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Joel Kotkin

Joel Kotkin, Contributor

I cover demographic, social and economic trends around the world.

Reinventing America
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3/20/2014 @ 4:50PM |58,500 views

Where Inequality Is Worst In The United States

Perhaps no issue looms over American politics more than worsening  inequality and the stunting of the road to upward mobility. However, inequality varies widely across America.

Scholars of the geography of American inequality have different theses but on certain issues there seems to be broad agreement. An extensive examination by University of Washington geographer Richard Morrill found that the worst economic inequality is largely in the country’s biggest cities, as well as in isolated rural stretches in places like Appalachia, the Rio Grande Valley and parts of the desert Southwest.

Morrill’s findings puncture the mythology espoused by some urban boosters that packing people together makes for a more productive and “creative” economy, as well as a better environment for upward mobility. A much-discussed report on social mobility in 2013 by Harvard researchers was cited by the New York Times, among others, as evidence of the superiority of the densest metropolitan areas, but it actually found the highest rates of upward mobility in more sprawling, transit-oriented metropolitan areas like Salt Lake City, small cities of the Great Plains such as Bismarck, N.D.; Yankton, S.D.; Pecos, Texas; and even Bakersfield, Calif., a place Columbia University urban planning professor David King  wryly labeled “a poster child for sprawl.”

Demographer Wendell Cox pointed out that the Harvard research found that commuting zones (similar to metropolitan areas) with less than 100,000 population average have the highest average upward income mobility.

The Luxury City

 Most studies agree that large urban centers, which were once meccas of upward mobility, consistently have the highest level of inequality. The modern “back to the city” movement is increasingly less about creating opportunity rather than what former New York Mayor Michael Bloomberg called “a luxury product” focused on tapping the trickle down from the very wealthy. Increasingly our most “successful cities” have become as journalist Simon Kuper puts it, “the vast gated communities where the one percent reproduces itself.”

The most profound level of inequality and bifurcated class structure can be found in the densest and most influential urban environment in North America — Manhattan. In 1980 Manhattan ranked 17th among the nation’s counties in income inequality; it now ranks the worst among the country’s largest counties, something that some urbanists such as Ed Glaeser suggests Gothamites should actually celebrate.

Maybe not. The most commonly used measure of inequality is the Gini index, which ranges between 0, which would be complete equality (everyone in a community has the same income), and 1, which is complete inequality (one person has all the income, all others none).  Manhattan’s Gini index stood at 0.596 in 2012, higher than that of South Africa before the Apartheid-ending 1994 election. (The U.S. average is 0.471.) If Manhattan were a country, it would rank sixth highest in income inequality in the world out of more than 130 for which the World Bank reports data. In 2009 New York’s wealthiest one percent earned a third of the entire municipality’s personal income — almost twice the proportion for the rest of the country.

The same patterns can be seen, albeit to a lesser extent, in other major cities. A 2006 analysis by the Brookings Institution showed the percentage of middle income families declined precipitously in the 100 largest metro areas from 1970 to 2000.

The role of costs is critical here. A 2014 Brookings study showed that the big cities with the most pronounced levels of inequality also have the highest costs: San Francisco, Miami, Boston, Washington, D.C., New York, Oakland, Chicago and Los Angeles. The one notable exception to this correlation is Atlanta. The lowest degree of inequality was found generally in smaller, less expensive cities like Ft. Worth, Texas; Oklahoma City; Raleigh, N.C.; and Mesa, Ariz. Income inequality has risen most rapidly in the bastion of luxury progressivism, San Francisco, where the wages of the 20th percentile of all households declined by $4,300 a year to $21,300 from 2007-12. Indeed when average urban incomes are adjusted for the higher rent and costs, the middle classes in metropolitan areas such as New York, Los Angeles, Portland, Miami and San Francisco have among the lowest real earnings of any metropolitan area.

Rural Poverty

But cities are not the only places suffering extreme inequality. Some of the nation’s worst poverty and inequality, notes Morrill, exist in rural areas. This is particularly true in places like Texas’ Rio Grande Valley, Appalachia and large parts of the Southwest.

Perhaps no place is inequality more evident than in the rural reaches of California, the nation’s richest agricultural state. The Golden State is now home to 111 billionaires, by far the most of any state; California billionaires personally hold assets worth $485 billion, more than the entire GDP of all but 24 countries in the world. Yet the state also suffers the highest poverty rate in the country (adjusted for housing costs), above 23%, and a leviathan welfare state. As of 2012, with roughly 12% of the population, California accounted for roughly one-third of the nation’s welfare recipients.

