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Economic Segregation and Inequality in Europe's Cities

These are not just American problems.

SoWhat / Shutterstock.com

Americans are well aware of the growing economic inequality playing out in major U.S. cities. So you can forgive them for assuming that things are always much better in European cities, with their larger welfare states and long histories of social democracy. Indeed, my own recent study of the connection between inequality and creativity juxtaposed America’s low-road path—which combines high levels of creativity with high levels of inequality—with the high-road path of Scandinavian and Northern European nations, where high levels of creative competitiveness go along with much lower levels of inequality.

But a new study of 13 leading European cities—London, Amsterdam, Stockholm, Oslo, Vienna, Madrid, Milan, Athens, Budapest, Prague, Riga, Vilnius, and Tallinn—documents a substantial rise in socioeconomic inequality and economic segregation over the past decade or so. The study (part of a broader project on Socio-Economic Segregation in European Capital Cities) tracks socioeconomic inequality and segregation by key markets of socioeconomic class—including income, occupational status, and education—in these cities from 2001 to 2011.

The following graph from the study shows the relationship between income inequality (measured by the Gini coefficient) and residential segregation (measured by the index of dissimilarity) for 12 of these cities. Overall, both economic segregation and income inequality increased in tandem for three quarters of these cities (9 out of 12).

As the chart shows, London and Madrid have some of the highest levels of inequality and economic segregation. Amsterdam, Vienna, and Budapest occupy a middle ground. And Oslo and Prague have some of the lowest levels of economic segregation and inequality.

The three exceptions to the trend of both growing economic segregation and inequality are Tallinn and Oslo—where economic segregation grew, but not inequality—and Amsterdam, where economic segregation declined somewhat between 2001 and 2011 due in part to middle-class families moving out of relatively inexpensive social housing units. Thus, while economic segregation and inequality tend to go together, they don’t always. Stockholm, for example, combines high levels of economic segregation with relatively low levels of inequality.  

Among Europe’s most economically segregated cities, Madrid tops London for the number one spot. The study attributes this spike to the economic crisis in 2008 (which further cemented the locations of poor and wealthy residents) and the late onset of gentrification. Socioeconomic segregation in Madrid is expanding and increasing in the suburbs, where wealthy residents reside, while the poor and disadvantaged remain increasingly concentrated in the city’s central districts.

Overall, socioeconomic segregation in European cities is driven by the advantaged. The study found more affluent and advantaged groups to be more segregated than less advantaged groups in two-thirds of cities. This is similar to my own findings for the United States, where economic segregation is being driven by the locational prerogatives of the most advantaged classes.

Surprisingly, one of the few cities where this is not the case in Europe is London, perhaps because the rampant gentrification and plutocratization of that city is leading to the concentration of the poor in fewer and fewer districts. My own analysis of the city’s class divides shows how the affluent have effectively recolonized the center of London, pushing the poor farther and farther out to the periphery.

Socioeconomic segregation is also shaped and overlaid by race and ethnic difference, according to the study. In Tallinn, for instance, occupational disparities between majority and minority ethnic groups are reflected in housing disparities that divide the city between poor minority and wealthy majority populations. Of course, economic and racial segregation are also deeply intertwined in the United States. But the study suggests that race and ethnicity still divide European cities, even with their very different histories.

Urban scholars have long argued that even though racial and ethnic differences vary widely across cities and nations, they ultimately reinforce fundamental class divides. That said, the authors caution against generalizing these effects for all cities. “In some cases,” they write, “social distances between social classes within the category non-natives were even bigger than social distances within the category natives.”

By and large, the study concludes that the increasingly divided European city is a consequence of globalization and structural shifts in the economy, which have hollowed out the high-paying middle of the economy, divided economic classes, and sorted them into desired and undesired neighborhoods. In addition to this, growing inequality and segregation are the result of shifts in welfare and housing policy, which have not kept up with the rising economic pressures on cities and the growing socioeconomic divides. In short, segregation and inequality are not just a result of basic economic forces—they are also a consequence of policy choices.

Inequality and segregation are the key urban issues of our time, and the vexing challenge for cities is how to overcome them—or at least cope with them—in ways that do not inhibit the underlying engine of innovation and economic growth. Mayors and cities can do a lot, but they cannot meet this challenge on their own. Dealing with growing inequality and economic segregation will require more than local action—it will require a renewed commitment to national urban policy.

This study drives home the point that segregation and inequality are not just a special circumstance of American cities, but are instead built into the very structure of cities and metro areas themselves. The growth of inequality and segregation in European cities—especially ones seen as paragons of greater equality and social democracy—indicates that they are deep-seated features of our increasingly spiky and divisive process of re-urbanization, not just a bug of some cities.

Top image: SoWhat / Shutterstock.com

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