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Date: 2024-09-12 Page is: DBtxt001.php txt00017829

Inequality
Key trends in US urban centers

Watch 4 Decades of Inequality Drive American Cities Apart ... The biggest metropolitan areas are now the most unequal.

Burgess COMMENTARY

Peter Burgess


Watch 4 Decades of Inequality Drive American Cities Apart ... The biggest metropolitan areas are now the most unequal.

In 1980, highly paid workers in Binghamton, N.Y., earned about four and a half times what low-wage workers there did. The gap between them, in a region full of I.B.M. executives and manufacturing jobs, was about the same as the gap between the workers near the top and the bottom in metro New York.

Since then, the two regions have diverged. I.B.M. shed jobs in Binghamton. Other manufacturing disappeared, too. High-paying work in the new knowledge economy concentrated in New York, and so did well-educated workers. As a result, by one measure, wage inequality today is much higher in New York than it is in Binghamton.

Ratio of 90th-percentile wages to 10th-percentile wages in 195 metro areas

↑ MORE INEQUALITY 100,000 200,000 500,000 1m 2m 5m 10m 15m 3.5 4.0 4.5 5.0 5.5 6.0 6.5 7.0 7.5 8.0 8.5 9.0 9.5 New York New York Los Angeles Los Angeles Chicago Chicago Dallas Dallas Houston Houston Philadelphia Philadelphia Washington, D.C. Washington, D.C. Miami Miami Atlanta Atlanta San Francisco San Francisco Boston Boston Phoenix Phoenix Riverside, Calif. Riverside, Calif. Detroit-Warren-Dearborn Detroit-Warren-Dearborn Seattle Seattle Minneapolis-St. Paul Minneapolis-St. Paul San Diego-Carlsbad San Diego-Carlsbad Tampa-St. Petersburg-Clearwater Tampa-St. Petersburg-Clearwater Denver-Aurora-Lakewood Denver-Aurora-Lakewood St. Louis St. Louis Baltimore-Columbia-Towson Baltimore-Columbia-Towson Charlotte-Concord-Gastonia Charlotte-Concord-Gastonia Portland-Vancouver-Hillsboro Portland-Vancouver-Hillsboro Orlando-Kissimmee-Sanford Orlando-Kissimmee-Sanford San Antonio-New Braunfels San Antonio-New Braunfels Pittsburgh Pittsburgh Sacramento--Roseville--Arden-Arcade Sacramento--Roseville--Arden-Arcade Kansas City Kansas City Las Vegas Las Vegas Cincinnati Cincinnati Cleveland-Elyria Cleveland-Elyria Austin-Round Rock Austin-Round Rock Indianapolis Indianapolis Nashville Nashville Columbus Columbus San Jose San Jose Salt Lake City Salt Lake City Virginia Beach-Norfolk-Newport News Virginia Beach-Norfolk-Newport News Providence-Warwick Providence-Warwick Milwaukee-Waukesha-West Allis Milwaukee-Waukesha-West Allis Greensboro Greensboro Oklahoma City Oklahoma City Jacksonville Jacksonville Raleigh Raleigh New Orleans-Metairie New Orleans-Metairie Louisville/jefferson County Louisville/jefferson County Richmond Richmond Greenville Greenville Memphis Memphis Hartford-West Hartford-East Hartford Hartford-West Hartford-East Hartford Buffalo-Cheektowaga-Niagara Falls Buffalo-Cheektowaga-Niagara Falls Birmingham-Hoover Birmingham-Hoover Rochester Rochester Omaha-Council Bluffs Omaha-Council Bluffs Tucson Tucson Urban Honolulu Urban Honolulu Fresno Fresno Fairfield, Conn. Fairfield, Conn. Knoxville Knoxville Dayton Dayton Worcester Worcester Grand Rapids-Wyoming Grand Rapids-Wyoming Albuquerque Albuquerque Bakersfield Bakersfield New Haven-Milford New Haven-Milford Oxnard-Thousand Oaks-Ventura Oxnard-Thousand Oaks-Ventura Albany-Schenectady-Troy Albany-Schenectady-Troy Mcallen-Edinburg-Mission Mcallen-Edinburg-Mission El Paso El Paso Allentown-Bethlehem-Easton Allentown-Bethlehem-Easton Baton Rouge Baton Rouge Columbia Columbia Sarasota Sarasota Charleston-North Charleston Charleston-North Charleston Stockton-Lodi Stockton-Lodi Akron Akron Little Rock-North Little Rock-Conway Little Rock-North Little Rock-Conway Harrisburg Harrisburg Cape Coral-Fort Myers Cape Coral-Fort Myers Boise City Boise City Colorado Springs Colorado Springs Des Moines-West Des Moines Des Moines-West Des Moines Syracuse Syracuse Lakeland-Winter Haven Lakeland-Winter Haven Toledo Toledo Jackson Jackson Deltona-Daytona Beach-Ormond Beach Deltona-Daytona Beach-Ormond Beach Wichita Wichita