Wealthy Americans live more separate lives in Southern and Midwestern metros like Memphis and Detroit.

This is the third post in a five-part series on economic segregation in U.S. metros.

The richest Americans—the much-talked about 1 percent—are a cloistered class. As the Nobel Prize-winning economist Joseph Stiglitz scathingly put it, they “have the best houses, the best educations, the best doctors, and the best lifestyles, but there is one thing that money doesn’t seem to have bought: an understanding that their fate is bound up with how the other 99 percent live.” The Harvard political philosopher Michael Sandel has similarly lamented the “skyboxification” of American life, in which “people of affluence and people of modest means lead increasingly separate lives.”   

The substantial and growing gap between the rich and everyone else is increasingly inscribed on our geography. There have always been affluent neighborhoods, gated enclaves, and fabled bastions of wealth like Greenwich, Connecticut; Grosse Pointe, Michigan; Potomac, Maryland; and Beverly Hills, California. But America’s bankers, lawyers, and doctors didn’t always live so far apart from teachers, accountants, and small business owners, who themselves weren’t always so segregated from the poorest, most struggling Americans. My father, a factory worker, raised his family in suburban New Jersey just around the corner from my uncle, who had a management position as the head of research and development at Colgate Palmolive. But that kind of world has disappeared today. As the sociologists Sean Reardon and Kendra Bischoff noted in their 2013 study of economic segregation in America, “During the last four decades, the isolation of the rich has been consistently greater than the isolation of the poor. “

Today, I turn my attention to the geographic segregation of the wealthy. We define wealthy as households with annual incomes of $200,000 or more. To calculate this, my Martin Prosperity Institute (MPI) colleague Charlotta Mellander used an index of dissimilarity developed by sociologists Douglas Massey and Nancy Denton. The index compares the distribution of a selected group of people with all others in that location. The more evenly distributed the wealthy are across tracts compared to the rest of the population, the lower the level of segregation (the Dissimilarity Index ranges from 0 to 1, where 0 reflects no segregation and 1 reflects complete segregation). The MPI’s Zara Matheson mapped the data.

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The map below shows the segregation of wealthy households across U.S. metros. Dark blue reflects metros where the wealthy are the most isolated; lighter blue where they are very isolated; green where they are moderately segregated from the rest of the population; and yellow shows metros where the wealthy are more mixed in or integrated with other segments of the population.

Interestingly, the map shows that the wealthy are more isolated in the Midwest and Sunbelt and relatively less segregated in the more affluent, knowledge-based metros of the East and West Coasts. There is significant wealth segregation in South Florida, where gated communities are common.

The table below shows the ten large metros (those with one million or more people) where the wealthy are the most and least segregated from other economic groups.

Large Metros Where the Wealthy Are Most Geographically Segregated
Rank Metro Index Rank of All Metros
1 Memphis, TN-MS-AR 0.582 5
2 Birmingham-Hoover, AL 0.576 8
3 Louisville/Jefferson County KY-IN 0.575 9
4 San Antonio-New Braunfels, TX 0.567 10
5 Cleveland-Elyria-Mentor, OH 0.560 13
6 Detroit-Warren-Livonia, MI 0.552 17
7 Nashville-Davidson--Murfreesboro--Franklin, TN 0.549 23
8 Columbus, OH 0.547 25
9 Charlotte-Gastonia-Rock Hill, NC-SC 0.541 29
10 Miami-Fort Lauderdale-Pompano Beach, FL 0.540 31

The large metros where the wealthy are most segregated are mainly older industrial metros in the Rustbelt and Sunbelt. Memphis is the metro where the wealthy are most highly segregated, followed by Birmingham, Alabama; Louisville, Kentucky, and San Antonio, Texas. Cleveland and Detroit rank fifth and sixth. Nashville; Columbus, Ohio; Charlotte; and Miami round out the top ten.

When we look at the pattern for all of the United States's 350-plus metros, a number of smaller and medium-sized metros turn out to be the places where the wealthy are the most isolated. Smaller metros take the top four spots and account for six of the ten most segregated metros in the country. Laredo, Texas, ranks first, followed by Jackson, Tennessee; El Paso, Texas; and Great Falls, Montana. Memphis is fifth overall, with Tucson, Arizona and Columbus, Georgia in sixth and seventh. Birmingham, Louisville and San Antonio now drop to eighth, ninth and tenth respectively. Other metros that fall in the top 20 include Tallahassee, Florida (12th); Toledo (14th) and Akron, Ohio (18th); Fresno, California (15th); and Reno, Nevada (20th).

