Photo by Taber Andrew Bain (https://creativecommons.org/licenses/by/2.0/legalcode)
People are still hurting from the 2008 housing market collapse. Careers were shattered, houses foreclosed, and lives turned upside down. Since then, the American economy has crept toward its former glory. In most cases, urban areas suffered the most from what experts have dubbed the Great Recession. As a result, these areas have had a more difficult recovery. Research has shown that many segregated neighborhoods, especially those that were mainly black and Latino, were hit the hardest of all. Their recovery is of special interest to Jacob Rugh, a sociology professor at BYU.
While ethnic identity certainly played a part in the struggles, recession recovery is as much a story of place as it is one of race. At least, that’s what some of Rugh’s most recent research suggests. “Income inequality is being played out geographically,” he said. Rugh has been studying the sociological implications of the recession for several years, and he has published five articles on various topics within this area.
A discussion of income equality and recession recovery requires understanding the concept of gentrification. Gentrification is the name given to a process wherein developers, big box stores, and upper-class residents move into a historically poor—and often culturally rich—neighborhood. As for whether the effects of gentrification are positive or negative, the jury is still out. One paper that Rugh and collaborator Derek Hyra of American University wrote looked at three gentrified neighborhoods, Harlem in New York, Shaw/U Street in Washington, D.C., and Bronzeville on the South Side of Chicago. Their goal was to determine what factors drove varying degrees of economic recovery there.
“Gentrification is really a shift that concerns class, but usually the racial component is a salient one,” said Rugh. And, as Rugh has seen, accelerated post-recession gentrification has changed and erased racial lines in some of America’s largest cities. However, gentrification and economic recovery have not played out the same way everywhere. Rugh’s research shows that the neighborhoods in New York and D.C. have recuperated more quickly than Bronzeville in Chicago. Rugh offered several possible explanations for this disparity.
One idea is something Rugh calls a “spatial stigma.” People believe and propagate certain stereotypes about an area, which can contribute to economic stagnation. “Stereotyping a place is pretty powerful,” said Rugh. “Think about a city like Detroit. Detroit vs. not being in Detroit makes a big difference.” Rugh thinks spatial stigma has affected the South Side of Chicago in this way, as people often associate it with crime and poverty. This is only a hypothesis, however. Rugh said he would like to test it to see its true effect.
Racial segregation also offers explanation for Bronzeville faring worse than the other neighborhoods. According to Rugh, Harlem and Shaw/U St are much more integrated, multi-racial neighborhoods than Bronzeville, which is composed primarily of African American households. “Segregation concentrates poverty,” said Rugh. “Any time there’s a negative impact on a certain sub-population, it will be focused in a geographic space because of segregation.”
That is the story for most large eastern cities. In the West, with fewer large cities and less ethnic diversity, the heart of recession recovery is the suburbs. Latinos, according to Rugh, led the “suburban wave” of the early 2000s. Not only did they purchase homes with oft-discussed subprime mortgages, but with other risky forms of lending, such as low/no documentation loans. Rugh was actually the first in his field to look at these newer, riskier lending practices.
This concentration in the suburbs is what caused Latinos to get hit so hard by the recession. However, this didn’t occur solely based on ethnic identity. “From a social theory standpoint, it wasn’t just because they were marginalized as a minority and segregated into the inner city. It’s also because they were up-and-coming and moving out to the suburbs. And those suburbs were not always spaces of opportunity,” said Rugh. With this en masse movement to the suburbs, coupled with a sharp increase in risky lending, we have an entirely different picture of the recession in the West.
Rugh’s research led him to assert that Latinos were the hardest-hit demographic of the Great Recession. “Past scholarship and sociology would predict that it would be African Americans [that got hit hardest by the recession]. Which is exactly what my previous research would predict,” said Rugh. “Until about 2008 or 2009. . .it was African Americans who got hit hardest. But, since then, it’s been Latinos.” Rugh’s research revealed this new fact.