Areas With the Worst Income Inequality in the U.S.

Advertising Disclosure: When you buy something by clicking links on our site, we may earn a small commission, but it never affects the products or services we recommend.

Image Not Available

The rich get richer, and the poor get poorer.

It’s a catchphrase that’s also a reality in communities across the United States.

Several measures studied by the Urban Institute show that income inequality largely worsened in metropolitan areas between the census years of 1990 and 2010. The nonprofit think tank’s resulting report is titled “Worlds Apart: Inequality Between America’s Most and Least Affluent Neighborhoods.”

Based on four indicators of advantage and disadvantage, the Urban Institute calculated “neighborhood advantage scores.”

The indicators were used to determine how advantaged — or disadvantaged — an area is. The four indicators are:

  • Average household income
  • Percentage of people with a college degree
  • Homeownership rate
  • Median housing value

As of 2010, the highest advantage score was found in Chevy Chase, Maryland (4.31), located outside Washington, D.C. Its average annual household income is more than $466,000.

The lowest score (minus 3.4) went to both Columbus, Ohio, and Memphis, Tennessee. Those cities have average annual household incomes of less than $16,000.

To understand the differences between neighborhoods that share the same housing and job markets, the Urban Institute examined such “commuting zones” and calculated what it called “neighborhood inequality scores.” The study explains:

Unlike metropolitan areas, commuting zones cover the entirety of the United States, and their definitions are constant over time.

Larger, more populous areas generally have “markedly higher levels of inequality,” the report states, with inequality worst in areas with 5 million to 10 million residents.

The highest inequality scores (all more than 5.5) went to Baltimore, Columbus, Dallas, Houston and Philadelphia.

The lowest inequality scores primarily went to smaller areas, with Appleton, Wisconsin, scoring the lowest (3.19) among commuting zones with at least 500,000 residents.

The lead author of the study, Rolf Pendall, who is director of the Urban Institute’s Metropolitan Housing and Communities Policy Center, explains part of the problem to MarketWatch:

“High wealth and income in big commuting zones do not trickle down.”

Do you agree with the Urban Institute’s findings? Let us know what you think by leaving a comment below or on our Facebook page.

Get smarter with your money!

Want the best money-news and tips to help you make more and spend less? Then sign up for the free Money Talks Newsletter to receive daily updates of personal finance news and advice, delivered straight to your inbox. Sign up for our free newsletter today.