Spokane-Spokane Valley Spokane-Spokane Valley Springfield Springfield Provo-Orem Provo-Orem Palm Bay-Melbourne-Titusville Palm Bay-Melbourne-Titusville Youngstown-Warren-Boardman Youngstown-Warren-Boardman Lafayette Lafayette Modesto Modesto Augusta-Richmond County Augusta-Richmond County Lancaster Lancaster Chattanooga Chattanooga Portland-South Portland Portland-South Portland Asheville Asheville Santa Rosa Santa Rosa Scranton-Wilkes-Barre-Hazleton Scranton-Wilkes-Barre-Hazleton Salinas Salinas Corpus Christi Corpus Christi Pensacola-Ferry Pass-Brent Pensacola-Ferry Pass-Brent Fayetteville-Springdale-Rogers Fayetteville-Springdale-Rogers Lansing-East Lansing Lansing-East Lansing Visalia-Porterville Visalia-Porterville Anchorage Anchorage Reno Reno Santa Maria-Santa Barbara Santa Maria-Santa Barbara York-Hanover York-Hanover Brownsville-Harlingen Brownsville-Harlingen Shreveport-Bossier City Shreveport-Bossier City Huntsville Huntsville Reading Reading Mobile Mobile Springfield Springfield Hickory-Lenoir-Morganton Hickory-Lenoir-Morganton Canton-Massillon Canton-Massillon Beaumont-Port Arthur Beaumont-Port Arthur Kalamazoo-Portage Kalamazoo-Portage Montgomery Montgomery Trenton Trenton Fort Wayne Fort Wayne Eugene Eugene Ann Arbor Ann Arbor Manchester Manchester Ocala Ocala Biloxi Biloxi Rockford Rockford Roanoke Roanoke Fort Collins Fort Collins Fayetteville Fayetteville Clarksville Clarksville Lincoln Lincoln Lubbock Lubbock Erie Erie Wilmington Wilmington Santa Cruz-Watsonville Santa Cruz-Watsonville Utica-Rome Utica-Rome Norwich-New London Norwich-New London Olympia-Tumwater Olympia-Tumwater Atlantic City-Hammonton Atlantic City-Hammonton Lynchburg Lynchburg Gainesville Gainesville Bremerton-Silverdale Bremerton-Silverdale Amarillo Amarillo Yakima Yakima Waco Waco Binghamton, N.Y. Binghamton, N.Y. Chico Chico Topeka Topeka Tyler Tyler Tuscaloosa Tuscaloosa Burlington-South Burlington Burlington-South Burlington Medford Medford Bellingham Bellingham Champaign-Urbana Champaign-Urbana Florence Florence Elkhart-Goshen Elkhart-Goshen Springfield Springfield Charleston Charleston Racine Racine Saginaw Saginaw Lafayette-West Lafayette Lafayette-West Lafayette Redding Redding Joplin Joplin Columbia Columbia Bloomington Bloomington Muskegon Muskegon Yuba City Yuba City Oshkosh-Neenah Oshkosh-Neenah Janesville-Beloit Janesville-Beloit State College State College Odessa Odessa Jackson Jackson Monroe Monroe Eau Claire Eau Claire Pueblo Pueblo Niles-Benton Harbor Niles-Benton Harbor Johnstown Johnstown Wausau Wausau Wichita Falls Wichita Falls Glens Falls Glens Falls Mansfield Mansfield St. Joseph St. Joseph Muncie Muncie Anniston-Oxford-Jacksonville Anniston-Oxford-Jacksonville Sheboygan Sheboygan Kankakee Kankakee Decatur Decatur Lima Lima Gadsden Gadsden Parkersburg-Vienna Parkersburg-Vienna In 2015

METRO POPULATION →

Dots represent metro areas; names are shortened for clarity.·Analysis of census and American Community Survey data by Jaison Abel and Richard Deitz, Federal Reserve Bank of New York What has happened over the last four decades is only partly a story of New York’s rise as a global hub and Binghamton’s struggles. Economic inequality has been rising everywhere in the United States. But it has been rising much more in the booming places that promise hefty incomes to engineers, lawyers and innovators. And those places today are also the largest metros in the country: New York, Los Angeles, San Francisco, San Jose, Houston, Washington.

This chart, using data from a recent analysis by Jaison Abel and Richard Deitz of the New York Fed, captures several dynamics that have remade the U.S. economy since 1980. Thriving and stagnant places are pulling apart from each other. And within the most prosperous regions, inequality is widening to new extremes. That this inequality now so clearly correlates with city size — the largest metros are the most unequal — also shows how changes in the economy are both rewarding and rattling what we have come to think of as “superstar cities.”

In these places, inequality and economic growth now go hand in hand.

