Notes on inequality

shopping-cartIn a report published June 16, three Economic Policy Institute researchers used IRS data to calculate the incomes of the top one percent and the other 99 percent in each United States county. Researchers Estelle Sommeiller, Mark Price and Ellis Wezeter calculated the ratio between the two. Practically all the counties that ranked highest in median income also ranked the highest in inequality.

Money’s a big issue. One of the basic questions of economics is how the economic pie can be encouraged to grow faster while also being distributed into more equitable pieces. One’s attention between those two variables probably depends on one’s politics. But the complex interaction among economic growth, affordability and economic inequality is not easily navigated.

In income, Ulster is ranked fairly high at 305th among the more than three thousand U.S. counties, behind that of most but not all the counties in the region to its south and well ahead of most of the non-urban counties to its north and west. Dutchess and Orange counties are comfortably higher than Ulster, and Greene and Delaware are considerably lower.

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Unsurprisingly, about half of the counties that the Regional Plan Association defines as within the New York metropolitan region have among the highest median-income levels in the country. Ulster County would like to be transformed into one of those. It has a long way to go.

The top one percent of families in Ulster County averaged a median income of $561,318, the bottom 99 percent $39,344. Dividing the second number into the first gives a ratio of 14.3.
That ratio ranked Ulster 1255th among all 3144 United States counties in disparity. Dutchess was 758th, meaning the gap is wider; Orange 1319th, Greene 1820th. With its high proportion of recent wealthy city émigrés and relatively small population, Columbia County ranked 108th among the counties in terms of inequality. The median income of the top one percent in that county was $1,063,446 in 2013.

How much do you have to earn, as reported to the IRS, to qualify for the top one percent? It was over a million dollars in only twelve counties in the country.
To be in the top one per cent in Teton County, Wyoming, your family needed to make $2,216,883 in 2013. The average income in the top one per cent was $19,995,834. In terms of income, Teton, an extremely attractive environment in the middle of nowhere, is the most unequal county in the country.

Second on the list is Manhattan, where $1,424,582 was the threshold amount needed to be in the top one percent. The median income of the one percent in New York County is $8,143,415.
Third is Fairfield, Connecticut (Bridgeport, Norwalk, Stamford), with $1,390,965 required. In sixth place is Westchester County, where one needs $1,184,603 in 2013 income for membership in the top one percent.

The report found that income inequality has risen in every state since the 1970s, and in many states was at the post-Great Recession level. In 24 states, the top one percent captured at least half of all income growth between 2009 and 2013, and in 15 of those states the top one percent captured all income growth. In another ten states, top one-percent incomes grew in the double digits, while bottom 99 percent incomes fell.

For the United States overall, the report indicated, the top one percent of families captured 85.1 percent of total income growth between 2009 and 2013. In 2013 the top one percent of families nationally made 25.3 times as much as the bottom 99 percent.

“Accept it: New York thrives on inequality,” wrote the irrepressible Greg David of Crain’s Business on June 22. His slant was that the wealthy pay a lot of taxes on their income. “Inequality has increased in recent years,” David admitted, “but remains a few percentage points below the 2007 peak.”
For many, it’s worth sticking it out in the Big Apple in hopes of economic advancement and opportunity. For others, it isn’t. New York City is an exciting place to be. There are compelling reasons for staying, compelling reasons for leaving, and compelling reasons for trying to seek the best of both worlds.

Census demographer William Frey studied the population numbers from 2010 to 2013 in America’s 51 largest metro areas. Commented futurist Richard Florida, “Overall, his numbers appear to support the notion of a great inversion from the previous era of mass suburbanization.” In a third of the most populous metros, including New York City, the center cities grew faster than the suburbs.

America’s economically thriving biggest cities, most of which have a lot of rich people and a lot of poor people, host a growing degree of economic inequality. In a ranking of the nation’s 916 metropolitan areas, many of the top slots in terms of the income threshold for the top one percent are occupied by large cities. Besides the ones already mentioned, San Jose ranks fifth in inequality, San Francisco eighth, Boston tenth, Houston 20, Washington 21, Seattle 26, Chicago 29, Los Angeles 31, Miami 32, Minneapolis 33, Denver 34, Dallas 35, Philadelphia 41 and San Diego 48.

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