‘A Great Reckoning’: Boston Foundation releases 2009 Indicators Report detailing growing disparities

Boston—The United States exhibits far greater levels of income inequality today than any other rich, industrialized nation and the city of Boston posts higher levels of such disparities than the country as a whole, according to a report issued today by the Boston Foundation. Suffolk County, even more sharply divided than Boston, exhibits a pattern of economic polarization between rich and poor similar to the American Deep South.

“This sobering report maps a growing inequality that threatens our optimistic assumptions about the future,” said Paul S. Grogan, President and CEO of the Boston Foundation. “The American Dream, especially for urban families with children, is receding and the question posed by this report is this: Can we rise to the challenge to heal the growing divide? Can we reclaim our common heritage as a center of innovation that has impelled Boston forward over the past four centuries?”

The report, titled  A Great Reckoning: Healing a Growing Divide , is drawn from the Boston Indicators Project, a collaboration between the Boston Foundation and Greater Boston’s civic community. Co-sponsored by the City of Boston and the Metropolitan Area Planning Council, it brings together a wealth of information generated by the region’s public agencies, civic institutions, think tanks and community-based organizations. Through multiple convenings that include area stakeholders, the Indicators project frames its findings to shape a civic agenda. The content of the report and the data that shapes it is available on an ongoing basis through a dedicated website, as well as with a biennial report.

The disparities that are generating growing income inequality, polarizing rich and poor and fraying the economic middle, are to a great extent the product of the region’s very success in the new knowledge economy in recent years—an economy that rewards the winners and punishes the losers. Today’s report calls for focused and concerted action if trends are to be reversed to increase opportunity for the broader community.

“We have been willing to rewrite the rules in the past to expand access to the middle class, from land grant universities to the G.I. Bill,” said Grogan. “Now we have to find ways to bend the curve again, to push against these trends that threaten our future.”

Among key findings in today’s report: as a result of demographic changes that have slowed Massachusetts’ growth to a trickle, the very people needed to impel the region’s economy forward—poor urban youth—have  had their lives curtailed as a result of increased neighborhood violence, increased rates of chronic preventable diseases and limited access to healthy food.

These trends interact with important demographic trends that will have broader implications for the region and, ultimately, for the nation. Massachusetts struggles to hold on to young people, especially young people with good educations and job skills, who have become more mobile.  By 2020, almost half the young Massachusetts workforce will be comprised of people of color. This is a national trend in which Boston serves as a harbinger. Already, more than 75 percent of Boston youth are of color and half of the homes in the city that include a child, English is not the primary language spoken.

Yet despite achievements that have established Boston’s school system as among the best in the nation, progress in third grade reading success—a key early indicator of success in school—has been flat with persistent achievement gaps between white children and children of color.

At the same time, the numbers of people incarcerated has sharply and steadily increased. For the country as a whole, the number of people in prison has quintupled since 1980. Today, the United States ranks first in the world for the number of incarcerated people, and black men are incarcerated at six times the rate of white men. This is part of a broad pattern that commits significant investment to high-cost interventions late in the game in place of making investments earlier, when outcomes can be substantially affected.

A growing divide
Low-income residents continue to lose ground compared to their wealthier neighbors—in 2008, the wealthiest 5 percent of Boston residents claimed more than 24 percent of the local, aggregate income while the bottom quintile earned only 2.2 percent.  And the difference between rich and poor increasingly reflected racial and ethnic differences. While more than 40 percent of Boston’s white families had incomes greater than $100,000, fully 40 percent of the city’s families of color earned less than $25,000 a year.

Growing disparities in wealth are reflected in education achievement, the essential driver of skills that confer the promise of achievement and access to the American Dream. At a time when young, well-educated and skilled residents are leaving the area, young residents of color are suffering the disadvantages of a school system that all too often leads to failure and exclusion from opportunity. In one widely quoted statistic, for young people of color in the Boston school system in ninth grade, only 7.5 percent can expect to receive a two- or four-year degree, which remains the standard ticket to achieving a middle class prosperity and a place on a career ladder.

Among the findings that add up to dire projection if current trends continue are local trends that reflect the following national statistics:

• An American child in a household in the upper 20 percent of income is six times more likely to complete a college education than a child in the bottom 20 percent;
• The difference in lifetime earnings between a person with a high school diploma and a college degree is now estimated at more than $1 million; and
• The difference in net worth between the least and most wealthy 10 percent of US households was almost $700,000 in 2007, with the bottom six deciles—60percent of the population—in flat to negative territory.

Time of promise and loss
The report also tracks recent news worth celebrating in Boston across the 10 sectors included within the Indicators Project. Among the positive achievements is the new Rose Kennedy Greenway, which has transformed an ugly and divisive roadway into a graceful sequence of green spaces enriching neighborhoods from the North End to Chinatown. Also included are a new state-of-the art library in Mattapan; clean beaches providing a civic treasure  and reclaiming Boston Harbor, once the most polluted in the nation and today a popular recreational destination; and a newly refurbished and vibrant Strand Theater serving once again as a cultural jewel and gathering place for city residents.

But the defining findings of the report track the inexorable slide toward two worlds, separate and unequal.

Trends in health loom large in the report both because of the direct impact on the lives of area residents and because rising levels of ill health are reflected in soaring costs of health care, which are crowding out needed investments in a host of areas, including education, physical infrastructure and more environmentally effective housing. While the growth in the cost of health care has made possible job expansion in the health care sector during a time of economic crisis and high rates of unemployment, the beneficial aspect of this expansion if ultimately a negative trend because it burdens a region already known to be expensive for business with added costs.

Bending the curve
The Report calls for “bending the curve,” challenging directly trends that threaten to undermine the region’s economic competitiveness and growing inequity. This includes investment in job growth and technical innovation, as well as rebalancing spending on health. Currently, in Massachusetts, health care costs $63 billion a year compared to half a billion dollars for public health, although strategies in public health can have a significant impact on the wellbeing of area residents and their need for expensive interventions in the future.

Included in the Indicators Report is a civic agenda that tracks the signs of the kinds  of change required to bend the curve effectively. Gathered into four areas, the agenda sets as goals a Boston that possesses An Open, Dynamic Civic Culture; boasts 21st Century Jobs and Economic Strategies; provides its residents with World Class Human Resources; and 21st Century Infrastructure and Sustainability, as well.

The Boston Foundation
The Boston Foundation, Greater Boston’s community foundation, is one of the oldest and largest community foundations in the nation, with assets of $695 million.  In Fiscal Year 2009, the Foundation and its donors made $86 million in grants to nonprofit organizations and received gifts of over $72 million. The Foundation is made up of some 900 separate charitable funds established by donors either for the general benefit of the community or for special purposes.  The Boston Foundation also serves as a major civic leader, provider of information, convener, and sponsor of special initiatives designed to address the community’s and region’s most pressing challenges.  For more information about the Boston Foundation, visit www.tbf.org or call 617-338-1700.