Inequality is higher in most metropolitan areas today than it was in 2007, according to a new study by The Brookings Institution.
Alan Berube, senior fellow and deputy director of the Metropolitan Policy Program, and Natalie Holmes, senior research assistant, examine the difference between incomes near the top of the distribution—for households earning more than 95% of all other households—and those closer to the bottom of the distribution—for households earning more than only 20% of all other households. It measures the gap between the two using what they call the “95/20 ratio.” The researchers write:
The large metropolitan areas with the highest levels of income inequality in 2014 included some usual suspects, but also a couple surprises. The Bridgeport area—equivalent to the New York suburb of Fairfield County, Conn.—led the list, largely due to the very high incomes registered by its top earners (at least $560,000 for the top 5% of households). Two nearby metro areas—Greater New York and New Haven—also landed in the top 10, as did Northeast neighbor Boston. On the West Coast, both the San Francisco and Los Angeles metro areas also exhibited high levels of income inequality. So did the Southern metro areas of New Orleans, Miami, and Houston, the former two largely due to the low incomes earned by their poorer households (below $20,000 in both cases).
Overall, in cities and metro areas where inequality is higher, housing for lower-income households is less affordable. This pattern reflects in part the very low incomes poor households earn in places like Cincinnati, St. Louis, Cleveland, and Hartford. Those low incomes not only produce high inequality measures in those cities, but also tend to make their housing unaffordable to poor households, even though their local housing is inexpensive relative to other cities. Yet lower-income households in cities such as Washington, Los Angeles, New York, and Chicago also face clear affordability challenges even though they earn higher incomes than their counterparts in most other cities.
For more information, dig into the new report.