Income Inequality Gap Widens Among U.S. Communities Over 30 Years

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In the debate about income inequality in America, many stories miss an important point: rising disparities are not just about investment bankers versus autoworkers. They're about entire communities of "winners" and "losers." 

As we have noted with Patchwork Nation, as the long-term economic shifts in the United States happen, communities continue to diverge and the idea of "an American economy" increasingly looks like an anachronism.

To get a better understanding of the impact of the changing American economy at the community level, Patchwork Nation looked at median family income in 1980 and compared it to the same number from 2010 in our 12 county types. The results indicate just how seriously the last 30 years have affected different kinds of communities.

The numbers, which appear in April's Atlantic Monthly, show that more than half of our county types, seven out of our 12, actually had a lower median family income in 2010 than they did 30 years ago. The figures, 1980 data from the Census and 2010 estimates from the firm Geolytics, were adjusted for inflation. (2010 Census data by county are not yet available.)

That doesn't mean that, for most the part American families are worse off. The most populous county types in the country - the Monied Burbs,Industrial Metropolises and Boom Towns - all saw growth overall.

But it does show that there are communities that are finding the transition to a new economy much more difficult than others. And those challenges raise serious question for policymakers in Washington.

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Growing Gaps

Compared to 1980, the communities that have been hit the hardest are the Latino-heavy communities we call Immigration Nation. They saw their median family income fall from $42,795 in 1980 to $38,941 in 2010 - a decline of $3,854. In large part, that's likely due to the influx of immigrants with lower educational and skill levels into these communities, primarily located in the Southwest.

There was also a big drop in the small-town Service Worker Center counties, where the median family incomes fell by about $2,500 between 1980 and 2010. In those places, the story is mostly about the loss of small manufacturing. Those counties, many of which are fairly remote, survive because people in surrounding areas visit to do business. Without an influx of dollars from something else, like small manufacturing or tourism, times can be tight.

Rural, agricultural Tractor Country also took a hit with a drop of more than $2,700 in median family income.

Many of the other county types found their median family income numbers essentially unchanged - with small rises or small declines - but some places have done far better.

Change in Mean of Median Income by Community Type

Community Type 1980 2010 Change
Monied 'Burbs $55,688 $59,404 $3,716
Minority Central $36,869 $36,130 -$739
Evangelical Epicenters $38,630 $37,554 -$1,076
Tractor Country $42,144 $39,379 -$2,765
Campus and Careers $51,524 $52,193 $669
Immigration Nation $42,795 $38,941 -$3,854
Industrial Metropolis $53,921 $56,234 $2,313
Boom Towns $49,597 $51,618 $2,021
Service Center $44,222 $41,775 -$2,447
Empty Nests $46,879 $45,876 -$1,003
Military Bastions $45,565 $46,510 $945
Mormon Outposts $45,266 $43,591 -$1,675


The Boom Towns, which grew dramatically at the beginning of the last decade, saw median family incomes rise by about $2,000. The big-city Industrial Metros bumped up by about $2,300. And the wealthy, suburban Monied Burbs saw their median family incomes climb by more than $3,700.

One way to think of the changes is this: The highest median family income in Patchwork Nation in 1980 was the Monied Burbs at $55,688, while the poorest was Minority Central at $36,869 - a difference of $18,819. In 2010, the numbers were $59,404 for the Monied Burbs and $36,130 for Minority Central - a difference of $23,274.

In other words, the already-wide income gap between the wealthiest county type in Patchwork Nation and the poorest grew by more than $4,400 in the last 30 years in inflation-adjusted dollars.

There are a few provisos that come with looking at the numbers this way, of course.

Some places, particularly the Industrial Metropolis counties, have massive disparities within them. American big cities are full of examples of extreme wealth just blocks away examples of extreme poverty.

And remember 2010 was not exactly a banner year for the American economy. It was the depths of recession. These numbers may bounce back some in the years to come. But many economists believe what was lost in the recession may be gone for quite some time - that the "Great Recession" was structural in nature and Americans have to prepare for a new world that may look more like it.

Now What?

One reaction to all these numbers may be, so what? The numbers here reflect what happens when an economy changes and global competition rocks an economic boat that used to be steady.

Maybe. But particularly in the U.S., these numbers have real significance - and not just from the standpoint of equality and fairness.

The U.S. economy, ultimately, is built on the fact that Americans spend money. About two-thirds of the economy is consumer spending. And these numbers raise a few questions.

First, increasingly the weight of the economy is being placed on a few types of places -- for the most part, places that are better educated and wealthier. The buying power of other communities is not only struggling to keep up, it is falling behind. Is that best for a consumer economy?

And second, what happens if the American socioeconomic system, essentially, functions on two tracks? Will the people living places on the lower tracks stand for that and for how long?

We'll look at those questions in more depth later this week on this blog and on the PBS NewsHour broadcast. Patchwork Nation went with NewsHour economics correspondent Paul Solman to two counties in Ohio - Crawford (anEmptying Nest) and Delaware (a Monied Burb) to see the dramatically different paths those places have taken since 1980:


At 3 p.m. ET Thursday, NewsHour correspondent Hari Sreenivasan, Paul Solman and I will participate in a live chat on the NewsHour's website:pbs.org/newshour.