Middle class in NJ: Where you grow up determines if you will be rich or poor

Editor's note: The Asbury Park Press and the USA TODAY NETWORK NEW JERSEY are exploring the broken ladder to the middle class and what it will take to repair it in a five-part series. Learn which neighborhoods in New Jersey offer your family the best chance at a better life. Follow us for our continuing coverage and consider subscribing today.  

The chartered bus from Long Branch and Asbury Park made good time to New York City, dropping eighth graders at Samsung to see the latest smartphones, tablets and paintings that look like television sets.

The students played the online game Fortnite. They viewed a prototype for an automated apartment. And when they returned to their schools, set in some of the lowest-income neighborhoods at the Jersey Shore, they were in awe.

"It’s a once-in-a-lifetime experience,” said David Carpio, 12, a student at Our Lady of Mount Carmel School in an Asbury Park neighborhood whose residents have grown up to have an average household income of just $29,000 a year.

Carpio and his classmates are part of an attempt to reverse a troubling trend. The generation of Americans now in their 30s is less likely than the overwhelming majority of the baby boomer generation to do better than their parents, a new study by Harvard University finds.

And the financial outcome of children raised in the '80s and '90s is tied to the neighborhood where they grew up.

Harvard calls it "The Opportunity Atlas." Instead of looking at poverty or wealth, researchers for the first time have gathered data that track Americans' upward economic mobility, crunched the numbers and produced a map of the American dream, or, in some cases, nightmare.

Part 1: Middle class in NJ: Where you grow up determines if you will be rich or poor

Also: These are the neighborhoods that offer the best opportunity in NJ

Part 2:Is Monmouth program a blueprint for upward mobility? 

Part 3: NJ businesses step in to fill opportunity gaps but often don't know where to turn

Part 4: Next task for Ocean vocational school: Rebuild a ladder to the middle class

Part 5: NJ trailblazers offer 6 secrets to success

Scroll to the end of the story for the map showing how your neighborhood fares.

The atlas shows children who grew up in wide swaths of the Southeast are faltering, putting them at risk of getting trapped in a cycle of poverty. It shows children who grew up in the heart of Iowa farm country are thriving. And it provides surprises; fast-growing Charlotte, North Carolina, ranked last in upward mobility among 50 cities nationwide. 

A team of policymakers, philanthropists, educators and more in Charlotte is using the data to take aim at roadblocks, whether it is expanding early childhood education or creating mentoring programs to ensure children have role models. 

Harvard partnered with the Asbury Park Press and the USA TODAY NETWORK New Jersey to look at the chances people in the Garden State will grow up to do better than their parents.  

Harvard researchers have found:

• A fractured ladder to upward mobility. A little more than half of people born in New Jersey in 1980 are doing better than their parents.  Downward mobility is more pronounced in the industrial Midwest. But previous generations of Americans were virtually certain to do better than their parents. 
• Income inequality. Harvard researchers say more of the economic spoils are going to households at the top of the income pyramid, making it harder for lower-income workers to gain ground. New Jersey has produced neighborhoods with a sizable disparity. A Marlboro neighborhood was home to children who grew up to have an average household income of $86,000 a year, nearly twice as much as the U.S. median. A neighborhood in Atlantic City, blocks from glimmering casinos, was home to children who grew up to make $15,000 a year, placing it among the nation's poorest.
• Divided by a street. In some cases, children would have been better off if they had grown up a few blocks away. In Freehold Borough, children on the south side of East Main Street grew up to make 44 percent less than their peers on the north side of East Main Street, even though they attended the same schools. Black and Hispanic residents make up 70 percent of the south side of the street, but less than half of the north side of the street.
• Racial disparities. In Hackensack, low-income black children from the neighborhood that includes Polifly Park grew up to make $35,000 a year, about $13,000 a year less than low-income white children from the same neighborhood.

The economic detour, experts say, was set in motion by a shift in the economy from manufacturing to information, putting a premium on highly skilled, highly educated workers.

It has put more pressure on a patchwork of New Jersey organizations trying to tackle what Harvard has identified as keys to upward mobility: stable families; a strong social network; good schools; and low poverty rates.

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The goal of the various groups: provide a lifeline to students who grow up in neighborhoods with downward mobility, giving them a glimpse of an outside world they don't see at home, school or in popular culture.

The study, however, shows that the groups' efforts are falling short. One new idea embraced by both political parties, called "opportunity zones," gives wealthy investors tax breaks for funding residential or commercial projects in low-income areas. But even that, experts say, could backfire and skip over the residents it is intended to help.  

"Most of the way we learn about jobs is by observing what our parents do or what people in our neighborhoods do," said Mary Gatta, a sociology professor at the City University of New York who is working on a book about low-income workers in Asbury Park. 

