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Vermont still ranks first, but US ‘Opportunity’ shows increasing poverty, income inequality

by Vermont Biz   •  

Vermont is ranked highest in the nation for economic “opportunity,” which it has been every year. The fifth annual US Opportunity Index shows that access to opportunity has increased nearly 9 percent nationally since 2011, reflecting a dramatically improved post-recession employment picture, higher high school graduation rates and a significant drop in violent crime, among other factors. Despite these gains, increasing poverty and income inequality combined with stagnant wages continue to impede progress for middle and lower income communities.

As with many other states, while employment is up and crime is down since the Great Recession, median household income and the poverty rate are both worse in Vermont. Typical of measures based on outcomes, states in the Northeast generally did well (see list below) and those in the Southeast did poorly.

Over the past five years, all 50 states and Washington D.C. and three-quarters of counties have improved on the Opportunity Index, an annual composite measure of 16 key economic, educational and civic indicators that expand or constrict access to economic mobility. The Index ranks each state and grades more than 2,600 counties A-F each year.

Yet, the 2015 Opportunity Index also reflects the nation’s uneven economic recovery. Millions of Americans are being left behind, including 5.5 million young adults, 13.8 percent of youth ages 16-24, who are disconnected from school and work. There are higher rates of poverty (+10.5%) and income inequality (+3.4%) and lower median family incomes (-4.2%) in 2015 than there were five years ago.

The Opportunity Index data over five years demonstrates that access to upward mobility varies greatly by geography, and that some states and counties have wider opportunity gaps than others. A child growing up inSomerset County, New Jersey has a far better chance at going to college, getting a family-sustaining job and living in a safe neighborhood than does a similar child born in Marion County, Florida, even though those two counties have similar population sizes and unemployment rates. Somerset County received an A- on the 2015 Opportunity Index, while Marion County received a C.

“This five-year view of opportunity clearly shows that where you grow up plays too large a role in access to the American Dream,” said Opportunity Nation Executive Director Monique Rizer. “In too many places, zip codes determine how far one goes in life. This persistent opportunity gap, particularly for our nation’s youth, is unacceptable.”

While the percentage of young adults who are neither in school nor working has decreased slightly to 13.8 percent in 2015, youth disconnection rates remain higher than they were pre-recession, 12.9 percent. The two factors that correlate most closely with overall opportunity, as measured by the Opportunity Index, are the percentage of people who live in poverty and the percentage of disconnected youth ages 16-24.

In Louisiana, West Virginia, Mississippi, Nevada and Washington D.C., nearly 1 in 5 young adults ages 16-24 are disconnected. In contrast, fewer than 10% of youth are disconnected in Nebraska, North Dakota, Iowa,Minnesota and Vermont.

“We all pay a steep price for youth disconnection in lost talent, less resilient communities, lost tax revenue and higher need for social services,” said Sarah Burd-Sharps, co-director of Measure of America. “We must do better and help young adults, particularly low-income youth and youth of color, connect to meaningful education and career pathways.”

“As the 2016 presidential race gathers momentum, it is critical that candidates and voters have a clear picture of where access to the American Dream is expanding and constricting,” said Russell Krumnow, managing director of Opportunity Nation. “No one sector or political party can solve the opportunity gap alone.  The Index helps policymakers and community leaders focus on cross-sector and bipartisan solutions that can improve the lives, prospects and communities of Americans.”

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