Tags: economy | Brookings Institution | inequality

Study: Income Inequality Higher in Prospering Cities

Thursday, 20 Feb 2014 10:47 AM

By Melanie Batley

Liberal politicians in a number of cities across the country, such as New York, are taking steps to address rising income inequality, but new research reveals that inequality often accompanies economic vibrancy.

According to a study released Thursday by the Brookings Institution, in the 50 largest U.S. cities in 2012 a high-income household earned about 11 times as much as a low-income household. This compares to a national ratio of nine to one.

"More equal cities — they're not home to the sectors driving economic growth, like technology and finance," Alan Berube, the author of the report, told The New York Times.

"These are places that are home to sectors like transportation, logistics, warehousing," he said, adding, "In terms of actual per capita income growth, these are not places that would be high up the list."

Low-inequality cities, according to the study, tend to be located in the South and Midwest.

The research also suggests that current levels of inequality have been driven more by the poor getting poorer than the rich getting richer. Many are still struggling with unemployment and debt as a result of the recession, the report says.

"High-income households did not lose much ground during the recession," Berube said.
"Low-income households lost ground and haven't gained it back. And the pressures around cost of living are higher at the low end than they are at the high end."

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