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SLC residents have best shot at going from rags to riches

Published August 5, 2013 1:58 pm

Study • Children here are the most likely to jump from lowest 20% of income into top 20%.
This is an archived article that was published on sltrib.com in 2013, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

Every day, armed with books and a student visa, Luz Robles traveled from her parents' home in Mexico to a private high school in San Diego. At 18, she enrolled at the University of Utah. Now 35, Robles is a Utah state senator and a vice president at Zions Bank.

Stirring as her story is, Robles' quick rise from anonymous immigrant and college student to businesswoman and influential minority-caucus manager in the Senate may not be as unusual as it seems. Salt Lake City, according to a new study of income mobility in the U.S., is a great place to try for the brass ring.

"It's a big city, but you can still make it. Try that in other big cities and it's more difficult," Robles said. "There's a cultural component to Utah. People tend to be really nice. You feel like you are at home, and [people] are young.

"A young population [with] young families, that makes it easier to integrate," she said.

Where you live matters, the study shows. Children from lower-income homes have a better chance of climbing the income ladder if they are raised in cities where the gap between rich and poor is moderate, families are intact, the quality of public education is reasonable and segregation of neighborhoods by race and economic status isn't overwhelming.

The study's authors, prominent economists at Harvard and the University of California at Berkeley, say their findings aren't proven fact. Nevertheless, they seem to be strong indicators of upward income mobility — especially in Salt Lake City. While Utah's capital is becoming more ethnically, religiously and economically diverse, the odds of a Salt Lake City child reaching the top 20 percent of U.S. incomes after starting in the bottom 20 percent are slightly better than one in 10. Long as those odds are, they are the best of the 50 biggest cities in the country.

"A child born to a family earning less than $25,000 in Salt Lake City has an 11.5 percent chance of earning more than $100,000 at age 45, odds which are roughly three times as large as other cities like Atlanta and Charlotte, [N.C.]" Nathan Hendren, a Harvard professor and one of the study's authors, said in an email.

Hendren chose two prosperous Southern cities as comparisons. He could just as easily have chosen New York, Chicago, Denver, Seattle or San Francisco. To one extent or another, each is a harder place to scramble out of poverty by dint of hard work. Salt Lake City, in contrast to many cities, is an island of opportunity with a rate of upward mobility that compares with the most mobile countries in the world, while cities such as Memphis and Atlanta have lower mobility rates than any developed country, according to the study.

The study's finding about Utah — it also singled out smaller cities such as Vernal, where the odds of reaching the top 20 percent of U.S. incomes are 27.3 percent); Logan (13.6 percent); and Price (14.8 percent) — seem to back up a study the Utah Foundation released three years ago. The study, which examined economic mobility among the state's residents, found there is a lot more ability to move between different levels in society than many people thought.

Laura Summers, a former research analyst at the foundation who is now an economist at Leavitt Partners, former Gov. Mike Leavitt's health care consulting firm, said the study showed Utah's economic mobility rested on decent K-12 education, access to affordable higher education, the comparative health of the population and a tradition of entrepreneurial business activity. (The foundation is expected to release an updated study soon.)

The Utah Foundation study didn't find that the struggle to climb the economic ladder would guarantee success, Summers said.

"One of the things that we did find was that the lower the person starts on the ladder, the harder it is to get to the top, and usually people are moving up only one or two quintiles (any of five equal groups that a population can be divided into)," she said.

"So maybe that rags-to-riches dream is not as common as people hope. At least that's what we found in our research," Summers said.

Pam Perlich, a research economist at the University of Utah's Bureau of Economic and Business Research, said the latest study is ground-breaking research. It's based on millions of anonymous earnings records that for the first time allow researchers to measure the upward mobility of children across more than 700 areas of the U.S.

"This is a tremendous piece of work ... it's hard to put a word to how significant it is," Perlich said.

The researchers studied what happened to children born in 1980 and 1981. If there is a weakness in the study, it is because in Utah many of those children, now in their early 30s, were born into largely white Mormon families established before the population of Salt Lake City became more ethnically diverse. Perlich said if the researchers were to replicate the study today they would find very different outcomes.

"That's certainly before the immigrants came to Utah, and so it's a different ball game now with all the linguistic and cultural and ethnic diversity," Perlich said, noting that while Salt Lake City's population grew almost 17 percent between 1990 and 2010, the increase was entirely due to an influx of minorities. During that time, the number of minorities in the city rose by 36,268 people, but the number of whites declined by 9,766. Today, more than one-third of Utah's capital is minority. Increasingly the white and non-white populations are gravitating to their own enclaves separated by Interstate 15.

"We have segregation along income lines developing here in Utah. We've got a more even distribution of incomes than other places [in the U.S.], but inequality is becoming worse here," Perlich said.

One reason Atlanta ranked at the bottom of the 50 biggest cities cited in the study for upward mobility was the lack of affordable transportation for its low-income residents. Although the city is home to corporate giants like Delta Air Lines, Coca-Cola and The Home Depot, crosstown travel is difficult. That makes it hard for poor people to find work outside their neighborhoods.

In Salt Lake City, Perlich said construction of the airport TRAX light rail line along West North Temple and the Sugar House street car line will help break down the isolation that many west side residents who don't own cars endure.

"We have had very difficult transit going east and west. If you look at medical facilities, dental facilities, where are the high schools, where are the grocery stores, so much of it is not [on the west side of the interstate]. So if a kid needs to go to a dentist, they've got to find a bus," Perlich said, adding: "a main reason poor kids miss school is because of dental problems."

Robles also said she thinks that Salt Lake City's changing demographic structure are altering the study's conclusion about the capital city.

"I'm not sure we are going to stay where we are in the ranking … So I'm more concerned about what's coming versus what we are seeing right now," she said.

Still, Perlich and Robles don't discount the message behind the study. They said it's important for local and state planners to figure out ways to maintain the older social factors that put Salt Lake City and Utah at the top of numerous lists of the best places to live and work.

"In order for us to continue to have that higher rating," Perlich said, "we need to continue to retool our institutions so that they are appropriate for this new reality, for these new populations, for this new global economy."

pbeebe@sltrib.com

Twitter: @sltribpaul —

A magnet of opportunity

Utah's capital is one of 15 cities The Daily Beast singled out last week as "aspirational" cities, where people can go to change their circumstances and improve their lives. Salt Lake City came in at No. 13.