A new tool reveals cities in which the gap between the highest and lowest earners is smallest.
The size of our cities affects income inequality. Richard Florida has argued many times here at CityLab about how the “skills clustering” that happens in the nation’s largest cities—people with high education levels moving into a small number of highly specialized jobs—tends to produce greater income inequality:
… [H]igh-skill clustering is associated with higher returns and high wages for high-skilled workers—but rising tides don’t necessarily raise all boats. Instead, they find that wage gaps increase and there are fewer jobs for unskilled workers in larger cities. Indeed, their results suggest that city or metro size accounts for a whopping one-third of the increase in wage inequality nationally since 1980.
By contrast, in smaller cities, people make less on average—and the gap between the highest and lowest earners is smaller. The Brookings Institution has produced some of the best research on the “big city” effect, and today, it released an interactive chart that compares household income distribution in some 575 cities nationwide.
Senior Fellow at Brookings’ Metropolitan Policy Program Alan Berube and Communications Officer Alex Friedhoff observe two patterns emerging from the data set: First, in smaller cities, income distribution tends to mirror the nation’s much more closely. Second, regional differences factor into income inequality. The authors write:
[T]he more expansive geography of many Southern and Western cities… enables them to take in more middle-income neighborhoods and households [while] deeper levels of inequality and segregation… have long affected cities and metro areas in the Midwest and Northeast.
The fact that larger cities exhibit greater income inequality isn’t big news. But the authors write that their wide-net comparison of U.S. cities will hopefully bring nuance to the notion of the disappearing middle class, and to portrayals of certain cities as overwhelmingly poor (Baltimore, for example) or as “exclusive enclaves for the wealthy.” Many metros still maintain a relatively large middle class, although they may do so at the expense of a robust economy.
There’s no question that income inequality is a real and dire problem across the country. Rising incomes in large cities do not lift all boats. In response, more and more cities are seriously considering or enacting a $15 minimum wage, which could seriously improve the lives of low-income households in the most expensive cities. But, as Berube has written before:
… local policymakers should not ignore the other tools they have at hand—from education to economic development to housing and zoning policies—that are essential for improving social mobility and sustaining income diversity in big cities today.