General

This Is The American City With The Widest Income Gap

Income inequality has become one of the most urgent demographic problems of our time. Importantly, it is an issue that individuals, companies, non-profits, and even governments have sought to improve.

On a grand scale, income inequality affects very large populations. According to the World Inequality Database, Chile, Mexico, Brazil, and South Africa are high on the list of nations with the greatest inequality–measured by how much of each nation’s assets are controlled by the very rich, and how much of the populations are extremely poor.

Global organizations like the IMF have laid out maps for how inequality can be attacked by country. There is very little evidence that these have been used.

The problem is just as difficult and urgent closer to home. America has the largest number of billionaires in the world. At the same time, according to the Census, 37 million people live in poverty.

Using data from the U.S. Census Bureau’s 2019 American Community Survey, 24/7 Wall St. identified the metro area with the widest income gaps. Metropolitan areas we considered are ranked by their Gini coefficient, a measure of income inequality based on the distribution of income across a population on a 0 to 1 scale — 0 representing perfect equality and 1 representing the highest possible level of inequality.

Among the metro areas we reviewed, Gini scores are as high as 0.541 — well above the national Gini coefficient of 0.481. The majority of metro areas reviewed are located in the South, including six in Louisiana and five in each Florida and Georgia.

Causes behind rising inequality are complex and varied. A report published by the National Bureau of Economic Research ties the rising disparity to a range of economic factors, including globalization, technological advancement, a stagnant minimum wage, and the decline of labor unions.

The city with the widest income gap is Bridgeport-Stamford-Norwalk, CT. Here are the details:

Gini index: 0.541
> Avg. household income, top 20%: $459,737 — the highest of 384 metros
> Avg. household income, bottom 20%: $19,234 — 29th highest of 384 metros
> Share of all income in Bridgeport-Stamford-Norwalk that went to top 20%: 57.6% — 2nd highest of 384 metros
> Share of all income in Bridgeport-Stamford-Norwalk that went to bottom 20%: 2.4% — 7th lowest of 384 metros
> Median household income: $97,053 — 4th highest of 384 metros

Methodology:To determine the metropolitan area with the widest income gaps in the nation, 24/7 Wall St. reviewed one-year estimates of the Gini Index of income inequality from the U.S. Census Bureau’s 2019 American Community Survey.

The Gini Index of income inequality summarizes income dispersion in an area on a scale from 0 to 1. A value of 0 indicates perfect equality — everyone in the area receives an equal share of income. A value of 1 indicates perfect inequality — only one recipient receives all the income.

We used the 384 metropolitan statistical areas as delineated by the United States Office of Management and Budget and used by the Census Bureau as our definition of metros.

Metros were ranked based on their Gini Index. To break ties, we used the share of aggregate household income earned by the top 20% of households.

Additional information on average household income by quintile, share of aggregate household income by quintile, and median household income are also one-year estimates from the 2019 ACS.

Click here to read American Metros With The Widest Income Gaps