Whose Network Matters?

Think about the last time you had people over for dinner. Who was around the table? How did you know those people? Were there any significant differences among the group? Chances are, if you’re like most people in the United States, everyone gathered around your table shares roughly the same socioeconomic status.

The economic segregation of friendships

Recent research from Harvard economist Raj Chetty suggests our social networks are highly segregated by income. Perhaps the most striking finding in the paper is that the lack of cross-class friendships is the single most important factor in improving a low-income child’s access to opportunity.

Children who grow up in neighborhoods with higher levels of what Chetty calls “economic connectedness”—relationships between people from different economic groups—have a significantly higher chance of rising out of poverty. In fact, Chetty’s team argues, “If children from low-income families were to grow up in communities with economic connectedness equivalent to that of the average child from a high-income family, their incomes in adulthood would increase by 20 percent on average.”

The value of these friendships is immense. For a child growing up in a family making $27,000 per year, the value of an increase in cross-class friendships is equivalent to the impact of adding $20,000 to their household income.

Digging deeper into the data

Let’s dive a bit further into the data: The top 10 percent of urban households make over $200,000. In a random group of 50 of their friends, more than half earn over $150,000, and only one in 50 earns $20,000 or less. The inverse is true for low-income families—only about one in three people earn more than the median income.

This is the average community in the United States. There are many places (especially in the Southeast) where the picture is even more stark.

Chart source

The problem with a transactional view of social capital

Chetty’s research backs up the saying “it’s not what you know but who you know that matters.” While having the data is helpful for decision makers who want to understand the mechanisms driving economic mobility, it introduces a values conflict.

For many, the first interventions that come to mind when reading these stats involve importing low-income individuals into spaces typically filled with high-income families.

This instinct isn’t wrong—it’s exactly why needs-based scholarships exist and why they have been transformative for so many—but we need to tread carefully; it can be dangerous to extend this too far.

If we want to create communities where a child’s household income doesn’t determine their future, it seems odd to start by centering the value rich kids have to offer. This kind of approach positions the privileged as more valuable simply because of their parentage and, paradoxically, reinforces the economic stratification that inhibits economic mobility in the first place.

It's important to recognize that this is not a problem with the concept of social capital, only a common stumbling block in putting what we know into practice. We must lean into the nuance by thinking a bit more critically.

Here are three recommendations for wrestling with social capital in greater depth:

1. Stop thinking about social capital as a transaction.

   Building social capital is about bridging between two equally valuable networks, not about networking. As long as we frame economic opportunity as a ladder, we will continue to mistakenly place an outsized value on networks with proximity to power and wealth while downplaying the value of other networks with different strengths.

2. Recognize that everyone brings value to the table.

   All networks have value. Of course, some networks have greater access to money and power than others, but no amount of money and power can buy universal expertise, expression or access. This is why wealthy people find it chic to invite artists to parties and why the social norms that would earn a seat at the “cool kids table” aren’t interchangeable across high school cafeterias.

3. Value comes from building relational bridges across difference.

   We are built for authentic relationships. We all need mentors, champions and co-conspirators. These kinds of relationships don’t come from thinking transactionally about others or from privileging what we have to offer. Rather, they emerge from an earnest desire to meet another person in their difference and extend them care because they are inherently valuable.

This approach to social capital can help us return to a perspective on relationships that is people-centered rather than seeing others as a means of self-advancement. As authentic relational leaders, Bridge Builders are uniquely positioned to think critically about the complexities of social capital and push beyond easy solutions.

Let’s make our commitment to bridge building be the foundation of our opportunity movement.