"So how do we open up awareness to jobs and open up the pathway to get there?" she asked. "It’s great to say 'I want to be a lawyer,' but how do we actually help people make informed choices?"

A shattered ladder to the middle class

The school field trip to Samsung was designed to give Asbury Park and Long Branch students a view beyond their neighborhoods.

The idea was the brainchild of Abran Maldonado, who operates Create Labs, a Holmdel-based business that gives underprivileged students skills they need to pursue technology careers.

The trip almost didn't happen. Maldonado cobbled together a private company, a nonprofit organization, a private school and a public school, only to learn none had money for a bus.

At the last moment, Jacob Jones, director of Long Branch's Office of Community and Economic Development, agreed to pay for the trip with money from his department that is geared for youth activities.

"They need to get out of this environment to see what the world is all about," Jones said.

The idea of the American dream is as old as the country, binding a diverse population together with the idea that the opportunities to climb the economic ladder are available to everyone with the right amount of fortitude.

"The Opportunity Atlas" developed by Harvard shows that the ladder has broken down.

It traced 20 million Americans across the nation, now in their 30s and early 40s, to the neighborhood where they grew up and found only half of them are making more than their parents. By comparison, 90 percent of children nationwide born in the 1940s did better than their parents.

In New Jersey, about 52 percent of children born in 1980 could say the same.

Who stumbled and who thrived can be traced to specific neighborhoods. And the outcomes are mixed.

Among the state's top performers is a neighborhood in Marlboro that includes Parc Chateau and Coltsbrook. The subdivisions were built in the late 1970s and attracted New Yorkers searching for more affordable homes and good schools.

Children raised there have an average household income of $86,000 a year, nearly twice as much as the typical neighborhood nationwide.

Marc and Irene Queller moved from Queens to Parc Chateau in 1978. Marc owned a video store business. Irene, a teacher, stayed home to raise their four children.

Their neighbors worked at Bell Labs, the groundbreaking research and development arm for AT&T in Holmdel, or commuted to New York. And everyone in town rowed in the same direction.

"I really believe it was all people working hard and agreeing education was important for our children,” Irene Queller, 67, said.

At the other end of the spectrum is a neighborhood in Atlantic City near the intersection of Baltic and North Carolina avenues and less than a mile from the new Hard Rock Hotel Casino, the boardwalk and the ocean.

About 86 percent of the households there were occupied by single parents, nearly three times higher than the national rate of 30 percent. About 12 percent of children who grew up there were in prison or jail in 2010, compared with the national rate of less than 1 percent. And the average household income for people in their 30s who grew up there was $15,000 a year in 2014 and 2015, compared with the national median of $44,000.

Stacy Johnson, 50, was raised here and works at a warehouse for a casino. She said casinos routinely have job fairs for local residents. But the job alone can't ensure their children will thrive.

"If a parent works (at the casino from) 3 p.m. to 11 p.m, the child is in school all day, the child comes home, they’ve got to feed themselves, maybe take care of brother or sister, and then mom comes home just to put them to bed," she said.

Did she see examples of that after school growing up?

"Yeah. I did," Johnson said. "That’s where they chose to go left or right. Now you could hang out at a friend's home that’s more stable, or you can look to the streets.”

Opportunity a few feet away

The atlas can help you move to a neighborhood that produces good outcomes.

Take Freehold Borough.

It is just two square miles nearly in the center of New Jersey, but its children have grown up to have vastly different outcomes.

Those who grew up on the north side of East Main Street and east of Court Street have an average annual household income of $59,000, above the national median. Those who grew up on the south side of East Main Street and east of South Street make $33,000, or 44 percent less.

Like many neighborhoods in "The Opportunity Atlas," the differences among races is stark. Low-income white children in both neighborhoods grew up to make twice as much as low-income black children.

Some 6.4 percent of low-income black children who grew up south of East Main Street were in prison or jail in 2010, compared with 1.9 percent of low-income white children from the same neighborhood.

All this, even though they went to the same schools.

The under-performing neighborhood once housed A&M Karagheusian Inc., a rug maker that fueled the town's economy until it closed in 1961, Freehold historian Kevin Coyne said. 

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The houses around the two-block plant were smaller and more affordable than the houses to the north of Main Street, Coyne said, and they were eventually gobbled up by absentee landlords who rented them out to low-wage workers.

It led to an economic decline that was documented by one of the rug maker's neighbors, Bruce Springsteen, who wrote about the racial tension, whitewashed windows and vacant stores in "My Hometown."

Not that Freehold children growing up on the right side of the tracks have an easy time. Kristel Gousse was 9 months old when her parents divorced and 12 years old when she came to the borough to live with her father and stepmother.

