Having reached a high in the Roaring ‘20s, where raucous wealth played against extreme poverty, with large numbers of poor people leaving their agrarian roots for low-paying jobs in the cities, income inequality at that level has returned. From 1928, a year before the start of the Great Depression, to 1978, the income gap gradually decreased, but it has been on the rise ever since, with a short break during the recession of the 2000s.
The population of every city is characterized by income stratification, from poor to well-off, but income ranges can vary significantly from one city to another. To determine the 50 U.S. cities with the widest income gaps, 24/7 Wall St. used data from the U.S. Census Bureau’s 2020 American Community Survey. All other data came from the ACS.
Cities are ranked by their Gini index, a measure of income inequality based on the distribution of income across a population on a 0 to 1 scale, with 0 representing perfect equality and 1 representing the highest possible level of inequality. Among the cities on this list, Gini scores begin at 0.54 — well above the national Gini index of 0.489, according to Census Bureau data.
In places known for their wealthier demographic, such as Palm Springs and Beverly Hills in California, Palm Beach Gardens and Miami Beach in Florida, and New York City, there are often immense income gaps. The rich people in all these cities rely heavily on services provided by low paid workers, often immigrants. This may help to explain why 10 of the 50 cities with the largest income gaps are in Florida. (Gender income inequality, though improving, is still high. These are 22 metros with the worst pay gaps.)
Of the 50 cities with the largest gap between rich and poor, 21 are in Southern states other than Florida. In these states, the disparity is as attributable to the high levels of poverty as it is to the contrasting wealth. For 17 of these cities, the wages are the lowest in the country, tracking the federal minimum wage at just $7.25 per hour. (This is the poorest town in every state.)
A more surprising factor among the reasons for income disparity is the location of colleges and universities. Students living off campus are counted among residential households, and, while many of them may come from wealth and are paying high tuition, their income tends to be low to non-existent. This is at least a partial explanation for why such cities as Princeton, New Jersey; Ithaca, New York; Chapel Hill, North Carolina; Boulder, Colorado; and Amherst, Massachusetts are on the list.
Poughkeepsie, New York, home to Vassar, Marist, and a community college, tops the list as the U.S. city with the widest income gap. While the top 20% of earners have a relatively low average income of $283,549, they take in over 63% of all income in the area. Meanwhile, the average income of the bottom 20% of earners is just $9,404, and they cumulatively make just 2.1% of the area’s income.
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