In 1967, the sociologist Robert Merton coined the phrase the “Matthew effect” (pdf) with respect to rewards in science, drawing on a verse in the Gospel of Matthew: “Whoever has will be given more, and they will have an abundance. Whoever does not have, even what they have will be taken from them” (New International Version).
A new study by the Brookings Institution [ht: ja] confirms just how accurate the Matthew Effect is as a way of describing what has transpired in major U.S. cities and metropolitan areas during the past seven years.
We all know that household income inequality in the United States as a whole is higher today than before the crash of 2007-08. Thus, for example, between 2007 and 2014, the 95/20 ratio nationwide rose from 8.5 to 9.3.
As it turns out, among the 100 largest metro areas, the majority (57) had a significantly higher 95/20 ratio in 2014 than in 2007. They are shown in the map above. Basically, what happened is that most metro areas experienced increases because top incomes were stable or declined slightly over this period, while incomes near the bottom dropped substantially.
Indeed, double-digit slides in 20th percentile incomes were quite common across large metro areas. High-income households earned significantly less in 2014 than in 2007 in 33 of the 100 largest metro areas, but the same was true for low-income households in fully 81 of those metro areas. Many of the metro areas experiencing the largest inequality increases also ranked among those with the highest inequality levels in 2014, such as Bridgeport, New Orleans, San Francisco, Boston, and New Haven.
The increase in inequality in major U.S. cities and metropolitan areas both contributes to and reflects growing inequality across the country as a whole.
Perhaps we need parables to focus our attention on this growing gap. But we need real economic changes to eliminate it.