Back in 1980, Binghamton’s wage inequality made the region among the most unequal in the country, according to the Fed analysis. It ranked 20th of the 195 metros shown here as measured by comparing the wages of workers at the 90th percentile with those at the 10th percentile of the local wage distribution, a measure that captures the breadth of disparities in the local economy without focusing solely on the very top. In 1980, New York City was slightly less unequal, ranking 44th by this measure.

Forty years ago, none of the country’s 10 largest metros were among the 20 most unequal. By 2015, San Francisco, New York, Houston, Los Angeles, Dallas and Washington had jumped onto that list, pulled there by the skyrocketing wages of high-skilled workers. Binghamton over the same period had become one of the least unequal metros, in part because many I.B.M. executives and well-paid manufacturing workers had vanished from its economy.

In effect, something we often think of as undesirable (high inequality) has been a signal of something positive in big cities (a strong economy). And in Binghamton, relatively low inequality has been a signal of a weak economy. (The Fairfield-Bridgeport, Conn., metro stands out in either era because the deep poverty of its urban core is surrounded by particularly rich suburbs.)

These patterns are hard to reconcile with appeals today for reducing inequality, both within big cities and across the country. What are Americans supposed to make of the fact that more high-paying jobs by definition widen inequality? Should New Yorkers be O.K. with growing inequality in New York if it’s driven by rising wages for high-skilled workers, and not falling wages for low-skilled ones?

“That’s more of a political question,” said Nathaniel Baum-Snow, an economist at the University of Toronto. “That’s a question of what we decide our values should be as a society.”

Tom VanHeuvelen, a sociologist at the University of Minnesota who has also researched these patterns, said: “It seems obvious to me that it doesn’t need to be the way that it is right now. This isn’t the only inevitable outcome we have when we think about the relationship between cities, affluence and inequality.”

Economists say that the same forces that are driving economic growth in big cities are also responsible for inequality. And those forces have accumulated and reinforced each other since 1980.

High-skilled workers have been in increasing demand, and increasingly rewarded. In New York, the real wages for workers at the 10th percentile grew by about 15 percent between 1980 and 2015, according to the Fed researchers. For the median worker, they grew by about 40 percent. For workers at the 90th percentile, they nearly doubled.

That’s partly because when highly skilled workers and their firms cluster in the same place today, they’re all more productive, research shows. And in major cities, they’re also tied directly into the global economy.

“If you’re someone who has skills for the new economy, your skills turn out to be more valuable in bigger cities, in a way that wasn’t true 30 to 40 years ago,” Mr. Baum-Snow said.

It’s no surprise, then, that high-skilled workers have been sorting into big, prosperous cities, compounding the advantages of these places (and draining less prosperous places of these workers).

At the same time, automation, globalization and the decline of manufacturing have decimated well-paying jobs that once required no more than a high school diploma. That has hollowed out both the middle class in big cities and the economic engine in smaller cities. The result is that changes in the economy have disproportionately rewarded some places and harmed others, pushing their trajectories apart.

Add one more dynamic to all of this: Inequality has been rising nationally since the 1980s. But because the Bay Area and New York regions already had more than their fair share of one-percenters (or 10 percenters) in 1980, the national growth in income inequality has been magnified in those places.

“We’ve had this pulling apart of the overall income distribution,” said Robert Manduca, a Ph.D. student in sociology and social policy at Harvard who has found that about half of the economic divergence between different parts of the country is explained by trends in national inequality. “That overall pulling apart has had very different effects in different places, based on which kinds of people were already living in those places.”

Mr. Manduca says national policies like reinvigorating antitrust laws would be most effective at reducing inequality (the consolidation of many industries has meant, among other things, that smaller cities that once had company headquarters have lost those jobs, sometimes to big cities).

It is hard to imagine local officials combating all these forces. Increases to the minimum wage are likely to be swamped — at least in this measure — by the gains of workers at the top. Policies that tax high earners more to fund housing or education for the poor would redistribute some of the uneven gains of the modern economy. But they would not alter the fact that this economy values an engineer so much more than a line cook.

“If you brought the bottom up, it would be a better world,” said Richard Florida, a professor at the University of Toronto who has written extensively about these trends. “But you’d still have a big rise in wage inequality.”
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Emily Badger writes about cities and urban policy for The Upshot from the Washington bureau. She's particularly interested in housing, transportation and inequality — and how they're all connected. She joined The Times in 2016 from The Washington Post. @emilymbadger

Kevin Quealy is a graphics editor and reporter. He writes and makes charts for The Upshot about a range of topics, including sports, politics, health care and income inequality. @KevinQ

A version of this article appears in print on Dec. 3, 2019, Section B, Page 1 of the New York edition with the headline: Big Cities Have Prospered, But Inequality Has Soared. Order Reprints | Today’s Paper | Subscribe

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