Bostons BoomingBut for Whom? Building Shared Prosperity in a Time - PowerPoint PPT Presentation

Boston’s Booming…But for Whom? Building Shared Prosperity in a Time of Growth #sharedprosperity Wednesday, October 10, 2018 8:30-10:30 a.m.

Key Indicators of Boston’s Economic Boom

Our state economy is growing. And it’s become more productive than the US overall. Output per worker, adjusted for hours (Gross State Product/adjusted total employment) $140,000 Massachusetts United States $120,000 $100,000 $80,000 $60,000 7 0 3 6 9 2 5 8 1 4 7 0 3 6 7 8 8 8 8 9 9 9 0 0 0 1 1 1 9 9 9 9 9 9 9 9 0 0 0 0 0 0 1 1 1 1 1 1 1 1 2 2 2 2 2 2

Unemployment is low. Unemployment rate, seasonally adjusted. Bureau of Labor Statistics 11.0% 10.0% 9.0% 8.0% 7.0% 6.0% 5.0% United States, 3.9% 4.0% Massachusetts, 3.6% 3.0% Boston-Camb-Newton (NECTA), 3.1% 2.0% 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 4

Our state workforce has the highest share of college degrees. Share of workforce with a college degree or more, 2016 MA, 44.7% 45% 40% U.S., 33.1% 35% 30% 25% 20% 15% 10% 5% 0% WA KS U.S. WI FL WY LA WV MA NJ MD CT VA CO NY RI NH IL VT MN CA PA DE ME HI OR GA NE NC MT ND MI MO OH TX SD IA UT SC TN AZ AK IN AL OK NM ID KY AR MS NV Source: Boston Indicators analysis of American Community Survey data.

Median income in Massachusetts is near top of the nation. Median household income, 2017 $80,000 MA, $73,227 $70,000 US, $61,372 $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 $- WY WV WA HI MA AK MN VA RI OR IL VT IA WI PA NY DE US AZ ID OH NE TX MT IN KS GA SD MO NV TN OK SC FL ME KY AL AR NM LA MS MD NH CO NJ CT UT CA ND MI NC

Local home values have skyrocketed, especially in Boston. Zillow Home Value Index, median values $600,000 After the Great Recession, City of Boston home values in Boston shot up faster than elsewhere. $500,000 Greater Boston $400,000 Massachusetts $300,000 United States $200,000 $100,000 $- 6 7 8 9 0 2 3 4 5 6 7 9 0 1 2 3 4 6 7 9 9 9 9 0 0 0 0 0 0 0 0 1 1 1 1 1 1 1 - - - - - - - - - - - - - - - - - - - n n n r g t c b r g t c b r g t c b r c c c p u u e e p u u e e p u u e e p O O O A A D F A A D F A A D F A J J J

Boston’s Middle Class Is Hollowing Out.

In 2018, can middle class renters realistically afford to live in Boston? Here’s the math… Median monthly rent: $2,613 Median annual rent: $31,356 Median household income: $61,267 At the median, rent costs 51% of income. Annual income needed for rent to be “affordable”: $104,520

In almost all neighborhoods, households earning median income cannot “afford” median rent.

Boston’s middle class is hollowing out. Change in # of households by household income buckets, Boston, 1990-2014 50,000 43,202 40,000 30,073 30,000 20,000 10,000 0 -10,000 -15,172 -20,000 Low-Income Middle-Income High-Income Source: Boston Indicators analysis of American Community Survey-PUMS data. “2014” data is from 2012-2016 ACS 5-year estimates

The state projects middle-income jobs to grow more slowly. Boston Workforce Development Area. Projected change 2014 to 2024. Net new jobs, percent Net new jobs, total 12% 20,000 18,000 10% 16,000 14,000 8% 12,000 6% 10,000 8,000 4% 6,000 4,000 2% 2,000 0% - Low Income Middle Income High Income Low Income Middle Income High Income Source: Boston Indicators analysis of projections from the Executive Office of Labor and Workforce Development

Income Inequality Is Up.

Our state economy Except for recent increases, median continues to grow. income has been relatively flat since 2000. Massachusetts. Output per worker, adjusted for hours worked Median household income, Massachusetts, adjusted for inflation (2017 $) (Gross State Product/adjusted total employment) $80,000 $140,000 $75,000 $120,000 $70,000 $65,000 $100,000 $66,737 $60,000 $80,000 $55,000 $60,000 $50,000 1977 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 0 0 0 0 0 0 0 0 0 0 1 1 1 1 1 1 1 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2

Economic growth in Massachusetts has not been broadly shared. Inflation-adjusted wages for workers at different points in the income distribution. Massachusetts. 1979 vs 2017 Source: Boston Indicators analysis of Current Population Survey data.

