Not to whomp on whom I am sure are quite earnest college kids, but oh, man this is a howler.

http://www.nj.com/opinion/index.ssf/2017/05/what_causes_inequality_among_similar_towns_in_nj_o.html

First, I will admit that “income inequality” to me is a tell that whomever is speaking doesn’t understand microeconomics or any economics for that matter.

So the question is posed, why is Plainfield so different from Westfield now with their marked inequality? Their suggested reason:

Consider the towns of Plainfield and Westfield in Union County, where income inequality is abundantly clear. Westfield households earn 2.69 times more and the average property is worth $429,100 more than their neighbors inPlainfield. Until the Central Railroad of New Jersey built a direct line between Westfield and Jersey City in 1901, Westfield and Plainfield shared a similar history.

Both towns were largely dependent on agriculture for growth and sustenance. But once the connection from Jersey City to Manhattan was established, Westfield transitioned from a blue-collar to white-collar town and naturally experienced economic prosperity. On the other hand, Plainfield did not gain access to the Jersey City line until 1910 – for  reasons which are still unclear.

Today, Westfield has an express line to/from Newark Penn station during rush hour that skips the seven other towns between Westfield and Manhattan. This has attracted more wealthy families to the area, led to a better school system and public services, and, overall, perpetuated the vast inequality between the neighboring towns.

Got that? Having rail service to Jersey City NINE YEARS longer than Plainfield is what made Westfield what it is today.

Wow.

I was tempted to say that if you tried to statistically model why the two towns are different, the discrepancy is rail service would have almost zero predictive value. But the explanation can be much simpler.

This is like saying that one restaurant is better than another because of napkin fabric selection in the 1980s.

There are hundreds of factors that would make two towns near each other diverge economically. Things like:

  • Local industries located in town (in the early part of the 20th century manufacturing was king)
  • World War II labor and housing for wartime workers / post WWII suburban development
  • Highway access (Westfield had better access to the GSP since it was built in the early 50s, 78 wasn’t completed until the late 70s.)
  • Land use and development (zoning or lack thereof)
  • Housing stock (homes for manufacturing employees vs professionals)
  • Crime and Policing effectiveness
  • Taxation policy
  • Political leadership and corruption (potentially the biggest factor)

But, no. Nine years of no railroad service equals economic doom.

Yes, I know, these are college kids and you may think I am being mean. I’m not. And to be fair, they do try to give themselves an out that their analysis is not very thorough.

In no way should one assume that rail access is the only factor which has created and continues to create such wide differences in town income levels. However, it should be clear, through historical context, that rail access (or lack thereof) played a role in the economic development of several New Jersey towns.

If that is true, then why are so many towns with fabulous rail access built early on (Linden and Rahway come to mind) aren’t as nice as Westfield? Is the difference that Westfield is “nicer” than Cranford because we don’t have an express train that skips Roselle Park and Union?

Um, no.

But, if they ever read this it’s for their own good, because they segue into something completely laughable.

As it turns out, the New Jersey state government itself tacitly acknowledges this fact with their relatively new Transit Village Initiative, which has had issuesgetting off the ground.

The Initiative offers funding to municipalities lacking access to NJ Transit’s train lines so that they can build new train stations and stimulate economic development in their towns. However, much of the burden to plan and create the infrastructure for new train stations (and subsequent development) falls on the towns themselves.

Yep. Transit Village cash from the state can be a key to solving income inequality!

Sigh.

Yes, a town can try to change its trajectory, and some have. But it takes decent political leadership and a will to out-compete other towns in the area to attract businesses and more upscale residents. Will a nicer train station help? I don’t think it helps as much as they think. Two blocks away from the Fanwood station, which is a cute little station, you don’t really know it’s there.  But then, Cranford’s is hideous, and it hasn’t dragged the town down with it.

But, you may argue, isn’t Cranford Crossing better than the vacant lot that was there? And wasn’t that a beneficiary of the Transit Village initiative? Yes, better than a vacant lot, but could it have been approved and built without any assistance from Transit Village funds? My understanding was that the 4 story parking garage was the major change from what would have been done if done completely privately. You’re welcome to set me straight in the comments.

Bottom line, Transit Village money is a token from the state that may make a few structures around the train station more aesthetically pleasing, but will have little effect on a town’s status and trajectory.  A town’s trajectory is much more dependent on the political leadership and focus on quality of life issues in the town as a whole.

Solving income inequality by removing government barriers to development such as lowering taxes and reducing corruption would be more effective than any Transit Village initiative, and more effective than any wealth redistribution.  A wealth redistribution would be successful at making Westfield more like Plainfield, but not Plainfield more like Westfield. But the latter two methods are “easy” for politicians and can enable them to enrich themselves and their friends, so they are the two methods more likely to be tried.

Maybe we should ask the kids to do some research on effects of poor tax policy and corruption in creating income inequality. Then they’d learn something.

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