The turmoil could have spelled trouble. But Gousse usually had a friend she could turn to to keep her on track. And she said her stepmother encouraged her to pursue her goals.

Gousse, 22, a biology major at Monmouth University, wants to work with Doctors Without Borders, an organization that provides humanitarian medical care worldwide.

When life got dicey, "I still had that little voice in my head, (saying), 'It doesn’t matter what other people are doing and how they are treating you and where you live, you need to be a good person because that’s the right thing to do,'" Gousse said. 

Social programs in a capitalist society

The fracturing ladder to prosperity is causing strife. 

In Queens, for example, residents recently rejected the prize of a new headquarters from the internet giant Amazon because they were unconvinced the economic windfall would benefit them.

The economic tension can be seen in New Jersey, too. 

A coalition of civil rights groups sued the state last year, challenging its practice of sending students to schools in districts where they live, essentially creating a segregated school system. 

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New Jersey is one of the nation's most racially diverse states, but a UCLA study said its schools are also the sixth most-segregated for black students and seventh-most segregated for Latino students.

The study found black and Latino students typically attend schools whose students are in poverty, setting the stage for a wholly different experience than white students. It can harden inequalities set into motion decades ago by public policies, such as exclusionary zoning and overt discrimination.

There is no consensus on how to rebuild the ladder — and the role government should play.

President Franklin Roosevelt rolled out the New Deal in the 1930s to come to the aid of an economy that was collapsing in the Great Depression. President Ronald Reagan promoted self-reliance in the 1980s, ushering government out of the way and unleashing private industry.

New Jersey Gov. Phil Murphy, a Democrat, has gradually increased the minimum wage to $15 an hour by 2024, which would be the highest in the nation. And he pledged to revamp an incentive program for businesses that he viewed as a multibillion dollar tax giveaway to corporations.

As Republicans and Democrats fight over almost everything, they have found rare agreement on the newest program designed to restore the ladder to upward mobility: opportunity zones.

The program — championed by presidential candidate U.S. Sen. Cory Booker, D-N.J., and U.S. Sen. Tim Scott, R-S.C., included in Trump's tax reform law and touted by the Murphy administration — offers wealthy investors capital gains tax breaks if they make long-term investments in projects built in low-income or rural areas. 

The goal: lift up long-struggling neighborhoods. Even if residents don't directly benefit, new development could generate tax revenue that can be reinvested in social programs. 

New Jersey has set up 169 opportunity zones in 75 municipalities. It is up to local officials to approve the development, which can range from affordable housing to business expansions.

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But there are no requirements that developers hire local residents. Or build affordable housing. Or create well-paying jobs. In that case, the neighborhood could gentrify, replacing its low-income residents with the affluent. Developers and investors would reap the rewards. 

“Development is good, (but) not always,” said George Ashton, managing director of strategic investments for LISC, a Washington, D.C.-based organization that works with the private sector to invest in communities.

“You still have to bring programs and training so that you create a ladder for folks to begin to experience and participate in economic growth," he said. "If you don’t, you just get displacement.”

Paintings that look like televisions

Not far from new million-dollar condos on the Asbury Park boardwalk is Our Lady of Mount Carmel Roman Catholic Church and school, sitting in a neighborhood whose children of the '80s grew up to make just $29,000 a year.

The city has staged an economic turnaround with restaurants, stores and a boardwalk that has garnered national acclaim. But the west side of town has yet to prosper.

How can students there take advantage of the city's revival? Or the opportunities popping up elsewhere? How can they find the economic ladder, let alone climb it?

A few days after their field trip to Samsung, the students gathered to talk about the experience.

Had the trip fallen apart, it is hard to imagine that the students would stumble. Mount Carmel's after-school enrichment program offers not only science and technology, but also knitting, baking and basketball.

Rosalia Machado, 13, of Ocean Township, showed off a catapult she built that flung a miniature marshmallow 26 feet. The world might not need catapults anymore, but it pays a premium for engineers.

The trip to Samsung, though, gave the students a new perspective. 

"I didn’t know there were so many new technologies," said David Carpio. The 12-year-old initially wanted to be an anesthesiologist, but now wasn't so sure.

"I thought it was phones, consoles and computers, three major advances in technology. But then when I saw these new experiences, voice activated, new paintings that look like televisions," he said. "It made me think about what should I do with my career."

MORE:Click here to find out how the neighborhood where you grew up fares. 

Michael L. Diamond is a reporter at the Asbury Park Press and has been writing about the New Jersey economy for 20 years. Contact him at @mdiamondapp; 732-643-4038; mdiamond@gannettnj.com