Income inequality is getting worse in U.S. urban areas
By Brian Thiede & David L. Brown & Jaclyn Butler & Leif Jensen for The Conversation
Income inequality has increased dramatically in the United States over recent decades, surpassing its previous peak in the 1920s.
In 2016, the average income among the bottom 24.9 million households was $21,000. Meanwhile, the top 1 percent, or 1.2 million households, earned an average household income of $1.8 million.
However, much of the attention has focused on inequality across the entire U.S. population, regardless of where individuals live.
Challenges in rural areas
This measurement ranges from 0, where everyone earns exactly the same amount and there is complete equality, to 1, or complete inequality, where all resources are held by one individual or household. Values above 0.4 are often considered high, and values near or below 0.3 very low.
For most of the past five decades, income inequality has been higher in rural counties than in urban areas.
The most rural counties -- those with the smallest, least dense populations -- suffer the highest levels of income inequality. Meanwhile, the most urban areas tend to have the lowest levels of inequality.
Narrowing the gap
However, rural-urban differences at the county level have narrowed over the past decade or so.
On average, in 1970, the Gini coefficient within rural counties was 10.2 percent higher than within urban counties. In 2016, it was just 0.5 percent higher. This convergence is happening because inequality is worsening in urban areas -- not because things are getting better in rural communities.
We found a similar pattern when comparing inequality between the most rural and most urban counties.
There is one exception: suburban counties. While suburban counties are getting more unequal, they are doing so at a much slower rate than the core cities in the nation's metropolitan areas.
What's more, more Americans now live in highly unequal counties. In 1970, 1 percent of the urban population lived in counties where the Gini coeffecient was over 0.48, an especially high score. In 2016, it was 8.2 percent.
Rural counties have seen a more modest increase in the proportion of their population living in highly unequal counties -- from 5.7 percent to 7.6 percent.
Strikingly, the population living in low-inequality counties has all but disappeared. While 8.3 percent of the rural population and 30 percent of the urban population lived in low-inequality places in 1970, by 2016 virtually no Americans -- less than 1 percent -- lived in low-inequality places, where the Gini coefficient was less than 0.36.
In 2016, just 31 out of the 3,076 counties in the contiguous United States were considered low inequality, according to our analysis.
What this means
Rural poverty has received considerable attention from scholars and the media.
But persistently high levels of inequality in rural communities also suggest the need to study the substantial number of people at the high end of the economic spectrum. Little is known about who, exactly, falls at the top of the income distribution in rural communities.
If researchers knew more about the role of elites in the rural United States, they could develop more comprehensive explanations of why inequality and other economic development challenges persist.
In addition, our work shows that urban inequality is an increasingly important issue. Since the average level of income inequality within rural counties has changed little over the decades, it seems that the growing inequality within urban counties has driven income disparities nationwide.
Income inequality is clearly on the upswing in the United States, but this process is playing out unevenly across the different parts of the country.
Brian Thiede is an assistant professor of rural sociology and demography at Pennsylvania State University; David L. Brown is a professor emeritus of development sociology at Cornell University; Jaclyn Butler is a doctoral student and Leif Jensen is a distinguished professor of rural sociology and demography at Penn State.