Economic Mobility Index and Economic Leadership LLC

By Skylar Elliott Casey

Lead Analyst, Economic Leadership LLC

When the Raleigh Chamber approached our firm, Economic Leadership LLC, to create a way to measure the Raleigh metro’s performance on Diversity, Equity, and Inclusion (DEI) compared to other metropolitan areas in the country, we knew it would be an interesting challenge. In our preliminary research, we did not find any similar work. As researchers, building a new product focused on a highly discussed issue required close coordination with the Chamber staff and a very specific framing of the goals. Different groups may have varying perspectives on what constitutes the best economic mobility-performing metros. Some might prioritize areas with the most supportive laws and policies for marginalized groups, while others could emphasize the total number or percentage of people from diverse backgrounds living within a metro area.

In preliminary discussions with the Chamber, they expressed the most interest in understanding the economic aspects of the issue, particularly the opportunity and wealth-building gaps across diverse populations. Ultimately, the principle underlying this effort is that a metro with a strong economy should offer everyone the chance to share in the economic opportunities. There is well-documented national research that highlights persistent wealth gaps between different racial and ethnic groups. For example, the national chart below illustrates how the median family net worth for white, non-Hispanic families has consistently remained about $100,000 higher than that of Black and Hispanic families.

One of the research challenges was that wealth-building data broken down by demographic group is only calculated at the national level. To assess the performance of diverse populations in the Raleigh metro and other U.S. metros, we had to balance the Chamber’s goals with the available data. For example, while net worth data is not available at the metro level, there is data on homeownership and business ownership that can provide similar insights into wealth differences across regions. We considered many potential metrics and ultimately focused on those that helped answer these guiding questions:

• Are people from diverse backgrounds able to acquire quality jobs and build wealth?
• Are people from diverse backgrounds building the skills needed for high-wage jobs?
• Are people from diverse backgrounds rising to positions of leadership?
• Are people from diverse backgrounds able to build economic security and reduce their risk of financial shocks?

Another key aspect of the index was determining which diverse groups would be measured. Economic mobility efforts can encompass a wide range of demographics, including race, ethnicity, age, immigration status, gender, religion, veteran status, people with disabilities, children, single-parent households, sexual orientation, and socioeconomic status, among others. The Raleigh Chamber aimed to gather comprehensive information on as many groups as possible, with the aspirational goal of ensuring opportunity for all. However, data availability was a significant limitation. For instance, measuring the LGBTQ community is challenging because the Census only collects data on the two sex categories, male and female. While some Census data is available on same-sex couples, it remains limited in scope. The demographic groups we were able to include in the index were race/ethnicity, gender, place of birth, disability status, and veteran status.

Most of the data evaluated comes from 2022 or 2023, using the latest available information. For each data point, we assessed the current score, the equity gap, and the 10-year change rate. For example, the homeownership rate for Black, Indigenous, and People of Color (BIPOC) was included, along with the gap between BIPOC and white homeownership, and the percent change in BIPOC homeownership over the past 10 years. This approach resulted in a total of 89 metrics used to calculate the DEI index. The primary sources were the U.S. Census Bureau and Lightcast, a subscription-based labor market data provider. These metrics were calculated for 155 of the most populous metros in the U.S.

The final key research decision was determining the weighting for each metric. The results of a multifactorial analysis are highly dependent on the weighting criteria used, as the same data can produce very different outcomes depending on how it is weighted. For this analysis, we aimed for an index with a maximum possible score of 100 points. The goal was to weight each focus area equally, such as homeownership and household income. Current scores and equity gap measures were prioritized as better estimates of how diverse populations are performing today, compared to growth trends. As a result, raw performance values and gap measures were assigned a weight of 1.367 points each, while 10-year trend data was given a weight of 0.67 points. This weighting approach produced an index value for each metro area, with a possible score of 100, and growth measures accounting for approximately 20 percent of the overall score.

After gathering and analyzing the data, the Raleigh metro area performed well in the economic mobility metro index, earning an overall score of 65.4, which ranked 9^th among all metros. The highest index score, 71.4, achieved by the Seattle, Washington metro area. In the subindexes for leadership representation, economic opportunity, and education, Raleigh ranked in the top 30 out of 155 metros. However, the Raleigh metro did not perform as strongly in the economic security metrics, which include health insurance coverage, homeownership, and income equality.

Raleigh-Cary, NC Economic Mobility Index Performance by Subindex

The results were also ranked by diverse population cohorts. This group-based data accounted for 98 out of the 100 possible pointes in the index score, with the remaining score based on income equality measures. Raleigh’s scores for gender, veterans, and foreign-born residents ranked in the top 30 out of the 155 metros analyzed.

Raleigh-Cary, NC Economic Mobility Index Performance by Group

The purpose of the index is to provide policymakers and stakeholders with valuable insights into the distribution of opportunities, access to resources, and levels of representation. While the Raleigh metro performed well compared to other metros, the analysis also highlighted several areas for growth. This data-driven approach is intended to facilitate evidence-based decision-making and target interventions that can lead to sustainable and inclusive economic growth in the Raleigh metro.

Further blog posts will explore additional insights from this analysis and discuss how strategies and investments can be shaped to create better outcomes for all of Raleigh’s citizens.