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New Study Says San Francisco Is Still America's Second-Most Unequal Metro Area

Scott Lucas | March 12, 2014 | Story Politics

At this point, the existence of a widening wealth gap in San Francisco is pretty well established. But a new study has quantified just how big the gap between rich and poor is in our town. The answer? Big.

As in, the second-least equal income distribution in the nation.

Wait, haven't we written this story before? We have, except last month it was a Brookings Institution report that found San Francisco was the nation's second-most unequal city. This month it's real estate firm Trulia that, by slicing the numbers a different way, comes to the same conclusion.

The new report measured the ratio of income at the 90th percentile in an urban area against the income of the 10th percentile. For San Francisco, that multiplier was 17.9, which means that someone earning an income that puts them ahead of 90% of the city's population earns almost 18 times what someone at the 10% mark does.

The only region with a greater gap than ours was Fairfield County, Connecticut, which is home both to impoverished Bridgeport (where one-third of the children are below the poverty line) but also super-wealthy towns like Greenwich, Darien, and New Caanan (with median incomes of $124,000, $176,000, and $179,000 per year respectively). (In the Brooking's analysis of the data, Atlanta was the most unequal.) San Francisco was more unequal than New York, which had a ratio of 17.7. The least unequal cities in the study were Lakeland-Winter Haven, FL; Allentown, PA; and Salt Lake City, UT.

The top ten unequal cities were:

1. Fairfield County, CT. 90/10 Ratio: 18.5
2. San Francisco, CA. 90/10 Ratio: 17.9
3. New York, NY-NJ. 90/10 Ratio: 17.7
4. Boston, MA. 90/10 Ratio: 16.2
5. Detroit, MI. 90/10 Ratio: 15.2
6. Miami, FL. 90/10 Ratio: 15.1
7. Philadelphia, PA. 90/10 Ratio: 14.7
8. Springfield, MA. 90/10 Ratio: 14.2
9. Peabody, MA. 90/10 Ratio: 14.0
10. Toledo, OH. 90/10 Ratio: 13.9

What made this study particularly interesting was that it took a shot at figuring out what drives income inequality. The variables that were most strongly correlated with income inequality were housing prices and economic growth. More expensive housing was correlated with greater degrees of inequality. (We were joined by Los Angeles, Orange County, and New York City as the most unaffordable housing markets.) Housing that is hard to pay for is an unambiguously bad economic situation.

But the other predictor of income inequality—economic growth—isn't. The study also found that faster-growing metros are less equal. (They used the employment rate and construction activity as proxy for economic growth overall.) In general, the story was one of the rich pulling ahead, rather than the poor falling behind. (That's in line with other studies. See the second set of charts here.) Over time, San Francisco's income inequality has grown faster than that of anywhere else. Since 1990, the only cities in which income inequality has decreased are six metros in the South.

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