At the end of June, the Federal Reserve Bank of Cleveland hosted its seventeenth Policy Summit. The theme for 2025 was “Building Strong and Sustainable Communities,” and the focus was on research and innovative strategies related to housing, the workforce, and economic development. The opening keynote came from Dr. Rajiv Shah, President of the Rockefeller Foundation, in which he called for innovation in our civic work that is as rigorous and empirically grounded as in the scientific field. During his comments, Dr. Shah made specific reference to research led by economist Raj Chetty at Opportunity Insights and Harvard University.
At the Fund for Our Economic Future, we are very familiar with Chetty’s research, and we believe in the approach championed by Dr. Shah. For too long, we have treated economic outcomes like a mystery, seldom seeing the hidden strings that move us. Chetty’s latest research, which analyzes outcomes for 57 million children, provides a clear and urgent roadmap for our work here in Northeast Ohio.
The data reveals two diverging trends. First, class divides are widening. The gap in average adult household income for white children from high-income versus low-income families grew from $17,720 to $20,950 between the 1978 and 1992 birth cohorts. At the same time, some racial gaps have narrowed. The income gap between white and Black children raised in low-income families fell by 28% for children born between 1978 and 1992. While this is a hopeful sign of progress, we must remember that significant racial income disparities persist.
Crucially, the study shows that the economic fates of low-income Black and white children are positively correlated. In other words, when low-income Black children do better, so do low-income white children. This confirms we are not in a zero-sum competition; strategies that create broad opportunity tend to lift all boats.
The most critical finding, however, is what drives these changes. The study found that including community-level parental employment rates as a factor fully explains the growth in the white class gap and explains 57% of the reduction in the Black-white race gap.
This point is crucial. The key factor is not just the employment status of a child’s parents, but the employment rate of the entire community where a child grows up. When children are raised in neighborhoods with high concentrations of unemployment, it affects their long-term outcomes. The takeaway for Northeast Ohio is clear: to foster mobility, we must pursue concerted efforts to bring investment and jobs to the areas that have been left behind.
This is precisely where our work at the Fund for Our Economic Future aligns with the research. Our initiatives are an empirically grounded response to this central finding.
- By concentrating employment in strategic job hubs, we are creating accessible job opportunities that directly counteract the growing class gaps identified in the research.
- Our efforts to improve transportation infrastructure are designed to ensure that parents and residents can access these vital employment opportunities.
- Our commitment to equitable economic development aims to reduce the substantial racial gaps that remain, fostering inclusive growth and community-led wealth creation.
The call from the Policy Summit was for an approach to civic work that is guided by data. The research from Opportunity Insights provides that data. Now it is up to us—the civic, political, and business leaders of Northeast Ohio—to act on it. By supporting strategic, evidence-based initiatives that increase employment opportunities in our communities, we can build a more prosperous and equitable future for the entire region.
