WASHINGTON (AP) — The gap between the wealthy and the
poor is most extreme in several of the United States’ most prosperous
and largest cities.
The economic divides in Atlanta, San
Francisco, Washington, New York, Chicago and Los Angeles are
significantly greater than the national average, according to a study
released last week by the Brookings Institution, the Washington-based
think tank. It suggests that many sources of both economic growth and
income inequality have co-existed near each other for the past 35 years.
These
cities may struggle in the future to provide adequate public schooling,
basic municipal services because of a narrow tax base and "may fail to
produce housing and neighborhoods accessible to middle-class workers and
families," the study said.
"There’s something of a relationship
between economic success and inequality," said Alan Berube, a senior
fellow at Brookings. "These cities are home to some of the highest
paying industries and jobs in the country."
At the same time,
Berube noted, many of these cities may inadvertently widen the gap
between rich and poor because they have public housing and basic
services that make them attractive to low-wage workers.
The
findings come at a delicate moment for the country, still slogging
through a weak recovery from the Great Recession. Much of the nation’s
job growth has been concentrated in lower-wage careers. Few Americans
have enjoyed pay raises. President Barack Obama is pushing for a higher
minimum wage. Protesters in San Francisco have tried to block a private
bus that shuttles Google employees from gentrifying neighborhoods to
their offices in Silicon Valley.
Many wealthy Americans, from
venture capitalist Tom Perkins to real estate billionaire Sam Zell,
argue that the nation has tipped toward class warfare.
Incomes for
the top 5 percent of earners in Atlanta averaged $279,827 in 2012.
That’s almost 19 times more than what the bottom 20 percent of that
city’s population earned. This ratio is more than double the nationwide
average for this measure of income inequality. The top 5 percent of
earners across the country have incomes 9.1 times greater than the
bottom quintile.
Major chasms also appeared in the tech hub of San
Francisco, the financial center of New York, the seat of the federal
government in Washington and the home of the entertainment industry in
Los Angeles.
"In San Francisco, skyrocketing housing costs may
increasingly preclude low-income residents from living in the city
altogether," the study said.
San Francisco Mayor Ed Lee said in an
editorial published last week that "working families cannot support
themselves on the (city’s) current minimum wage of $10.74 per hour" —
already $3.49 above the federal minimum and 64 cents more than Obama’s
proposed increase. Lee has also announced plans to build and restore
10,000 homes for low and moderate-income families by 2020.
Not all tech hubs have witnessed rising inequality.
Seattle,
where Amazon and Microsoft are based, saw its income disparity decline
since 2007. So did Denver. Austin, Texas, experienced a mild uptick.
"Both
the tech boom and energy boom are inequality-reducing," said Michael
Mandel, chief economic strategist at the Progressive Policy Institute in
Washington. "Tech introduces a path to good jobs."
The Brookings
study also found that inequality increased across cities even though
incomes often fell for wealthy households between the start of the
recession in 2007 and 2012.
During that five-year period, average
incomes for the top 5 percent in Jacksonville, Fla., tumbled $18,999 to
$152,329. But the bottom 20 percent living in Jacksonville lost a
greater share of their incomes over that period, so the level of
inequality increased.
Significant gaps also exist in Miami and
Baltimore. But that’s largely because their poorest residents there earn
so little. The lowest quintile of Miami residents earned just $10,348
in 2012, about half the national average for that group.
Of the
nation’s 50 biggest cities, just 18 experienced greater income
inequality since the recession that was statistically significant. That
was due primarily to falling incomes for the poorest residents. This
occurred in places that suffered from the burst of the housing bubble —
such as Tucson, Ariz., and Albuquerque — and Midwestern cities still
reeling from the collapse of manufacturing such as Cleveland,
Indianapolis and Milwaukee.
Not all the 50 largest cities are
bastions of inequality. Some Western and Sun Belt cities with smaller
downtowns had a noticeably smaller divide than the national average.
These cities such as Mesa, Ariz., and Arlington, Texas, are essentially
"overgrown suburbs," the study said. They tend to attract neither the
highest-paying jobs nor the extreme poverty of the older cities.
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