Business

Evan Horowitz | Quick Study

The poor fare better in Mass., even though inequality abounds

Sure, wages are high in Massachusetts, but so are housing costs.

JOHN TLUMACKI/GLOBE STAFF/File

Sure, wages are high in Massachusetts, but so are housing costs.

Massachusetts. It is the best of states, it is the worst of states. It has a top-rated school system, it has sprawling achievement gaps. It has high wages, it has high inequality. It has the thriving city of Boston, it has the troubled city of Springfield.

There is a problem with this familiar, glass-pretty-full-yet-also-half-empty vision of the Bay State. While Massachusetts is unquestionably riven by divides, low-income and minority residents are doing vastly better than their peers around the country.

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When it comes to boosting pay for low-wage workers, providing educational opportunities for all, even guaranteeing affordable housing — Massachusetts is already outperforming most of the nation.

This is not a reason to discount or downplay the scourge of inequality in our state, but it suggests we may have to develop solutions on our own. There’s no paragon out there for us to emulate, no other state whose superior record can point the way toward a better balance of growth and equity.

Inequality reigns AND low-income families are better off

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If Massachusetts were an independent country, we’d be the fourth-richest nation on earth. And that wealth isn’t all flowing into the pockets of the top 1 percent.

Low-wage workers earn more in Massachusetts than they do in any other state. According to the latest numbers from the left-leaning Economic Policy Institute, workers at the 20th percentile earned $12.41 an hour in 2016, a full $1.50 higher than the norm for the rest of the nation.

What’s more, these low-wage workers have enjoyed fairly steady gains in recent years, with annual raises of roughly 2 percent since 2012. That may not sound like much, but it’s actually better than high-wage workers have done over that same time period.

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And this isn’t happening by accident. Tight labor markets are generally good for low-wage workers, and all the while Massachusetts has been steadily increasing the minimum wage, from $8 to $11.

To be clear, at this rate it would take decades to end inequality and bring the state economy back into some kind of equitable balance. But low-wage workers in Massachusetts have been seeing some gains and generally faring better than their peers around the country.

Housing is expensive AND still more affordable than comparable cities

Sure, wages are high, but so are housing costs. Which raises an obvious question: Are workers really better off, if their large paychecks are quickly offset by large rent checks, particularly in and around Boston?

Again, though, it’s important to put Boston in the national context. Look around the country, and it’s hard to find examples of thriving, coastal cities with lower housing costs.

Consider families earning less than $45,000 a year. That’s not a lot of money in Greater Boston, well below average. So it’s not surprising that when you run the numbers, about three-quarters of these families are considered “cost-burdened,” meaning they spend at least 30 percent of their income on housing, according to the Joint Center for Housing Studies at Harvard University.

However, most comparable cities look even worse. Not only do New York and San Francisco have more cost-burdened families, so do Portland, Ore., Seattle, Washington, Austin, and Miami.

Again, this isn’t to say that we should rest content; ideally, we’d find the right mix of zoning policies and market interventions to make housing more affordable for struggling Bay Staters. But if that were easy, someone else would already be doing it. And right now, Boston is outdoing most comparable cities.

Achievement gaps persist AND minority students outperform peers

With education, you find a similar dynamic. Yes, there is a real and sizable achievement gap in Massachusetts. At the same time, black students do better in Massachusetts than nearly anywhere else.

Consider the eighth-grade NAEP tests. On the 2015 math exam, white students in Massachusetts scored roughly 14 percent higher than black students. On the reading test, a very similar story.

And yet, black students in Massachusetts consistently outperform their peers in other states. They tied for second overall in the 2015 math test, and they tied for fourth in reading.

What’s more, the state’s own MCAS results show that both black and Hispanic students have made substantial gains in recent years. Still, the achievement gaps remain, because white students have also posted their own gains.

Where does this leave Massachusetts?

Complacency is surely the wrong takeaway — not when inequities remain large and one in seven Bay State children currently live below the poverty line.

Several states are raising the minimum wage to $15. Worker training and apprenticeship programs have a good track record around the world. And Massachusetts still runs a regressive tax system that makes low-income residents pay a higher overall tax rate than their richer neighbors.

But the very fact that Massachusetts outperforms so many other states — including when it comes to providing opportunities for low-income and minority residents — suggests that a lot of the low-hanging fruit is already gone.

There aren’t a lot of other shining cities on higher hills that we might want to emulate. And looking to more egalitarian countries around the world has its limits too. They have powers that we don’t, like the ability to control monetary policy and manage immigration.

Massachusetts’ economic powers are limited by our status as a state. And when you compare our results with the states around us, it’s hard to find anyone doing a substantially better job.

Evan Horowitz digs through data to find information that illuminates the policy issues facing Massachusetts and the U.S. He can be reached at evan.horowitz@globe.com. Follow him on Twitter @GlobeHorowitz
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