The Geography of Inequality

Perhaps no issue looms over American politics more than worsening inequality and the stunting of the road to upward mobility. However, inequality varies widely across America.

Scholars of the geography of American inequality have different theses but on certain issues there seems to be broad agreement. An extensive examination by University of Washington geographer Richard Morrill found that the worst economic inequality is largely in the country’s biggest cities, as well as in isolated rural stretches in places like Appalachia, the Rio Grande Valley and parts of the desert Southwest.

Morrill’s findings puncture the mythology espoused by some urban boosters that packing people together makes for a more productive and “creative” economy, as well as a better environment for upward mobility. A much-discussed report on social mobility in 2013 by Harvard researchers was cited by the New York Times, among others, as evidence of the superiority of the densest metropolitan areas, but it actually found the highest rates of upward mobility in more sprawling, transit-oriented metropolitan areas like Salt Lake City, small cities of the Great Plains such as Bismarck, N.D.; Yankton, S.D.; Pecos, Texas; and even Bakersfield, Calif., a place Columbia University urban planning professor David King wryly labeled “a poster child for sprawl.”

Demographer Wendell Cox pointed out that the Harvard research found that commuting zones (similar to metropolitan areas) with less than 100,000 population average have the highest average upward income mobility.

The Luxury City

Most studies agree that large urban centers, which were once meccas of upward mobility, consistently have the highest level of inequality. The modern “back to the city” movement is increasingly less about creating opportunity rather than what former New York Mayor Michael Bloomberg called “a luxury product” focused on tapping the trickle down from the very wealthy. Increasingly our most “successful cities” have become as journalist Simon Kuper puts it, “the vast gated communities where the one percent reproduces itself.”

The most profound level of inequality and bifurcated class structure can be found in the densest and most influential urban environment in North America — Manhattan. In 1980 Manhattan ranked 17th among the nation’s counties in income inequality; it now ranks the worst among the country’s largest counties, something that some urbanists such as Ed Glaeser suggests Gothamites should actually celebrate.

Maybe not. The most commonly used measure of inequality is the Gini index, which ranges between 0, which would be complete equality (everyone in a community has the same income), and 1, which is complete inequality (one person has all the income, all others none). Manhattan’s Gini index stood at 0.596 in 2012, higher than that of South Africa before the Apartheid-ending 1994 election. (The U.S. average is 0.471.) If Manhattan were a country, it would rank sixth highest in income inequality in the world out of more than 130 for which the World Bank reports data. In 2009 New York’s wealthiest one percent earned a third of the entire municipality’s personal income — almost twice the proportion for the rest of the country.

The same patterns can be seen, albeit to a lesser extent, in other major cities. A 2006 analysis by the Brookings Institution showed the percentage of middle income families declined precipitously in the 100 largest metro areas from 1970 to 2000.

The role of costs is critical here. A 2014 Brookings study showed that the big cities with the most pronounced levels of inequality also have the highest costs: San Francisco, Miami, Boston, Washington, D.C., New York, Oakland, Chicago and Los Angeles. The one notable exception to this correlation is Atlanta. The lowest degree of inequality was found generally in smaller, less expensive cities like Ft. Worth, Texas; Oklahoma City; Raleigh, N.C.; and Mesa, Ariz. Income inequality has risen most rapidly in the bastion of luxury progressivism, San Francisco, where the wages of the 20th percentile of all households declined by $4,300 a year to $21,300 from 2007-12. Indeed when average urban incomes are adjusted for the higher rent and costs, the middle classes in metropolitan areas such as New York, Los Angeles, Portland, Miami and San Francisco have among the lowest real earnings of any metropolitan area.

Rural Poverty

But cities are not the only places suffering extreme inequality. Some of the nation’s worst poverty and inequality, notes Morrill, exist in rural areas. This is particularly true in places like Texas’ Rio Grande Valley, Appalachia and large parts of the Southwest.

