Chetty's Charlotte: Hellhole North Carolina is suddenly better

Will the mainstream media ever wake up to the Harvard economist's significant (if boring) methodological shortcomings?

Graph in NYT announcing Chetty’s results in 2013

In 2013, Harvard economist Raj Chetty announced that he was in the process of cracking the code of America’s fundamental problem: How could America get back to being a Land of Opportunity for all?

All Chetty had to do was look through tens of millions of confidential 1040 tax returns from the last two generations and figure out in which geographic parts of America class mobility was highest — Where are children growing up to make more than their parents? — and then observe what they were doing right locally. Then everybody else in less enlightened areas could adopt their best practices.

In pursuance of this centrist vision, he talked government agencies into giving him anonymized versions of their confidential information, raised a huge amount of money from the centrist Gates and Zuckerberg foundations, signed up the New York Times to publicize his results (whatever they might turn out to be), and then discovered …

Well, nobody, especially Chetty, could seem to make much sense of his finding that the best places to be raised working class (based on how much money the second generation were making in 2011-2012 relative to what their parents were making in the 1990s) were places like the Dakotas and the worst were the Carolinas.

In particular, Chetty’s data from 2011-12 hated Charlotte, North Carolina, which ranked dead last among major metro areas in social/economic upward mobility since the 1990s.

What was Charlotte doing wrong? Was there something in the water?

Civic leaders in Charlotte were dumbfounded by Chetty’s discovery and vowed to Do Things. By 2017 they were Starting Programs.

Today, Chetty published a new paper extending his data collection up through 2019, and he’s now looking at 57 million people born from 1978 through 1992. (Chetty’s awesome databases do not have the usual social science problems with adequate sample sizes because he uses almost the entire universe.)

I’ll be looking over his data in depth, but one of his topline findings is that Charlotte has much improved in upward mobility since they first got the bad news from Chetty a decade ago. From Axios:

Exclusive: Charlotte no longer "50th out of 50" for economic mobility, new Chetty study shows

Alexandria Sands

We're not 50th out of 50 anymore.

Charlotte moved up a dozen spots to No. 38 among U.S. cities for upward mobility in a update, shared exclusively with Axios, to a national ranking that stunned and galvanized the city a decade ago.

Why it matters: Children born in Charlotte have increasing opportunities and a greater chance to rise out of poverty today than they did in previous generations, the research suggests.

Driving the news: Economist Raj Chetty and his Harvard research group Opportunity Insights will release the complete study on Thursday, local nonprofit Leading on Opportunity tells Axios.

The paper is titled "Changing Opportunity: Sociological Mechanisms Underlying Growing Class Gaps and Shrinking Race Gaps in Economic Mobility." It uses anonymized federal census data and tax returns to track people born in 1978 and 1992, and examines their income in adulthood at 27 years old.

The big picture: Charlotte actually made the third-most progress from the Gen X cohort to the Millennial cohort among the 50 metros in Chetty's research, per Leading on Opportunity.

Mecklenburg is the only county where low-income white children did not experience any decline in economic mobility.

The actual big story in Chetty’s data appears to be that, nationally, young white people’s incomes have gotten hammered in recent years, but, eh, who cares about them? (Seriously, I, at least, will follow up on that.)

Specifically, the report notes the difference between Charlotte and Atlanta. "Both had low levels of mobility for children born in 1978," the report says. "By 1992, mobility improved substantially in Charlotte. ... In contrast, mobility remained low in Atlanta for both groups."

Atlanta is the new No. 50. Raleigh was also lower on the list, at No. 41.

Flashback: When the "Land of Opportunity Study" dropped in 2014, it was a bombshell wake-up call for city leaders. The study tracked people born into poverty in the late 1970s and early 1980s, and examined their tax returns when they reached in their early 30s. It found that Charlotte kids in families with $27,000 annual incomes were, on average, earning less than their parents did — $26,300 — as adults.

In some circles, people were baffled and embarrassed that a city with considerable wealth would end up dead last on the list.

For others, the findings were an overdue acknowledgment.

The big picture: Civic and corporate leaders banded together over the coming years to pen solutions. Momentum picked up after the police killing of Keith Lamont Scott sparked protests in 2016.

Mecklenburg County committed to creating universal pre-K, and the city passed a series of $50 million bonds for affordable housing efforts. The private sector raised a matching $50 million for housing. This year, voters will be asked to agree to a $100 million housing bond for the first time.

Corporations based in Charlotte aligned their philanthropic giving with the strategies outlined in the local Opportunity Task Force report, published in 2017. Four years later, the Mayor's Racial Equity Initiative launched with a promise to raise $250 million to bridge the digital divide, enhance Johnson C. Smith, encourage more diverse workforces, and invest in underserved corridors.

"It's been incredibly inspiring to see what's transpired in Charlotte," Chetty told a crowd of Charlotteans in November.

Okay, but the point of Chetty’s research was that the children are our future.

Chetty’s goal was to discover local solutions for how to augment economic growth among children. But Chetty didn’t publish anything until the youngest people in his new study (those born in 1992) were age 21 in 2013, and Charlotte’s big initiatives came in 2017. Did those 2017 initiatives fix the long-term problems of Charlotte’s 25 year olds by the time they were 27 in 2019?

Really?

Why did Charlotte fare so poorly in Chetty’s previous study comparing Mecklenburg County’s 2nd generation incomes in 2011-2012 to its 1st generation incomes in the 1990s?