How federalism can help minorities and the poor


The "Spotlight on Poverty and Opportunity" website has recently published an article in which I explain how, contrary to conventional wisdom, federalism can often benefit minorities and the poor:

When it comes to the poor and minorities, American federalism has a dubious reputation, arising from the history of state and local governments protecting slavery, enforcing racial segregation, and otherwise oppressing minority groups. There is an element of truth in that negative image. But federalism has also often given the poor, minorities, and immigrants, valuable opportunities to better their lot by "voting with their feet." And policy reforms can make federalism an even better tool for promoting freedom and opportunity….

In the late nineteenth and early twentieth centuries, many millions of African-Americans fled the Jim Crow segregation of the South, in search of greater freedom and opportunity in the North and West. This "Great Migration" by no means ended racism. But it enabled many to escape poverty and oppression. Similarly, internal migration westwards was a boon for women and religious minorities, such as the Mormons. In part because of a desire to attract female migrants, western states such as Utah and Wyoming offered women the vote and provided for more equal rights earlier than those in the East did.

A unitary federal policy on race and gender during that period might well have resulted in more injustice, rather than less….

Foot voting continues to be of great value to the poor and minorities today….

Unfortunately, there has been a substantial diminution in mobility for the working class poor. Among the main causes are restrictive zoning and licensing regulations, which artificially drive up the cost of housing and make it difficult for migrants to enter many occupations. A National Bureau of Economic Research study by economists Chang-Tai Hsieh and Enrico Moretti estimates that, if zoning regulations in hyper-restrictive cities such as New York and San Francisco were reduced to the level of the median American city, large numbers of workers would find better housing and job opportunities, and the nation's GDP would increase by a whopping 9.5 percent…..

Few other policy reforms could simultaneously uplift the working poor and boost the national economy to such an enormous degree… We cannot realize the full benefits of political decentralization unless local governments are more constrained in adopting policies that impede mobility.