The Rise of Economic Segregation

Increasing income inequality is changing the patterns of where Americans live, according to a new report.

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Pew Research Center

Income inequality has been on the rise in America for several decades now (for complicated reasons that we’ll let Richard Florida explain), and the trend has been starker in some regions of the country, and in some cities, relative to others. Now, however, we are also beginning to see – all the way down to the neighborhood level – that America’s growing gap between the rich and poor is also affecting where (and with whom) we live.

A new report from the Pew Research Center documents that it’s not just income inequality that’s increasing. Residential segregation by income is, too.

"Growing income inequality does not automatically lead to growing residential segregation by income. Conceivably, we could still have a middle class hollowing out but people still living in mixed neighborhoods," says Paul Taylor, one of the report’s authors. Turns out this is not, however, what is happening. As Americans are growing farther apart on the income scale, we are also effectively moving apart from each other within cities, into our own economic enclaves. So why is that? The answer, Taylor says, may lie more in human behavior than economic data.

"We know over the whole entirety of human history that people have a tremendous tendency to cluster among themselves, whether in tribes, whether in nations," Taylor says. "Like attracts like. That’s not always the case for some people who value diversity. But it’s sort of hardwired into human nature."

In 1980, the report found, 85 percent of census tracts in America were either predominantly middle-class or mixed-income (this is a pretty impressive number). As of 2010, that figure had fallen to 76 percent. Today, considerably more upper-income Americans live in neighborhoods where the majority of their neighbors are upper-income, too (18 percent, up from 8 percent in 1980). And lower-income households are increasingly clustered in the same neighborhoods, as well (28 percent, up from 23 percent in 1980).

Combine these two effects, and residential income segregation has been increasing in 27 of the 30 largest cities in the U.S. over the last three decades. Looking at census tracts from 2010, 41 percent of lower-income households in the New York metropolitan area were economically "segregated" in low-income communities. At the other end of the spectrum, Houston has the highest share of upper-income households – at 24 percent – living mostly among their own kind, too. From the report:


(To pause for a note on data: Pew is defining "upper-income" households as those earning more than $104,400 a year, or double the national median income. "Low-income" households are those earning less than $34,000, or two-thirds the national median. Pew also adjusted these thresholds for local cost of living).

Taylor and co-author Richard Fry have also combined these two metrics (the clustering of low-income and upper-income households) into their own Residential Income Segregation Index, which effectively adds the two numbers together. Looked at that way, the most economically segregated large cities in America are all in Texas: San Antonio, Houston, and Dallas top the list (see it in full below).

All three cities have experienced tremendous population growth over the last 30 years. Houston and Dallas have both nearly doubled in size since 1980. Taylor and Fry hesitate to explain why economic segregation varies so dramatically across cities (their metric allows us to say that there’s more than twice as much of it in Dallas as in Orlando). But these Texas cities offer one explanation: Much of the population growth there has been fueled by low-income immigrants and upper-income retirees to the Sun Belt who have fundamentally changed the makeup of the city.

Pew has produced a series of interactive maps of the economic segregation in America’s 10 largest cities. This is what Dallas looks like, with predominantly low-income census tracts in red and upper-income ones in green:

Here’s Houston:

And Philadelphia:

Pew isn’t in the business of coming right out and telling us that we should wring our hands over all this growing economic segregation (and for what it’s worth, America is still more segregated by race than by income, even as those trends move in opposite directions). But it’s hard to interpret this as anything other than bad news.

"I do think it’s appropriate to observe that since the very beginning of our country, our quasi-official motto has been E pluribus unum – out of many, one," Taylor says. "One could make the argument that if increasingly we live among our own kind, whether we measure that by race or ethnicity, by income, by ideology or by partisanship, that may call into question the strength of the unum. We’re doing great on the pluribus.”

Here's the full ranking, and you can find more background on Pew's methodology here:

About the Author

  • Emily Badger is a former staff writer at CityLab. Her work has previously appeared in Pacific StandardGOODThe Christian Science Monitor, and The New York Times. She lives in the Washington, D.C. area.