being closer to a decent-paying job — or people that hold
them — are much better in the less-sprawling areas.
2) Family Structure
This is usually a slam-dunk in socio-economic research. Families
with single parents generally don't do as well as two-parent
households. Children from those families have a much tougher
time ascending the economic ladder because their parents are
often struggling and can't support them.
Places where there are two-parent/married households add a
degree of financial stability. "There something about this kind of
community that contributes to a child's success," notes Chetty.
3) Social Capital is Important
This may one of the most-difficult things to measure, although it
plays a key part in which makes a community successful. Social
capital is about civic engagement where the local culture
promotes people engaged in bolstering the community. Chetty
cites the classic study "Bowling Alone" by Harvard sociologist
Robert Putnam, who discovered that the strongest communities
had a large number of organizations involved in social
engagement (like bowling).
Successful communities not only have good schools, they have
parents who want to make them even better. They have good
governance, non-profit activity and care about creating decent-
paying jobs (the San Francisco Bay Area is in the forefront in
creating a " living" wage). They build libraries, parks and want to
green their cities by making them more energy efficient.
If you want to see social capital at work, go to Dubuque, Iowa. It's
nowhere near an ocean or major population center, but it's the
San Francisco of the Midwest, not only because of its hilly terrain
(yes, in Iowa), but it's progress in creating a technology-based
jobs culture and livable city. Most people have an average 15-
minute commute and the city has won numerous awards for its civic
engagement. It's also much more affordable than Boston, San
Jose or Seattle.
How do you roll all of these factors into one gauge of economic
success? I'm not sure that anyone has done it yet, although
Chetty's team has come close. I would put education at the top of
the list. How many people in an area have college or graduate
degrees? How is the job growth or unemployment relative to the
state or country? How do the high schools rate? How many new
businesses are being created? How long does the average person
spend commuting? How well are teachers paid (hint: better, well-
compensated teachers make a difference)?
While's there no single scale that measures all of this, you may
have to compile all of this on your own, especially if you have a
choice on relocating. What you're looking for is a culture of
compassionate capitalism, one that lifts all boats. Without it, few
get ahead and far too many fall behind.
John Wasik is the author of"The Debt-Free Degree, " "Keynes's Way to
Wealth"and 13 other books. He writes and speaks about money across
the globe. Follow him on Twitter and Facebook.