As America comes to grips with its growing income inequality, which has proliferated over the last three decades, the time has come to also take a look at the changing geography of income distribution. What does it mean for those searching for a good place to live, work, and play?
Different industries are concentrated in different places, and some industries have fared better than others over the past three decades. Manufacturing, for example, has not done as well as, say, financial services — have you heard?
And as a result, the places that support these industries will see changes in their share of the nation’s income — Detroit has emptied out quite dramatically, while Brooklyn has seen a renaissance unlike maybe any other American city in recent memory.
Census Report Shows Interesting Trends
An interesting Census report came out this week, which examined income inequality as it compares to places. Using a measure called the Gini coefficient, which measures income inequality on a scale of 0.0 to 1.0, where 1.0 represents perfect inequality (one household has all the income) and 0.0 represents perfect equality (all households earn the same amount). What they found is not exactly surprising, but definitely telling of the effects of the last few decades’ economic changes.
Between 2005 and 2009, the report found that the United States’ Gini index score was 0.467, or roughly equivalent to Ecuador, El Salvador, Mozambique, Philippines, and Rwanda (!!!). The European Union, by contrast, has a Gini index of about 0.304.
Eight metropolitan areas were found to have a higher Gini index than the United States as a whole, while every other metropolitan area in the nation was either equal to the nationwide score or below; to be exact, five metro areas were equal to the US score (Chicago was the most similar to the average, which seems obvious now that I know it), and 38 below the average.
Among the most unequal metro areas are: New York, the San Francisco Bay Area (not including Silicon Valley), Los Angeles, Miami, and Houston — some of the most expensive cities in the country with the best economies. Perhaps this isn’t surprising. The top eight also account for about 50.2 million, or about one-sixth of the country’s population — maybe this shouldn’t be surprising either.
As the driving forces in our economic growth over the last three decades has routed the majority of income growth into the hands of the top 1%, it should hold that these people would be living in the cities that house thriving industries — and that the inequality itself would be spatially concentrated. That’s straightforward enough, but it offers little in the way of advice for young college graduates who might want to know where they should live to start their careers.
Where Should You Go?
In fact, this presents a bit of a conundrum for young professionals. Most of the cities with highest inequality are also drivers of growth, and as such they make popular launchpads for those seeking successful careers. On the other hand, they are quite expensive to live in, on the whole — LA, Miami, San Francisco and New York are all some of the most expensive cities for renters in the US.
This can make for something of a trap: find an average-paying job in New York and you might be worse off than your friend in Cincinnati who earns the same salary as you. But they live in a city famous for putting chili on spaghetti and you live in New York — so what’s the answer here?
I’m from California and I have always had aspirations to live in a run-down Midatlantic or Midwestern city (used to be Philadelphia, but now I long for Pittsburgh), or some place that is less cosmopolitan and more honestly American than California or New York — what some people call “Good Value Cities”. And yet here I am in Brooklyn, paying what would be the monthly note on a home in Pittsburgh (I’ve checked) on my rent every month.
If there’s anything one can say is good about income inequality, it’s that it makes for more exciting places to live. Want to live in the city with the most fairly-distributed income? Go West to Salt Lake City, where you’ll have to jump through legal hoops just to have a beer. Otherwise, income inequality is (currently) a fact of life in America’s more dynamic cities, and you’ll pay the price to have a shot at climbing the ladder.
As much as I hate to say it, Pittsburgh can wait.