The Geography of Inequality in the United States, 1950-2000

IF INCOME INEQUALITY rises during a period in which rich and poor families become more segregated, only one outcome is possible: affluence and poverty both will become more geographically concentrated. ¹ Families that are well-off financially will increasingly live near and interact with other affluent families, and those that lack economic resources will live near and interact mainly with other poor families. Under these circumstances, the social worlds of the rich and poor will increasingly diverge. ² The poor will tend to inhabit high-risk neighborhoods that significantly lower the odds of socioeconomic success, while the affluent will enjoy a safe and secure world that enhances the possibilities of success on a variety of fronts. ³

As they grow apart, the material interests of poor and affluent communities will also diverge. ⁴ Residents of high-income households in affluent communities (with high property values) will have an incentive to tax themselves at low rates to provide good public services, while poor people living in poor communities (with low property values) will have to tax themselves at high rates if they are to receive services that even approach the quality of those offered in more affluent communities. With high values, however, the same revenue can be generated with lower rates. If the affluent and poor communities correspond to separate taxing authorities, the former will naturally resist raising taxes to offset the high taxes or subsidize the services of the latter. ⁵

Thus, the simultaneous occurrence of rising socioeconomic inequality and growing class segregation portends a society that is divided not only geographically, but also socially and politically as well. Many studies show that income inequality rose substantially over the last quarter of the twentieth century in marked contrast to the previous quarter century. Whereas the median family income grew by 208 percent and the Gini coefficient for inequality fell by 6 percent from 1950 to 1975, ⁶ between 1977 and 1999 the after-tax income of families in the middle of the distribution rose by just 3 percent while the Gini coefficient increased by 14 percent. ⁷ In contrast to the stagnation observed in the middle of the income distribution, income within the top fifth rose by 38 percent while that in the top 1 percent rose by 120 percent. ⁸ This pattern of stagnating incomes at the middle accompanied by slow declines at the bottom and rapid increases at the top was replicated throughout the country, although the degree of polarization appeared to be most extreme in the Northeast and Midwest. ⁹

Trends with respect to the geographic segregation of families by income are less well documented. Most attempts to measure income segregation have used tract-level data for specific urban areas. Massey and Eggers found that residential dissimilarity between affluent and poor families increased by 4 percent in the 30 largest metropolitan areas between 1970 and 1980. ¹⁰ The largest increases in class segregation were again observed in the Northeast and Midwest. In the ten largest metropolitan areas, the degree of residential dissimilarity between affluent and poor families rose by 6 percent during the 1970s and 8 percent during the 1980s. ¹¹ Using a somewhat different measure (the class sorting index) over a wider set of metropolitan areas, Jargowsky found that class segregation rose by 13 percent from 1970 to 1980 and by 10 percent from 1980 to 1990, at least among whites. ¹²

Available data thus suggest that both income inequality and class segregation increased during the period from 1970 to 1990, which predicts a growing spatial concentration of both affluence and poverty within neighborhoods of American cities. ¹³ Using the P* isolation index, Massey and Eggers ¹⁴ found that within the 30 largest metropolitan areas the geographic concentration of poverty rose by 20 percent between 1970...