Study says Atlanta’s income gap widest in nation

Most uneuqal, least unequal cities

Among the largest U.S. cities, here are those with the largest and smallest gaps between people near the top and bottom of the income ladder.

City/ 20th percentile income*/ 95th percentile income**/ Ratio***

Highest inequality

Atlanta/ $14,850/ $279,827/ 18.8

San Francisco/ $21,313/ $353,576/ 16.6

Miami/ $10,438/ $164,013/ 15.7

Boston/ $14,604/ $223,838/ 15.3

Washington/ $21,782/ $290,637/ 13.3

Lowest inequality

Wichita, Kan./ $19,516/ $151,068/ 7.7

Las Vegas/ $21,380/ $164,344/ 7.7

Mesa, Ariz./ $21,007/ $157,190/ 7.5

Arlington, Texas/ $24,169/ $175,759/ 7.3

Virginia Beach/ $31,051/ $187,652/ 6.0

* The income of a person who makes more than 19 percent of the city’s residents less than 80 percent

** The income of a person who makes more than 94 percent of the city’s residents and less than 4 percent

*** The number of times the 95th-percentile income can be divided by the 20th-percentile income

Note: Income figures are estimates drawn from the U.S. Census 2012 American Community Survey

Source: Brookings Institution

As the gulf between rich and poor drives a national debate, a new study released Thursday found that Atlanta is the most unequal city of all, ranking first among 50 cities examined.

The findings mirror some other recent research, including a project by researchers from Harvard and Berkeley that found that a child born poor in the Atlanta area is less likely to grow out of poverty than are children in most other big U.S. cities.

Word of the new study, by the left-of-center, Washington-based Brookings Institution, caused quick reaction in Atlanta from public officials, advocates for the poor and taxpayers. They variously expressed anger, concern — for the poor as well as for the reputation of the city — defensiveness and skepticism. What no one had was an easy fix, or even certainty about what the figures mean.

“I think it’s a major problem,” said Nathaniel Smith, a resident of Atlanta’s Summerhill neighborhood, and founder of the Partnership for Southern Equity. “It’s not only a problem on moral grounds, it’s also a problem on economic grounds. If we don’t find ways to include all strata — everyone — in the growth and prosperity of our city, then they won’t be prepared to help us compete with other cities and regions across the country.”

Sen. Vincent Fort, who represents parts of Atlanta including the Vine City neighborhood, echoed Smith. “Unfortunately, too often in Atlanta and nearby, the policies have been … give the rich more and it will trickle down. Well it’s not trickling down in Atlanta. We ought to be ashamed, because income immobility and inequality leads to crime.”

A representative of Mayor Kasim Reed’s office, Carlos Campos, was fielding a raft of media calls on the study. He said critics of city policy need to pay attention to what the city does for low income residents. Where critics like Fort cite the public subsidy for the Falcons stadium as faulty trickle-down policy, Campos said, the stadium deal will also infuse $30 million in city funds directly into nearby low-income neighborhoods.

Buckhead Coalition President Sam Massell said income inequality and immobility are worth attention and concern. But that doesn’t mean the solution is taking from the well-off by raising their taxes, he said.

Buckhead “only has 20 percent of Atlanta’s population — round figures — and 20 percent of Atlanta’s land area, but it’s paying 45 percent of Atlanta’s ad valorem taxes,” Massell said. “So those people that you might single out as being high-income in Buckhead are helping, day in and day out, people that don’t have.”

The study’s author, Alan Berube, said there are different ways to measure income inequality, which might produce somewhat different results.

For each city, the study compared the income of someone in the 95th percentile of the population with the income of someone in the 20th percentile. Averaging the income gap across all 50 cities, the high income was 10.8 times greater than the low income. In Atlanta, the gap much wider: the high income was 18.8 times the low one.

What it comes down to, said Berube, is Atlanta is a very strong example of a nationwide phenomenon. “Your rich people are very rich and your poor people are quite poor,” he said. In addition, he said, income divisions by race are highly pronounced here.

The income gap in Atlanta is not only big, it’s increasing. Though Atlanta’s data size wasn’t big enough to be positive about this conclusion, Berube said, it appeared that Atlanta’s gap widened more from 2007 to 2012 than most of the other cities’.

A researcher at the right-of-center Heritage Foundation, another Washington think tank, counseled caution in drawing conclusions from the study.

“When looking across major metropolitan areas within the U.S., it isn’t at all clear that the income gap, in and of itself, has much bearing at all on someone’s ability to move up the economic ladder – which is largely why many are concerned about income inequality in the first place,” said Donald Schneider. Schneider, who has studied income inequality and mobility, added that family instability, school quality and attendance at school may be more informative on the issue.

Even some who decry income inequality concede that some of its causes, such as gentrification, arguably are desirable.

In Atlanta, many wealthier residents have flocked to in-town neighborhoods from the suburbs — creating greater income inequality within the city. (The study measured cities, not larger metropolitan areas.)

Nevertheless, there is immediate cause for concern, said Alan Essig, director of the Georgia Budget and Policy Institute.

“There’s disagreement over what are the right policies to deal with that problem,” Essig said. “But too much income inequality is not good. And Atlanta ranking as one of the highest is not good. On public policy grounds, I think we need to really think about our economic development strategies — and it’s not about just chasing any job.”

Both Smith and Massell agree Atlanta’s income gap should be addressed — with everyone’s interests in mind, including the higher-income residents’.

“It’s not just about ‘We shall overcome,’” Smith said. “If we want to be on the cutting edge of the South, we’re going to have to wake up and have some hard conversations, and come up with some holistic solutions.”