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Economic Growth for All

Questions? Thoughts? Please contact us at egfa@newtonma.gov with your insights, or to join our semi-annual email list. Please consider taking our Economic Growth for All survey!

Income equality is the issue of our time. The City of Newton, committed to ensuring that all of its residents can be part of the middle class, has developed the Economic Growth for All initiative. While income inequality is a national issue, it is also a local issue. This is an issue of people in our community wanting to sustain themselves and their families and struggling to do so. And as such, the City of Newton is developing local policies and strategies to address it.

The first key question is what precisely does it cost to live in the City of Newton? Here’s what we learned– it is between 11% - 19% more expensive to live in Newton than in neighboring city and towns in Middlesex County (of which Newton is a part).  According to MIT’s Living Wage Calculator, a single parent raising two children in Middlesex County needs to earn $64,691 annually to make ends meet. With the help of Boston College professor Geoffrey Sanzenbacher, we worked to overlay Newton specific cost of living data points on to the MIT formula in order to develop a City cost of living index (Making Ends Meet in Newton) . According to our new calculations, this same family with a single parent and two children needs to earn at least $72,874 in order to afford to live in Newton – that is over $8,000 more annually than in neighboring communities.

Knowing what it costs to make ends meet in Newton offers the basis for developing approaches to both support residents in self-sufficiency planning and for policy makers to work on promoting affordability and access in the City. This cost of living index answers the question; if one wants to live in Newton, to enjoy the community benefits of good schools, excellent public safety, and close knit, vibrant community centers, what will one need to earn to be able to do so? This is a vital question for many, including; young adults beginning to map out their career trajectories, for individuals looking to relocate to a new community, for retirees (or those planning for retirement) wanting to successfully maintain themselves in their hometowns – and for policy makers and community stakeholders to inform planning and advocacy.

As with many large scale social issues, income inequality and lack of economic mobility can feel insurmountable. Rising to the challenge, Newton’s Mayor Setti Warren decided to develop a city-wide blueprint to promote economic mobility in Newton over the long term. The Mayor’s Economic Growth for All initiative is designed to develop strategic interventions, supports, and infrastructure that promote on-ramps to the economy for everyone, with a particular focus on low income and vulnerable populations who are currently experiencing the losing side of income inequality. In a partnership recently developed with Boston College (BC), Newton and BC will together lead a coalition made up nonprofit leaders, business leaders, academics for many institutions, and government officials to move forward and tackle the question of economic mobility and how it can be expanded to those for whom it has traditionally been out of reach.

Why Newton?

 Newton, MA (population 88,000) is a suburb of Boston, with a median household income of $118,639 (2014), which is more than the twice the national median household income of $53,482 (2014). So at first glance it may seem that Newton is an unlikely candidate for an economic mobility initiative. Yet, contrary to stereotype, Newton has a significant number of residents who experience financial hardship. Consider the following:

These data points are a sampling to illustrate that there is real need and hardship in Newton. But traditional measures of poverty underestimate the financial challenges of being able to support a family in a high-cost community like Newton. Newton specific cost of living data are also critical information for policy makers and government officials. Research has already established that place matters – that raising a child in a high opportunity zip code can positively impact their future outcomes. Newton is a high opportunity zone. But how can it become one that people of diverse incomes can better access? And how can we consciously work to cultivate strong community relationships that embrace diversity and recognize the ways in which the city is richer for it?

Newton provides a striking location to tackle these questions in part because the income inequality question is exemplified so dramatically here. While already establishing that there is financial hardship in Newton, one must also recognize that the stereotype of affluence is based in some real experiences as well.Consider this comparison of Newton and Watertown's resident incomes:

Nearly 1/3 of all Newton households earn over $200,000 annually and nearly 40% of Newton families earn $200,000 or more annually (Source: American Community Survey, 2014). Consider Newton’s next door neighbor of Watertown where 10% of households and 13% of families earn over $200,000 annually. Watertown’s percentage of very low income residents is only a little higher than Newton’s but there are many more residents earning moderate incomes, making the gulf between the very high incomes and the very low incomes less stark. Whereas Newton has far more people at the top of the income scale and very few people in the middle. When people talk in this country about the “hollowing out of the middle class,” Newton provides an interesting case study.

Benchmarks for Success

The coalition work is based on evidence based life span benchmarks which, when achieved by an individual, greatly increase their likelihood of making it to the middle class and maintaining that status. The first six benchmarks were developed by the Brookings Institution and are referred to as the Social Genome Model (GSM). GSM maps the life cycle into six stages with a set of outcomes determined by Brookings to be predictive of later economic success. The benchmarks for older adults were developed by the City of Newton with Boston College’s Center on Retirement Research and the benchmarks for the innovation economy are based on Brookings Metropolitan Policy Program research.

