A better approach to poverty.
President Obama’s State of the Union speech brimmed with ideas to increase upward mobility and spur job creation—most of which have been tried previously, without good results. From calling on Congress to raise the minimum wage to announcing the creation of six new “high-tech manufacturing hubs” centered around research universities, too many of these ideas flow from misplaced confidence in the ability of top-down government policy to steer the economy and lift the circumstances of those in poverty.
The same is true for another of the president’s initiatives: his newly unveiled “promise zones.” In designated areas with persistently high poverty rates, the president has pledged to offer more federal money, special attention, and streamlined regulations. Five communities have been targeted as the first zones with the possibility of up to 20 by the time Obama leaves office.
It’s an idea that some Republicans seem to like, and it recalls similar efforts launched by nearly every president of the past 50 years. And like those earlier efforts, it appears almost certain to fail. Whether it was Dwight Eisenhower’s “slum clearance,” Lyndon B. Johnson’s “model cities,” Ronald Reagan’s “enterprise zones,” or Bill Clinton’s “renewal communities,” the end result has nearly always been programs that most social scientists agree produced little net benefit. No matter how they are packaged, sold, or created and no matter who oversees them, what you might call “place-based relief” simply has not worked.
Successful cities and neighborhoods emerge from an interplay of cultural, human, and physical attributes that simply can’t be replicated by central planners. Neither the right’s approach of slashing taxes and regulation nor the left’s approach of creating a host of new social programs can remedy the fundamental causes of social ills. Even when such policies successfully foment change, the revitalization often displaces the poor individuals it was intended to help.
While some efforts to fix troubled areas—even those along the lines of the president’s promise zones—might be worth trying, we shouldn’t expect much of them. But one area where government has proven itself adept is in helping people to move. Public policy that aimed to help residents of shrinking, economically moribund communities with high rates of unemployment to relocate to growing, economically vibrant ones that face labor shortages would be far more productive.
Throughout most of American history, the down-and-out have proven remarkably willing to move in search of opportunity. In the mid-19th century, many easterners loaded wagons and headed west to establish homesteads. In the early 20th century, African Americans from the South fled bigotry and crop failures to make new lives in the industrial North.
While deep aspects of the national character may make Americans a footloose people, there’s little doubt that government policies often encouraged migration. President Abraham Lincoln’s 1862 Homestead Act (and amendments that modified the program through 1916) encouraged westward migration. Mandates on freight shippers that forced them to cross-subsidize railroad passenger tickets made it easier for northern factory owners to advance money to African Americans looking to come North. Even the Sunbelt’s growth resulted in no small measure from the development of the Interstate Highway System and flood control efforts that were paid for with federal tax dollars.
But current policies don’t promote mobility. In 2012, the U.S. Census Bureau found internal migration had hit its lowest levels since record keeping began in the 1940s. This decreased mobility hurts the country.
A wealth of research shows that people who move in search of work earn more money and find better opportunities. The Moving to Opportunity Program, championed by Jack Kemp and the Clinton administration, produced good results when it helped move people from lower-income to higher-income neighborhoods. A recent study from Harvard and the University of California, Berkeley, likewise finds certain cities allow for far more income mobility than others. Moving really can provide better opportunities than staying put.
Rather than continuing efforts at place-based relief, the federal government ought to do what it can to encourage people to move from places that lack opportunities to those that offer them in abundance.
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