Perhaps no place is inequality more evident than in the rural reaches of California, the nation’s richest agricultural state. The Golden State is now home to 111 billionaires, by far the most of any state; California billionaires personally hold assets worth $485 billion, more than the entire GDP of all but 24 countries in the world. Yet the state also suffers the highest poverty rate in the country (adjusted for housing costs), above 23%, and a leviathan welfare state. As of 2012, with roughly 12% of the population, California accounted for roughly one-third of the nation’s welfare recipients.

With the farm economy increasingly mechanized and industrial growth stifled largely by regulation, many rural Californians particularly Latinos, are downwardly mobile, and doing worse than their parents; native-born Latinos actually have shorter lifespans than their parents, according to a2011 report. Although unemployment remains high in many of the state’s largest urban counties, the highest unemployment is concentrated in the rural counties of the interior. Fresno was found in one study to have the least well-off Congressional district.

The vast expanse of economic decline in the midst of unprecedented, but very narrow urban luxury has been characterized as “liberal apartheid. ” The well-heeled, largely white and Asian coastal denizens live in an economically inaccessible bubble insulated from the largely poor, working-class, heavily Latino communities in the eastern interior of the state.

Another example of this dichotomy — perhaps best described as the dilemma of being a “red state” economy in a blue state — can be seen in upstate New York, where by virtually all the measurements of upward mobility — job growth, median income, income growth — the region ranked below long-impoverished southern Appalachia as of the mid-2000s. The prospect of developing the area’s considerable natural gas resources was welcomed by many impoverished small landowners, but it has been stymied by a coalition of environmentalists in local university towns and plutocrats and celebrities who have retired to the area or have second homes there, including many New York City-based “progressives.”

Where Inequality Is Least Pronounced

According to the progressive urbanist gospel, suburbs are doomed to be populated by poor families crowding into dilapidated, bargain-priced former McMansions in the new “suburban wastelands.” Suburbs, not inner cities, suggests such urban boosters as Brookings Chris Leinberger, will be the new epicenter of inequality, even though the percentage of poor people, as shown above, remained far higher in the urban core.

Yet , according to geographer Morrill, in comparison with urban cores, suburban areas remain heavily middle class, with a high proportion of homeowners, something rare inside the ranks of core cities.The average poverty rate in the historical core municipalities in the 52 largest U.S. metro areas was 24.1% in 2012, more than double the 11.7% rate in suburban areas. Between 2000 and 2010, more than 80% of the new population.

in America’s urban core communities lived below the poverty line compared with a third of the new population in suburban areas, although the majority of poor people lived there, in large part because they are also the home to the vast majority of metropolitan area residents.

An analysis by demographer Wendell Cox of American Community Survey Data for 2012 indicates that suburban areas suffer considerably less household income inequality than the core cities. Among the 51 metropolitan areas with populations over 1 million, suburban areas were less unequal (measured by the Gini coefficient) than the core cities in 46 cases.

The Racial Dynamic

There is also a very clear correlation between high numbers of certain groups — notably African Americans but also Hispanics — and extreme inequality. Morrill’s analysis shows a huge confluence between states with the largest income gaps, largely in the South and Southwest, with the highest concentrations of these historically disadvantaged ethnic groups.

In contrast, Morrill suggests, areas that are heavily homogeneous, notably the “Nordic belt” that cuts across the northern Great Lakes all the way to the Seattle area, have the least degree of poverty and inequality. Morrill suggests that those areas dominated by certain ethnic backgrounds — German, Scandinavian, Asian — may enjoy far more upward mobility and less poverty than others.

Some, such as UC Davis’ Gregory Clark even suggest that parentage determines success more than anyone suspects — what the Economist has labeled “genetic determinism.” None of this is particularly pleasant but we need to understand the geography of inequality if we want to understand the root causes of why so many Americans remain stuck at the lower ends of the economic order.

About the Author:  Joel Kotkin is executive editor of NewGeography.com and Distinguished Presidential Fellow in Urban Futures at Chapman University, and a member of the editorial board of the Orange County Register. He is author of The City: A Global History and The Next Hundred Million: America in 2050. His most recent study, The Rise of Postfamilialism, has been widely discussed and distributed internationally. He lives in Los Angeles, CA. This story originally appeared at Forbes.com and is republished with permission from the author.