Richard Florida is a co-founder and editor at large of CityLab and a senior editor at The Atlantic. He is a university professor in the University of Toronto’s School of Cities and Rotman School of Management, and a distinguished fellow at New York University’s Schack Institute of Real Estate and visiting fellow at Florida International University.
The economic gap between have and have-not places continues to widen.
It’s not just economic inequality—the gap between the rich and the poor—that is growing ever wider. Geographic inequality, the divide between rich and poor places, is too.
The EIG report, released earlier this week, uses data on income, jobs, business dynamism, educational attainment, unemployment, vacant housing, and poverty, to track the performance of thousands of zip codes across America over two periods, 2007 to 2011 (defined by the study as the recession) and 2012 to 2016 (recovery). They combine these key measures into a Distressed Communities Index (DCI).
Their analysis confirms the decline of America’s once-sturdy middle-class neighborhoods, and the splitting of the nation into areas of concentrated advantage, juxtaposed with areas of concentrated disadvantage.
Fewer than 40 percent of Americans, 120 million or so, live in middle-class neighborhoods which the study’s authors classify as “comfortable” and “mid-tier.” Another third, 106 million people, live in “at-risk” or “distressed” communities. An advantaged quarter or so of Americans, 86 million, live in affluent, “prosperous” neighborhoods. Furthermore, the gap between advantaged and disadvantaged neighborhoods has increased in the past decade or so.
America’s rising neighborhood inequality is etched into its broader economic geography. The greatest concentrations of affluent neighborhoods were found in the North and East, especially around bicoastal superstar cities, with the South and East being home to the largest concentrations of distressed communities. Utah had the largest percentage of its population living in a prosperous neighborhood—about half—while California saw the greatest upward shift, with the number of residents in prosperous neighborhoods growing by more than three million.
Meanwhile, Alabama, Arkansas, Mississippi, Louisiana, New Mexico, and West Virginia, had the largest concentrations of distressed neighborhoods, with the latter three seeing the greatest rise in the share of their populations living in distressed communities.
The change in the prosperity of a zip code over the periods studied, also varied by whether the area was rural, suburban, or urban. Suburban neighborhoods were the most stable, with 61 percent of suburban zip codes experiencing no change in their DCI quintile over the two periods studied. Slightly fewer than a fifth of suburban neighborhoods moved downward, and 21 percent were upwardly mobile.
A slightly smaller share of urban neighborhoods had no change, with an even greater share being upwardly mobile (a reflection of the back-to-the-city movement and commensurate with gentrification) and an even smaller share was downwardly mobile. Rural areas were the most unstable or volatile: 30 percent experienced downward mobility, 27 percent experienced upward mobility, and just roughly 40 percent were stable. Here the study notes that, “the rungs on the ladder of community well-being are farther apart for city and suburban zip codes; for rural zip codes, they may be closer together—but they are also more slippery.”
Spatial inequality in American reflects its widening class and racial divides. Prosperous neighborhoods have larger concentrations of the creative class, while distressed neighborhoods have much larger concentrations of blue-collar workers. Distressed neighborhoods had much larger concentrations of racial minorities. As the study notes, non-white groups made up more than 55 percent of the population of distressed neighborhoods while making up less than 40 percent of the population as a whole. Whites, on the other hand, make up roughly three-quarters of the residents of prosperous neighborhoods.
A recent study from The Hamilton Project of Brookings Institution, sounds similar themes. It tracks spatial inequality over the years 1960 to 2016. To do so, it examines the performance of all 3,000-plus U.S. counties on indicators of income, poverty, life expectancy, vacant housing, and more, which it combines into an overall “Vitality Index” of its own.
Taking an even longer view, the study shows how the economic performance of different parts of the United States has diverged in recent years. In other words, after years of richer and poorer areas edging closer to each other in terms of economic performance, the trend has reversed since 1980. You can see the lines of the chart come together between 1960 to 1980 and then grow apart thereafter. This is true of each and every region of the country, east coast and west coast, Rust Belt and Sun Belt, and parts in between.