Income varies widely by race in Boston and Metro Boston. Median household income. 2016. $90,000 $80,000 $70,000 $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 $0 Asian Black Hispanic Native American Some other race Two or more races White City of Boston Metro Boston Source: Boston Indicators analysis of Current Population Survey data.

Poverty Persists.

Poverty is lower in Massachusetts, but remains elevated post-Great Recession. Percent of households below the official federal poverty threshold 18% 16% 14% U.S. , 13.4% 12.4% 12% 10% 9.3% Massachusetts, 10.5% Official 8% period of Great Recession 6% 0 5 6 7 8 9 0 1 2 3 4 5 6 7 0 0 0 0 0 0 1 1 1 1 1 1 1 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2 2 2 2 2 2 2 2 2 2 2 2 2 2 Source: Boston Indicators analysis of American Community Survey data. No comparable data between 2000-2005.

But by a more accurate poverty measure, which factors in cost of living, Massachusetts is in the middle of the pack. Supplemental Poverty Measure, 2015-2017 20% 15% MA, 13.1% 10% 5% 0% FL LA AZ GA HI VA TX WV AR AL KY IL OR IN AK OK PA DE OH WA WY VT RI KS ID WI IA CA MS NY NM NJ NC SC NV MD TN MA CT MI MO CO ND SD ME MT NE UT NH MN Source: Boston Indicators analysis of US Census Bureau data

Wealth Disparities Are Growing.

We have a large, persistent racial wealth gap in the US. Median family wealth by race/ethnicity, 1963-2016 $250,000 $200,000 White, $171,000 $150,000 $100,000 $50,000 Hispanic, $20,920 All People of Color, $13,324 $- Black, $17,409 3 3 9 2 5 8 1 4 7 0 3 6 6 8 8 9 9 9 0 0 0 1 1 1 9 9 9 9 9 9 0 0 0 0 0 0 1 1 1 1 1 1 2 2 2 2 2 2 Sources: Urban Institute calculations from Survey of Financial Characteristics of Consumers 1962 (December 31), Survey of Changes in Family Finances 1963, and Survey of Consumer Finances 1983–2016. 2016 dollars. No comparable data are available between 1963 and 1983. Black/Hispanic distinction within non-White population available only in 1983 and later. Asian and Native American not reported due to sample size constraints.

White Bostonians own homes at higher rates, even when controlling for income. Greater Boston. Homeownership rates for working age households. 2014. Middle-Income Households Low-Income Households (80-120% of median income) (below 50% of median income) 70% 70% 68% 60% 60% 50% 50% 51% 45% 40% 40% 41% 36% 30% 30% 25% 20% 20% 10% 10% 12% 7% 0% 0% White Black Asian Hispanic or White Black Asian Hispanic or Latino Latino Source: UMass Donahue Institute/Boston Indicators analysis of American Community Survey-PUMS data. 2012-2016 5-year ACS data. “Working age” is defined as 25-64 year old heads of household.

Economic Mobility is down.

Economic mobility has declined in Massachusetts. Share of people earning more than their parents by age 30, by birth year. Massachusetts Someone born in 1940 100% had a 91% 91% chance of 90% out-earning their parents. 80% 70% Someone born in 1980 had a 60% 55% 55% chance of out-earning 50% their parents. 40% 1940 1950 1960 1970 1980 Source: Chetty, R., et al. The Fading American Dream: Trends in Absolute Income Mobility Since 1940

Within the context of declining economic mobility nationwide, Boston ranks high relative to other U.S. cities. Average income percentile for adults raised in low-income households as kids (the 25th percentile). Rank among 100 largest commuting zones. T op 10 Bottom 10 45.6 34.81 1 San Francisco, CA 90 Roanoke Rapids, NC 2 Minneapolis, MN 44.9 92 Wilson, NC 34.32 44.9 34.32 2 Boston, MA 92 Macon, GA 44.3 34.32 4 Pittsburgh, PA 92 Montgomery, AL 44.1 33.99 5 New York, NY 95 Columbus, GA 44.1 33.99 5 Newark, NJ 95 Fayetteville, NC 7 Seattle, WA 43.9 33.44 97 Clarksdale, MS 8 Los Angeles, CA 43.0 97 Albany, GA 33.44 9 Washington DC 42.8 99 Greenville, MS 28.98 10 Sacramento, CA 42.7 99 Memphis, TN 28.98 Source: Boston Indicators analysis of back-end data provided by Chetty, Hendren, Jones and Porter, from “Race and Economic Opportunity in the United States: An Intergenerational Perspective.” Rank is among 100 largest CZ’s by size of Black population.