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Study: Big Cities Have Highest Income Inequality—and Largest Black Populations

Atlanta

Atlanta

The nation’s big cities have the highest levels of income inequality, according a Brookings Institution study that has profound implications for African-Americans, who tend to be clustered in big cities.

The Washington research group found that income inequality is sharply higher in economically vibrant cities like New York and San Francisco, while the inequality is lower in less dynamic places like Columbus, Ohio, and Wichita, Kan.— mainly because the rich aren’t as rich in those places.

 The income inequality issue has risen in prominence on the national stage as President Obama has made it one of the top causes of his second term, motivating him to push for an increase in the federal minimum wage.

 New York City’s new mayor, Bill de Blasio, has made improving the lives of the city’s poor a top priority, pledging to raise taxes on the rich and to expand early-childhood education and affordable housing. The issue of income inequality has become a major part of the gubernatorial campaign in Massachusetts, where the five Democrats, two Republicans and three independents who want the job are all talking about it.

“The difference between the haves and the have-nots in this country is stark,” Democratic state Attorney General Martha Coakley said in a recent speech to the Greater Boston Chamber of Commerce. “But it’s among the sharpest right here in Massachusetts. We’re No. 4 in the U.S. when it comes to income inequality.”

In the Brookings Institution study, in 2012 the big cities with the biggest imbalance between rich and poor —meaning they have the highest ratio of households in the top 5 percent by income and in the bottom 20 percent—were Atlanta, San Francisco, Miami and Boston.

Except for San Francisco, each of these cities have a sizable Black population, particularly Atlanta, where it  exceeds 50 percent.

In Atlanta, the richest 5 percent of households earned more than $280,000, while the poorest 20 percent earned less than $15,000. The cities of Washington, D.C., New York, Oakland, Chicago, Los Angeles and Baltimore all had substantial imbalances between rich and poor—and they have some of the largest African-American populations in the nation.

Atlanta notwithstanding, the Brookings Institute found that the low-inequality cities tend to be located in the South and the Midwest. They are also sprawling, meaning they tend to encompass neighborhoods that in many other cities would be considered suburbs.

While the biggest factor in the inequality is the rich getting richer, Brookings did find that poverty is as important a factor at the local level. As an example, in 2012 a Miami household in the bottom 20th income percentile earned just $10,000 a year. And the reason inequality in the nation’s 50 biggest cities grew during the recession was not because the incomes of the rich faltered—rather it was because the poor got poorer.

“High-income households did not lose much ground during the recession,” said the author of the study, Alan Berube of Brookings. “Low-income households lost ground and haven’t gained it back. And the pressures around cost of living are higher at the low end than they are at the high end.”

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