INNOVATION

These Maps Help Explain the Numerous, Complicated Factors Behind Income Inequality

Education, housing costs and even internet access are all a part of the difficult public policy matter

July 17, 2015

Catapulted into the spotlight in recent years, the gap between wealthy Americans and poor Americans has been a consistent ailment and a theme throughout United States history. And while it might seem like a particularly 21st century problem, the roots of income inequality have been steadily growing for decades. According to the Economic Policy Institute, between 1979 and 2007, the bottom 99 percent of households saw their incomes grow by an average of 18.9 percent, while the top 1 percent saw incomes balloon by 200.5 percent. In 2008, incomes across the country took a hit, but as the economy began to recover, the richest households again saw the greatest gains. By 2012, income inequality had climbed to levels that nearly matched those seen right before the Great Depression.

There is no single cause of income inequality. The National Bureau of Economic Research calls it “one of the biggest socioeconomic questions in America today.” But even as its causes continue to baffle academics and policymakers, its impact can be seen every day across the country, from the public transportation system in Boston to the quality of public schools in Los Angeles.

The maps below are case studies, each identifying one of the many causes of income inequality and how it manifests itself in the selected city. While the maps highlight the striking divides of today, they cannot begin to touch on the many historical factors (including redlining and other racist or ill-conceived public policies) that affected the current divide between the rich and poor. But they do, hopefully, offer a multi-faceted look at how society perpetuates income inequality today.

Boston

Boston has the third-highest rate of income inequality in the country, with the top 5 percent of households earning 15 times more than the bottom 20 percent's highest-earning households in 2013. Geographically, wealth is relatively concentrated in the city center, and few low-income families reside within the city proper: most live in the northern or southern suburbs or in Boston neighborhoods like Roxbury or Dorchester.

For low income families, owning a car can often be prohibitively expensive, forcing them to rely on public transportation. In the center of the city, that’s not a problem -- subway stops are plentiful and often served by multiple lines. But in neighborhoods like Roxbury, public transportation is often less reliable -- in the 1980s, the main subway line that ran through the area was moved a half mile west, and replaced by a bus line, which has had a marked impact on average commute times for residents in low-income areas.

A 2012 study found that, citywide, black bus riders had the longest commute of any demographic in Boston, spending an average of more than 48 minutes commuting to work one way -- white drivers, by contrast, had the shortest commutes, spending less than 27 minutes one way. And while transportation routes tend to be very effective at shuttling people into the city, most low-paying service jobs -- the jobs that low-income workers tend to have -- are located away from centers of public transportation. When a subway line moves into an area, property values often increase, which can end up pricing low-income families out of their homes.

Chicago

In the 1970s, a strong middle class made up about half of Chicago residents; today, the city ranks eighth in the country in terms of income inequality. In Chicago, the divide between household incomes has an especially strong geographic component -- between 2008 and 2012, incomes in nearly every lakefront neighborhood increased, while incomes in other neighborhoods declined. Low-income neighborhoods are mostly clumped west and south of the city, far from downtown, and also relatively far from the city's best paying jobs -- those in the science, technology, healthcare and business sectors. Those jobs tend to be located in downtown Chicago as well as in its immediate suburbs -- areas that, in recent years, have attracted the city's new and higher-paid workforce. The areas with the best jobs also happen to align with the cities top universities -- Northwestern, the University of Chicago, and the University of Illinois at Chicago.

Houston

Despite small tracts of high-income houses to the west and southwest of the city center, Houston’s downtown is largely inhabited by low-income families. Poverty is pervasive: around 156,000 of the city's households earn less than $18,759. And when it comes to segregation by income, Houston leads the country -- the divide between the rich living with other rich families and the poor living with other poor families is the worst in the nation. And while Houston might be the most racially diverse metropolitan area in the country, it’s also one of the most racially segregated. Houston’s newer suburban areas tend to have less racial and economic diversity than closer into the center of the city. Often, these suburbs began as planned communities that prohibited minorities from living there, first explicitly and later implicitly.

Los Angeles

Los Angeles — the area that encompasses both Beverly Hills and Compton — is a land of stark economic disparities. Despite its sprawling boundaries, areas of high income and areas of low income have sprung up side by side: in West Hollywood, median incomes can exceed $200,000 — less than two miles away, median incomes barely break $17,000. Along with wealth inequality, Los Angeles residents are also faced with stark differences in access to quality education. In high income neighborhoods, children often have access to schools that rank in the 80th percentile nationally; in south and central Los Angeles, schools often rank in the 20th percentile. In high income neighborhoods, a bounty of educational opportunities often translates into higher earning potential — in Redondo Beach, where more than 61 percent of residents have a college degree, the median household income in 2012 was $62,624. In South Central Los Angeles, however, where only 5 percent of residents have a college degree, the median income in 2012 was $17,803. The city’s educational gap mirrors a national trend — since the 1960s, difference in standardized test scores between rich and poor students has grown by 40 percent.

New York

Manhattan — an area of just over 33 square miles — has the most stark income gap in the entire country. In 2013, according to the U.S. Census Bureau, the top 5 percent of households earned $864,394 — 88 times that of the poorest 20 percent. Across the entire city, some 1.7 million New Yorkers live in poverty. But it’s not just access to public transportation or high-performing schools that New York’s poor lack: they also don’t have equal access to the internet — and not just through personal computers, but through public libraries, smart phones, or other personal or public means. Throughout nearly the entire borough of the Bronx — an area with average median incomes well below the national average — less than 85 percent of residents have access to the internet, and one-third of households don’t have broadband at home. In today’s interconnected society, a lack of internet access can prevent a resident from completing a homework assignment or applying for a job.

San Francisco

Los Angeles might be the worst city in the state of California when it comes to income inequality, but San Francisco is rapidly gaining on the metropolis to the south. Fueled by an influx of tech money from Silicon Valley, San Francisco’s wealth gap is growing faster than any other city in the country. In a city defined by high-tech innovation, many of the best paying jobs require higher education — according to the Federal Reserve Bank of San Francisco, having a college degree translates to $830,000 more earned over a lifetime than those with just a high school education.

Washington, D.C.

The past ten years in Washington, D.C. have been a case study in gentrification — aside from Portland, Oregon (which never had much racial diversity to begin with) D.C. is the fastest gentrifying city in the country. The city has stark boundaries of income — the wealthy to the west and poor to the east and across the river. But in recent years, an influx of well-educated young professionals have begun to flock to historically low-income neighborhoods, revitalizing the areas at the expense of low income families that can’t afford to go elsewhere. In a single census tract in northeast D.C., the median home value in 2013 reached $414,100— a 158 percent increase, after inflation, from median home values in the same area in 2000.