Missing the Middle

The Occupy Wall Street movement – and, recently, Congress– have made income inequality a topic of national debate. Now, it seems, income inequality is also a pressing issue for our cities.In a recent report More Unequal and More Separate: Growth in the Residential Segregation of Families by Income 1970-1990, Sean Reardon and Kendra Bischoff find that since 1970 middle-income neighborhoods have disappeared while the number of Americans living in affluent or poor neighborhoods in metropolitan areas has more than doubled.The authors define “poor” and “affluent” neighborhoods as those with median family income of less than 67% and greater than 150% of metropolitan area median family income, respectively. Along with significant growth of poor and affluent neighborhoods, results of the study show that the proportion of families living in “middle-income” neighborhoods (with median family income ratios between 80% and 125%) dropped to 44% in 2007 from 65% in 1970.“In 1970 only 15 percent of families were in neighborhoods that we classify as either affluent or poor. By 2007, 31 percent of families lived in such neighborhoods.”

The study examines nearly 40 years of data from the U.S. Census and the American Community Survey to determine levels of income segregation by neighborhood in 117 metropolitan areas with greater than 500,000 residents.

Reardon and Bischoff argue that income segregation can exacerbate economic and social inequality. Concentrated wealth and poverty, the authors claim, create disparity in the allocation of public resources and limit opportunity for children in low-income communities.

The authors also find that income segregation among black and Hispanic families rose more sharply from 1970 to 2007 than it did for white families. While the authors are uncertain of the cause of the rapid increases for blacks and Hispanics, they speculate that reductions in housing discrimination and lenient mortgage lending led to increased mobility, which allowed wealthier members of both groups to move out of poorer neighborhoods.

Many areas with the greatest increase in income segregation were smaller metropolitan areas across the Rust Belt. Six of the ten most segregated cities today were from the New York City region and Texas. Only 13 of the 117 metropolitan areas in the study showed a decrease in income segregation.

Reardon and Bischoff speculate that the country’s foreclosure crisis has likely exacerbated income inequality since the completion of the study in 2007.

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