In addition to overused aphorisms—it takes money to make money!—there’s a macroeconomic debate about the causal relationship between increased inequality and decreased mobility. But we do know that higher levels of inequality are correlated with lower levels of mobility at the local level.
Using data from the National Equity Atlas, let’s look at inequality for Southern metros. This measure of inequality shows the ratio of income at the 95th percentile of the household income distribution to income at the 20th percentile:
A higher ratio means a higher level of inequality. The ratio has increased in every Southern city since 1980, with the largest increases in Cape Coral, Charleston, Charlotte, Greenville, Houston, and Miami.
We know you’re wondering, so here’s what it means to be in the 20th and 95th percentiles in each city :
So, 20 percent of households in each city make the same or less than the income at the 20th percentile, and 5 percent of households make the same or more than the income at the 95th percentile. Got it?
Inequality is increasing in most of these cities because earners at the top of the income distribution have seen growth in their incomes since 1980, while lower income earners have seen stagnant or negative growth:
Incomes are only growing for those at the top of the income distribution, and that’s a problem, especially as healthcare and education costs rise nationwide, and many of these metros see increasing costs for transportation and housing. And while it’s a problem that could be addressed with federal and state policy (see early reference to macroeconomic debate), gridlock in both arenas doesn’t bode well for such efforts. That’s why it’s important that cities develop local responses to these issues. Check out our State of the South profiles of Charlotte, Danville, and Greenville for just a few examples.