How Mayors Can Grapple with Inequality

This week, in a speech many are calling the blueprint for the remainder of his term, President Obama advocated raising the minimum wage, establishing universal pre-school and reforming immigration laws—all in the name of reducing income inequality.

These proposals aren’t new, but with congressional action required, they are likely to continue to languish.

The question remains whether leaders closer to the issue and with more autonomy—America’s mayors—can address inequality of both income and opportunity.

In last Sunday’s New York Times Magazine, Adam Davidson argues that while incoming mayors like New York’s Bill de Blasio (see also: Ed Murray in Seattle and Marty Walsh in Boston) might have been elected on a platform around combating urban inequality, it’s folly to think they can do much about it.

Global economic forces coursing through Wall Street and local amenities like public transit, Davidson and some experts contend, combine such that New York and other similar cities will always have more than their share of rich and poor, and thus high levels of inequality. 

While true, that doesn’t mean that mayors must stand by and accept the status quo. There are three broad approaches for places with global appeal like New York, Washington, Boston, Seattle, and San Francisco to ensure they are accessible places of economic opportunity and upward mobility for all. 

Granted, there are headwinds. Jobs remain well below their prerecession levels and unemployment, particularly for the young and racial and ethnic minorities, remains high.

Wages and incomes for the typical American household have not grown over the past decade, middle-wage jobs have shrunk, and about one-third of the U.S. population now lives in families earning no more than twice the poverty level ($37,000 for a family of three). Overall, rates of upward mobility in the United States now rank below those in most other advanced economies.

Cities themselves also bear some of the blame for their high levels of inequality. Economic development plans focusing on retail and sports and convention palaces create low-paying jobs. Simultaneously ignoring housing policy creates supply problems, increasing prices (See San Francisco).

So what’s a global-city mayor to do? Mayor-elect de Blasio’s proposed expansion of preschool for New York’s children is certainly a worthy long-run investment likely to improve economic mobility. But challenges there and elsewhere are even more immediate. Mayors need a multi-layered strategy.

First, generate smarter economic opportunities. Mayors can bring business, education, and labor leaders together to prepare younger workers for good jobs in the sectors that drive their city economies.

Under Mayor Rahm Emanuel’s leadership, for instance, Chicago’s Plan for Economic Growth and Jobs identified strong local sectors critical to future growth, including advanced manufacturing, information technology, and transportation and logistics. Chicago then re-aligned each of its under-performing city colleges to prepare young people for careers in one of those key sectors, and engaged private industry to help design curricula and provide internships and apprenticeships.

Second, engage on wages. More and more states and cities, recognizing the long-term deterioration in the value of the federal minimum wage and its negative effects on families’ living conditions, are adopting their own higher minimum wages. Little evidence has yet to emerge of significant negative effects on local jobs, but the passage of a $15/hour minimum wage in the suburban Seattle community of SeaTac has begun to mobilize support for much larger local increases.

A more promising local strategy to boost wages is now taking place in the Washington, D.C. region, where the District of Columbia and its two largest neighboring Maryland counties are collaborating to adopt similar increases to their own minimum wages. This approach may reduce the threat of “border wars” that could disadvantage cities that try to go it alone on a significant minimum wage hike.

Third, build baby, build. Mayors must take on the anti-development forces that conspire (perhaps unwittingly) to make their cities unaffordable. In addition to updating antiquated zoning laws, city leaders can lower the cost of developing more affordable housing.

Seattle’s Multifamily Property Tax Exemption program, for instance, provides a 12-year property tax exemption for new affordable workforce housing in certain sections of the city. And while they focus on building more within their own borders, city mayors should also work with their counterparts throughout the wider metro housing market to achieve better balance between wages, housing prices, and transportation costs.

These are not small tasks. But mayors matter. In the end, the actions they take will help determine whether cities today can realize their true promise as sites of both economic diversity and economic mobility.