Is Poverty a Mindset?

By Richard Rothstein, Senior Fellow at the NAACP Legal Defense and Educational Fund’s Thurgood Marshall Institute and author of The Color of Law: A Forgotten History of How our Government Segregated America

This week, New York Magazine and ProPublica published a scathing article by Alec MacGillis titled, “Is anyone home at HUD?”. Multiple sources — current and former, career, and political staff — described a U.S. Department of Housing and Urban Development in disarray, with severe lack of direction from a Secretary who has said he believes poverty is a mindset. Here, Richard Rothstein digs into the socio-economic conditions that lead to poverty for many low-income children, which policymakers like Secretary Carson would do well to consider.

Ben Carson, Secretary of Housing and Urban Development, told an interviewer recently that poverty results from “the wrong mindset:” low-income persons with strong motivation can escape poverty while those with negative attitudes remain poor.

His own life story seems to illustrate this. Poor children with ambition and self-discipline can occasionally climb the socioeconomic ladder. Luck figures, too, but a child must be on the lookout for it to benefit. Children expecting defeat may never seize opportunities within reach.

Yet as a scientist, Dr. Carson should realize that it’s always dangerous to jump from anecdotes about exceptional cases to generalizations about entire groups. Every human condition has variability. Only some children in Flint got lead poisoning, although all drank the same poisoned water. Even native intelligence is distributed: in any demographic group, some have above average I.Q.s, some are below it, and most are average, around 100.

Policymakers like Secretary Carson certainly should concern themselves with the welfare of all children: ensuring that those with less-than-average motivation, ability, or luck have a safety-net to keep from falling further, and those who are above-average in these respects have opportunities to flourish. But, rather than focus on the ineffable individual qualities that help some children overcome poverty on their own, government should be concerned, perhaps mostly concerned, with trying to remedy the socio-economic conditions that cause and perpetuate poverty for the typical low-income child.

If our nation did nothing to improve overall conditions but had strong mobility, we would expect that children born to poor parents would have roughly equally chances, as adults, to be either poor, middle class, or affluent — based on their ability, mindset, and luck. Yet our mobility is weak: of children born to poor parents (with incomes in the bottom fifth of all family incomes), almost half (43 percent) remain trapped in poverty as adults. Only 30 percent (those with better mindsets, luck, or ability) make it to the middle fifth or higher.

Low-income African Americans are stuck even more. Over half (53 percent) remain poor as adults; only a quarter (26 percent) make it to the middle fifth or higher.

Middle-class white children also have varied outcomes. Of those in the middle income fifth, one-third fall as adults into the poorest or next-poorest fifths. Middle-class children also have a range of mindsets, ability, and luck.

But children who grow up in poor neighborhoods face even greater impediments. For low-income black and white children who are similar in every observable respect (single parenthood, parent education level, etc.), the whites grow up to have higher adult incomes. About one-fourth of the difference results from black children being more frequently raised not only in poverty but in poor neighborhoods. If their families move from high- to low-poverty areas, low-income children typically will have higher adult incomes, be more likely to attend college and be less likely to become single parents. The concentration of poverty in so many African American neighborhoods seriously impedes black children’s life-chances and directly falls within Secretary Carson’s purview.

Black children are less upwardly mobile partly because of the multigenerational effects of government policies that purposely segregated their grandparents into low-income communities from which exit was difficult.

In the mid-twentieth century, the government subsidized builders to construct suburbs of single-family homes — Levittown east of New York City, Lakewood south of Los Angeles, and scores of similar developments between — on explicit federal condition that no homes be occupied by African Americans. Selling for less than $100,000 (in today’s currency), they were affordable to working-class families, black or white. Today, they sell for up to half a million dollars. Over several generations, federally subsidized white homebuyers gained a quarter million dollars in home equity or more. In contrast, the government restricted African Americans, including war veterans, mostly to segregated urban apartment rentals where no wealth appreciated.

White homeowners bequeathed some federally subsidized wealth to subsequent generations, after using it for retirements, children’s college education, care for elderly parents, or medical emergencies. African Americans had to use current income for such expenses, if they could do so at all, pushing many into poverty, even those with the best mindsets. Largely because of twentieth century federal segregation policy, while average African American income is about 60 percent of white income, African American wealth is only 7 percent of white wealth.

Other federal policies forced African Americans into poverty, continuing for generations. In 1935, the government gave construction and factory unions the right to bargain for higher wages and benefits. As proposed by Senator Robert Wagner, the law denied that right to unions that barred African Americans. Segregated unions lobbied to remove that provision and the Wagner Act was then passed, unconstitutionally empowering unions to exclude black workers — a policy that continued for over 30 years. Denied the best blue-collar employment, African Americans participated less in the income boom that raised white working class incomes in the three decades following World War II.

Today, many white families that benefited from postwar employment and housing booms suffer from de-industrialization and automation. For African Americans who remain isolated in urban neighborhoods where jobs are scarce and transportation to employment opportunities is lacking, the suffering is exacerbated.

Better mindsets can’t fix this legacy of unconstitutional race policy. But a Secretary of Housing and Urban Development concerned with neighborhood concentrations of poverty could do much. He could insist that federal rent subsidies (popularly known as “Section 8”) support low-income families’ moves to neighborhoods where jobs, transportation and other amenities are abundant. He could challenge suburban zoning ordinances that prohibit townhouses, apartments, even single family homes on small lot sizes. Such policies could help poor children succeed, with those having the best mindsets most able to take advantage.