Shrinking urban middle-class

Posted: 19 May 2017 in Uncategorized
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income-distribution-usa-cities

Yesterday, I discussed new findings concerning the fact that, while the United States is getting richer every year, American workers are not.

That same problem is showing up in American cities, which since 1970 have experienced a “hollowing-out” of the middle-class.

The graphic above shows the change in income distribution in 20 major U.S. cities between 1970 and 2015. In 1970, each of these cities exhibits a near-symmetrical, bell-shaped income distribution—a high concentration of households in the middle, with narrow tails of low and high-income households on either end. By 2015, the distributions have grown more polarized: fewer middle-income households, and more households in the low-income and/or high-income extremes.

1970 2015

Chicago is a good example of what has taken place in urban areas across the country. It boasted a thriving manufacturing sector in 1970. As illustrated in the map on the left above, incomes were lowest in the city center, growing higher radially outward toward the city’s borders. And while Chicago was largely successful in transitioning away from manufacturing to a service-based economy by 2015, that transition created a heavy concentration of wealth in the business/financial district and marked decline in most of the surrounding areas (as indicated in the map on the right).

To listen to the champions of American capitalism, cities represent the solution to growing inequality and the decline of the middle-class associated with the “old” manufacturing economy. But, as it turns out, urban centers are characterized by the same kind of grotesque inequalities and hollowing-out of the middle-class as the rest of the country.

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