Income Inequality

How big (or small) is your city’s middle class?

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Cross-posted on Brookings’ Metro Blog, The Avenue

Alan Berube and Alec Friedhoff

Have American cities lost their middle class? The recent unrest in Baltimore caused some to (inaccurately) portray that city as overwhelmingly poor. Meanwhile, rising inequality and rapid gentrification in places like San Francisco and Seattle raise the concern that some cities are becoming exclusive enclaves for the wealthy.

Yet it turns out that many U.S. cities still retain a sizable middle class, at least judged by national standards. We took annual income data from the American Community Survey, which the Census Bureau publishes for all places with populations of at least 65,000. Comparing these city income data from 2013 to national data for the same year, we classified households in each city by the quintile (fifth) of the national income distribution into which they fell. Jump to the interactive data.

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Some cities are still more unequal than others—an update

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Inequality link for CSPAMore than five years after the end of the Great Recession, and three years since the Occupy movement took on Wall Street, high and growing levels of income inequality continue to animate debates on politics and public policy. A new Brookings Metro report updates a 2014 analysis of income inequality in the 50 largest U.S. cities, and examines in particular trends between 2012 and 2013, the most recent data available from the U.S. Census Bureau. It examines inequality through the lens of household incomes in those cities at the 95th percentile (i.e., the top 5% of earners), the 20th percentile (i.e., the bottom 20% of earners), and the gap between them.

Read the new report>>

 

Mayors Take Aim at Inequality, but is That the Right Target?

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Cross-posted on Brookings’ Metro Blog, The Avenue

Alan Berube

Monday, a special U.S. Conference of Mayors task force released a report documenting growing income disparities in U.S. metro areas. The Cities of Opportunity Task Force is chaired by New York City Mayor Bill DeBlasio and Boston Mayor Marty Walsh, two of the most prominent mayors elected last fall on platforms to reduce inequities within their cities.

The analysis and the mayors’ response to it highlight the difficult situation these leaders face.

The statistics in the report, authored by IHS Global Insight, demonstrate that in most places, inequality is increasing. In about two-thirds of metro areas, average incomes grew faster (or shrank more slowly) than median incomes from 2005 to 2012, suggesting that more income has become concentrated among richer households. Read More

Does Inequality Matter for Mobility? A Metro View

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Cross-posted on Brookings’ Social Mobility Memos blog

Alan Berube

Standard and Poor’s issued a new report this week arguing that high levels of inequality may be retarding U.S. economic growth, moving debates around the effects of inequality further into the mainstream.

The Unresolved Debate about Mobility and Inequality

One particularly contentious axis of the debate about inequality has focused on whether there’s any connection between income inequality and intergenerational mobility. Former chair of President Obama’s Council of Economic Advisers Alan Krueger popularized the Great Gatsby curve, based on research from Miles Corak at the University of Ottawa, which portrays that countries exhibiting higher levels of inequality also experience lower levels of mobility across generations. Read More

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