Large Metros Where the Wealthy Are Least Geographically Segregated
Rank Metro Index Rank of All Metros
51 San Jose-Sunnyvale-Santa Clara, CA 0.378 321
50 San Francisco-Oakland-Fremont, CA 0.418 256
49 Washington-Arlington-Alexandria, DC-VA-MD-WV 0.428 243
48 Seattle-Tacoma-Bellevue, WA 0.430 238
47 Hartford-West Hartford-East Hartford, CT 0.431 237
46 Boston-Cambridge-Quincy, MA-NH 0.440 218
45 Providence-New Bedford-Fall River, RI-MA 0.447 211
44 Portland-Vancouver-Hillsboro, OR-WA 0.460 182
43 Minneapolis-St. Paul-Bloomington, MN-WI 0.461 181
42 Sacramento--Arden-Arcade--Roseville, CA 0.462 180

The large metros where the wealthy are least segregated are mainly on the East and West Coasts. They include some of the country's leading high-tech knowledge centers, the places with some of the highest income levels in the nation. San Jose is the metro where the wealthy are least segregated from other segments of the population, followed by nearby San Francisco, D.C., Seattle, Hartford, Boston, Providence, Portland, Minneapolis-St. Paul, and Sacramento. New York ranks 36th of large metros and 117th overall; Chicago ranks 28th of large metros and 83rd overall; L.A. ranks 26th of large metros and 79th overall; and Austin ranks 20th of large metros and 62nd overall.

Though it might seem counterintuitive that the wealthy would be less segregated than the poor in those places, one reason might be that there are enough affluent people to raise the median income very high. The very wealthy don’t push out the merely affluent in such places; often they end up sharing the same tracts. 

But if wealth is relatively less segregated in some large metros than some smaller ones, the divisions between large and small metros are still considerable. There are 45 or so smaller and medium size metros that have lower levels of wealth segregation than San Jose and more than a hundred with lower levels than San Francisco. The places with the lowest levels of wealth segregation are all smaller metros, such as Mankato, Minnesota; Barnstable, Massachusetts on Cape Cod; Warner Robins, Georgia; Fond du Lac, Wisconsin; St. George, Utah; and Kingston, New York.  

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What are the underlying factors that are associated with the geographic segregation of the wealthy?

To get at this Mellander ran a basic correlation analysis between the segregation of wealth and a number of key economic, social and demographic characteristics of metros. As usual, I note that correlation does not equal causation and points only to associations between variables.

The wealthy are more concentrated and segregated in larger metros, according to Mellander’s analysis (the correlation with population size is .38). Housing prices tend to be more expensive in larger metros, and there are more places where only the wealthy can afford to live. Interestingly, the segregation of the wealthy is only modestly associated with density (.17).

The geographic segregation of the wealthy overlaps long-standing racial cleavages. The wealthy are less segregated in metros where white people make up a greater share of the total population (with a negative correlation of -.29). And they are more segregated and geographically isolated in metros with higher shares of black residents (with an even higher positive correlation of .34). The segregation of the wealthy is more modestly associated with the share that is Latino (.15) and not statistically associated with the share that is Asian.

One might think that the segregation of wealthy populations would follow from the overall affluence and economic status of metros. But that does not seem to be the case. In fact, the segregation of the wealthy is negatively associated with per capita incomes across metros, and not statistically associated with average wages or economic output per capita either. In other words, the wealthy do not appear to be any more segregated in more affluent metros.

This seems counterintuitive at first glance, but it perhaps might not be so much of a mystery. One possible explanation could be that, if more people in a metro have relatively high income, the wealthy are a larger group. When there are more wealthy people in a metro, numbers alone will dictate that they will need to live in a larger number of neighborhoods, and they will tend to be more spread throughout the community.

One would think that the segregation of the wealthy would correlate with inequality. But the segregation of the wealthy is modestly related to both income inequality (.28) and wage inequality (.22). Part of this may be due to the simple numerical fact that the uber-wealthy we consider here are very a small group of people.

Interestingly, religion is more closely associated with the segregation of the wealthy than other economic and demographic factors in our analysis. The segregation of the wealthy is greater in metros where a larger share of adults say that religion (as measured by Gallup surveys) plays an important role in their daily lives (the correlation of .41 is among the highest in this analysis). Generally speaking, greater affluence typically goes along with less religiosity and higher levels of secularism. But as the map and tables above show, the wealthy are highly segregated in Southern metros, so this result likely reflects the high religiosity of Southern Bible Belt metros.

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With growing concern today about increased inequality and economic segregation, it’s natural to focus on the deleterious consequences that stem from the concentration of the poor. But the geographic concentration of the advantaged also poses considerable problems for our cities and metro areas. The sociologist William Julius Wilson long ago explained how the out-migration of up-and-coming African-Americans damaged historically black neighborhoods, not only by draining off economic resources but also by taking away local role models and mentors for young people. 

The choices of the advantaged are in many ways a driving force behind economic segregation in America. The wealthy have the resources to colonize the very best neighborhoods and to wall themselves off from the rest of the population. And because of the resources and the influence they can bring to bear, the wealthy are able to mobilize disproportionate shares of community resources for their own neighborhoods. This allows them to invest in better schools, better parks and all manner of services and amenities, leaving fewer public and private resources to flow to less advantaged areas and populations.

The next two posts will look at the segregation of two relatively advantaged groups: highly educated people and the creative class.

Top Image: A mansion in Grosse Pointe, Michigan, a suburb of Detroit, one of the metro areas with the highest rates of wealth segregation (Wikimedia Commons/Umdet)

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