Life Span Benchmarks:

  • Family Formation
    • Born at a normal birth weight to a non-poor, non-single mother aged at least 20
  • Early Childhood
    • Acceptable pre-reading and math skills
    • Behavior generally school appropriate
  • Middle Childhood
    • Basic reading and math skills
    • Social-emotional skills
  • Adolescence
    • Graduates from high school with a GPA >2.5
    • No criminal convictions, not a parent
  • Transition to Adulthood
    • Lives independently
    • Receives a college degree or has family income >250% of the poverty level
  • Adulthood
    • Reaches middle class (family income at least 300% of the poverty level)
  • Older Adults
    • Assets to ensure retirement income is at least 70% of pre-retirement income
    • Social networks/community engagement effectively supporting well-being
  • Innovation Economy
    • Business friendly climate for entrepreneurs
    • Regional partnerships
    • Access to transportation
    • Diverse housing stock

For more information on the Brookings Institution research that the first 6 benchmarks areas are based on, please read the following documents:

Pathways to the Middle Class: Balancing Personal and Public Responsibilities

Pathways to the Middle Class: Powerpoint Presentation by Isabel V. Sawhill

The Social Genome Project

The Rise of Innovation Districts: A New Geography of Innovation in America

The Rise of Innovation Districts: A Presentation by Bruce Katz

The Anne T. and Robert M. Bass Initiative on Innovation and Placemaking

Economic Growth for All has developed a coalition of academics, government officials, businesses, and nonprofit leaders. The coalition is divided into four working groups, spanning all eight benchmarks for success. Please click on any of the working groups for a description of them and links to relevant documents and partner websites.

They are as follows:

  • Self-Sufficiency Income Working Group
  • Health and Well-Being Working Group
  • Education Cabinet
  • Innovation Economy Working Group

 

  • Self-Sufficiency Income – targets areas relevant to adolescent financial literacy and career planning, early career experience and exploration, adult workforce development, overcoming barriers to work, retirement income planning and support, and promoting business development and policies that promote family-sustaining jobs. This working group is starting with a focus on promoting economic security for vulnerable residents including low income families and seniors.
    • Health and Well-Being - focuses on healthcare access, preventative healthcare and chronic illness management, prenatal care, substance abuse prevention and treatment, promoting social networks across the lifespan, crime prevention, and healthy relationships. This group is starting with a focus on mental health, suicide prevention and substance use disorders as well as working to reduce social isolation among older adults.
      • Newton CARES, which works to support mental health and prevent suicide.
      • Newton PATH, the city’s opioid response group promoting prevention, awareness, treatment, and hope.
      • Became a designated an AARP Age Friendly community which is an indicator of the extensive work Newton has done and continues to evolve to be a great city for all ages to live, engage and thrive.
      • Developed Making Connections: Ways to Engage as We Age in Newton, an event and resource guide designed to help older adults create new and/or stronger connections in the community and reduce social isolation.

         

    • Education Cabinet – focuses on early and middle childhood pre-reading and math benchmarks, successful high school completion, college graduation or postsecondary job training, and lifelong learning. This group is starting with a focus on using out of school time to enhance career exploration, social/emotional development, healthy choices, and academic support.
      • Mayor’s Summer High School Internship Program, which promotes real-world career experience and workshop-based skill building with an emphasis on providing opportunities for those most in need (connected to both Education and Self-Sufficiency income working groups).
      • Mayor’s Summer Reading Challenge, which promotes academic success and helps reduce the summer skills slide in students.
      • Preschool Access Research, which is being conducted (Summer/Fall 2016) to assess community needs to ensure kindergarten readiness for all our students, commissioned by the City of Newton.
      • Chosen pilot city for Harvard’s Education Redesign Lab – By All Means initiative, led by former Massachusetts Secretary of Education Paul Reville. Building pilot program on out-of-school time designed to encourage career/interest exploration and include positive social/emotional development through peer relationships, mentoring relationships, and confidence and skill building.
      • Participating in Boston College’s Interconnect ED initiative aimed at developing an infrastructure to integrate education with social services, youth development, and physical and mental health resources for Massachusetts children and families.

         

    • Innovation Economy – encompasses benchmarks relevant to promoting a business friendly climate for entrepreneurs, building regional partnerships, expanding access to transportation, and diversifying housing in Newton. This work is the driving force behind not only promoting economic innovation and entrepreneurship in the community but also ensuring that there is access for those who have traditionally been left behind by this part of the economy.
      • The Warren administration facilitated the satellite office of Mass Challenge opening in Newton Corner to encourage entrepreneurship locally with an emphasis on providing access to those traditionally left out of the startup economy.
      • Mayor Warren initiated and then partnered with the Newton-Needham Regional Chamber of Commerce to implement the N2 Corridor – a public-private initiative designed to promote the area as a destination for technology companies, start- ups, and other innovators.
      • Mayor Warren initiated and supports the development of the Charles River Mill District, a regional partnership to collaborate and advocate for infrastructure and regional transit improvements and on the overall marketing and promotion of the district.
      • The City of Newton commissioned the Comprehensive Transportation Study (to be released in Fall 2016) designed to outline positive investments in transportation to support physical access to work and resources for all.
      • The City of Newton commissioned the Housing Strategy research to promote housing opportunities for diverse needs, including housing that encourages the inclusion of the millennial workforce and our public servants such as teachers and public safety officers.
      • Mayor Warren designed an innovative energy program, the Mayor’s Community Share program, in which publicly-owned solar panels will be used to provide energy credits to low-income residents.

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