With the farm economy increasingly mechanized and industrial growth stifled largely by regulation, many rural Californians particularly Latinos, are downwardly mobile, and doing worse than their parents; native-born Latinos actually have shorter lifespans than their parents, according to a 2011 report. Although unemployment remains high in many of the state’s largest urban counties, the highest unemployment is concentrated in the rural counties of the interior. Fresno was found in one study to have the least well-off Congressional district.

The vast expanse of economic decline in the midst of unprecedented, but very narrow urban luxury has been characterized as “liberal apartheid. ” The well-heeled, largely white and Asian coastal denizens live in an economically inaccessible bubble insulated from the largely poor, working-class, heavily Latino communities in the eastern interior of the state.

Another example of this dichotomy — perhaps best described as the dilemma of being a “red state” economy in a blue state — can be seen in upstate New York, where by virtually all the measurements of upward mobility — job growth, median income, income growth — the region ranked below long-impoverished southern Appalachia as of the mid-2000s. The prospect of developing the area’s considerable natural gas resources was welcomed by many impoverished small landowners, but it has been stymied by a coalition of environmentalists in local university towns and plutocrats and celebrities who have retired to the area or have second homes there, including many New York City-based “progressives.”

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  • takingupspace takingupspace 1 month ago

    Income inequality in the inner cities and elsewhere might be far less if years ago liberals had not made a perversion out of affirmative action.

    “Why affirmative action has failed black families”
    http://malemattersusa.wordpress.com/2012/02/08/why-affirmative-action-has-failed-black-families/

  • Johnnie Linn Johnnie Linn 1 month ago

    Physical mobility, and, as a consequence, income mobility, can be enhanced at low cost by eliminating the monopolies of bus and taxi companies and allowing jitneys and their market equivalents.

  • THAT WAS THE PLAN!

    This is the fallout from the Great Society, wherein America has squandered over $17 TRILLION (some say $21 TRILLION) on anti-poverty programs, the sole purpose (certainly, SOLE OUTCOME) of which, has been to HUGELY degrade the Black American family, and everything that springs from a cohesive and intact family unit!

    How about letting this be a “wake up call” to the underlying issues? How about “waking up” to the FACT that Black-on-Black murder rates are HUGE! How about “waking up” to the FACT that Black-on-Black crime is HUGE! How about “waking up” to the FACT that ONE OUT OF THREE Black men is part of the jail/prison system! How about “waking up” to the FACT that 73% of ALL Black babies are illegitimately born (read that, born into FATHERLESS households)! How about “waking up” to the FACT that many, if not MOST, Black students CHOOSE to perform abysmally at academic achievement in securing a FREE education, paid for by the taxpayers!

    WAKE UP!!!

    WAKE UP, and then take the next step and lay the blame for the FEW OF MANY
    problems within the Black culture that you cited, where they belong! LBJ’s “War on Poverty,” established AFDC MANDATED regulation whereby there could NOT be a man in the house, in order for the woman to fire up her own FREE “government ATM dispenser,” thereby institutionalizing generational dependency and today’s 73% Black illegitimacy rate!

    Why do you suppose, after LBJ enacted the “War on Poverty,” he said, “I’ll have those ni**ers voting Democratic for the next 200 years”?

  • Rex Machina Rex Machina 1 month ago

    “what the Economist has labeled “genetic determinism.””
    Bravo–a timid, but important, first step toward race realism and acknowledgment of human biodiversity. Now if only such honesty could permeate the rest of the media and political establishment before they completely submerge this nation in a sea of permanent lower class aliens.

  • S Peas S Peas 1 month ago

    We need only explore “cultural determinism” not the more controversial genetic determinism: If a person’s culture for 10 generations has neither valued nor offered much formal education for its masses why would merely arriving (illegally) in a First-world, information-work-dominated economy help such a person and his American-born children to advance much beyond junior high or high school, and to move into higher value add jobs? America is mostly a post-industrial economy, most of the descendants of “yeoman farmers” have moved on into offices and computers. Largely because of the legacy of illegal immigration a fair share of inland California is an impoverished disaster, just a reflection of rural Latin American frankly. So are California’s schools that feed the state’s “barbell” economy. This the primary driver of inequality and poverty in the state, which is further worsened by the preference of rich people worldwide to live in California’s desirable coastal climates and sphere of opportunity.