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