Richmond Fed president: Education key to improving economic mobility in Charlotte

Richmond Fed president: Education key to improving economic mobility in Charlotte
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Fed watchers normally turn to Tom Barkin, the president of the Federal Reserve Bank of Richmond, for insight on big-picture issues like inflation and interest rates.

On Wednesday at a discussion with the Charlotte Regional Business Alliance, Barkin honed in on Charlotte’s economy. And then honed in even more on how to make it more equitable.

  • “What’s really the big thing that creates economic mobility? I think it all comes back to education,” Barkin said.
  • The Richmond Fed monitors banks and economic conditions in the district that includes Charlotte.

Why it matters: You’ve probably heard by now that Charlotte ranks 50/50 in economic mobility among large U.S. cities. In the years since that oft-cited 2014 study, local elected officials and businesses have poured millions of dollars into trying to fix the problem — from creating housing bonds to upgrading the city’s bus system.

Still, plenty of people can’t afford to live here. Focusing on early childhood education will help address these deep-rooted equity issues, said Barkin, who praised CMS superintendent Earnest Winston as “really impressive.”

  • Southern cities ranked low in that 2014 study, reflecting a legacy of systemic inequality and racism, Barkin said. Raleigh was No. 48; Atlanta was No. 49.

“If we’re behind, why not invest in the kids right now?” Barkin said.

He lauded Mecklenburg County’s Pre-K program, which has a goal of 80% enrollment by 2024. “That has a real opportunity for impact,” he said.

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  • When it comes to preschool enrollment, Charlotte lags. Nationally, 48.3% of three- and four-year-olds are enrolled in preschool; in Charlotte it’s 45.9%.

Yes, but: In other areas, Charlotte is surging ahead.

The city’s getting its first four-year medical school, which’ll position the region as a hub for innovation and research. There are cranes everywhere, underscoring developers’ insatiable appetite for Charlotte. The housing market is white-hot. Companies like Arrival and Centene keep adding jobs here.

Compared with peer cities like Nashville and Atlanta, Barkin said, Charlotte stacks up favorably in nearly all categories — affordability, workforce, business and wage growth, amenities like the airport.

  • In Charlotte, 40.3% of households pay more than 30% of their income on housing. Nationally, 47.5% of households pay more than 30%, according to Barkin.
  • More than 24,000 housing permits were issued in the Charlotte region in 2020, census data show. That compares to 12,000 in Columbus; 19,000 in Denver, 16,000 in Jacksonville and 20,000 in Tampa.

Barkin said there’s a “collective hustle” in Charlotte in working to address both economic mobility and growth. “The business and civic leadership is willing to roll up its sleeves and get to work,” he said.

Tom Barkin

Richmond Fed president Tom Barkin (courtesy of the Richmond Fed)

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