The result is a resurgence of geographic inequality. Today, median household income for the top 20 percent of America’s counties is more than twice as high as the median household income of the bottom 20 percent, while poverty rates are roughly three times greater in the poorest 20 percent of counties, compared to the most affluent 20 percent.
This economic divide can be clearly seen in their map which charts the changes in the overall Vitality Index over the past three-and-a-half decades. Blue indicates high levels of economic performance while orange reflects low levels of economic performance. The picture it shows is one of an economically divided nation, with areas high on the Vitality Index in and around the Boston-New York-Washington D.C. Corridor, in the San Francisco Bay Area and Los Angeles, and the Pacific Northwest, as well as places like Denver, Raleigh, Austin, and Atlanta in the Sun Belt. On the other side of the equation, huge areas of the Midwest, Southwest, and South, lag far behind economically
In some respects, economic vitality has simply compounded over this time. If a county was doing well 30 or 40 years ago, it tends to do well today. Almost 60 percent of counties that ranked in the top 20 percent on economic performance in 1980 did so in 2016, and nearly 90 percent of the top 40 percent of high-performing counties are the same today as they were back in 1980. If a county was doing poorly in 1980 then it also tends to perform poorly today. More than 70 percent of counties in the bottom 20 percent on economic performance in 1980 remained there in 2016, and more than 90 percent of the poorest 40 percent of counties stayed there as well. And the counties that have done well have been those with more college grads and more highly educated populations, higher levels of density, higher rates of innovation, and less dependence on manufacturing back in 1980.
But economic performance has also varied significantly across the various regions of the country. In addition to increasing vitality in the big cities and knowledge hubs of the coasts, the energy-producing regions of Texas and the Dakotas saw significant improvements in economic vitality. The Rust Belt-particular counties in Michigan, Ohio, Pennsylvania, and Indiana, saw significant declines in economic vitality. Generally speaking, Rust Belt counties saw their economic performance fall from around the national average for vitality in 1980, to far below it by 2016.
The Brookings Institution research also reinforces the role of race in America’s growing spatial inequality. A second and related study uses data on economic mobility in U.S. counties from Raj Chetty and his colleagues to trace the connection between race and spatial inequality.
The study documents particularly low levels of economic mobility for black children who grow up in predominantly black communities. While black households tend to be located in low-income places, these places also have lower levels of economic mobility, which can intensify regional inequality from one generation to the next. This is in line with findings from a huge body of literature in sociology from scholars like William Julius Wilson, Robert Sampson, and Patrick Sharkey, that document the way in which many black children and families live in areas of concentrated poverty and disadvantage.
And these racial differences in inequality and mobility are compounded by significant differences in where black and white people live across the various regions of the country. Across the country, whites are over-represented in smaller metros and rural areas, while blacks are over-represented in the urban center of large cities and metro areas. But, these patterns differ markedly by region of the country. Metropolitan areas are home to 99 percent of blacks in the Northeast and 96 percent of blacks in Midwest. But in the South, white and black households are about equally likely to live in metropolitan areas. Furthermore, the disproportionate concentration of black households in the urbanized manufacturing areas of the Midwest and South, have disproportionately hurt their economic prospects.
Indeed, the connection between race and spatial inequality has long historical roots. The study points out that the same counties with high concentrations of the black population today are virtually the same counties that had large concentrations of the black population before the Civil War. Spatial inequality thus reflects the long history of racial subjugation running from slavery, Reconstruction, and Jim Crow, to the present.
America is not only economically unequal: Its inequality cuts sharply across geographic lines. We are becoming a country of have and have-nots that turns on where we were born or where we are able to live. And this worsening winner-take-all geography is bound up with, and reflects, our long running divides of race and class. Increasingly, our neighborhood, and our zip code, is our economic destiny.
CityLab editorial fellow Nicole Javorsky provided research and editorial assistance for this article.