Atlanta had greatest income inequality in U.S., Census show; metro far better

The city of Atlanta had the highest income inequality rate in the country from 2005 to 2009, just ahead of New Orleans, Washington, D.C., and Miami, according to a U.S. Census Bureau report.

The widening gap between the rich and poor in Atlanta is driven by high unemployment in an economy that is creating few jobs and gentrification -- new, expensive housing which has put wealth and poverty in the same ZIP codes. But the numbers are skewed by tens of thousands of college students within the city's limits, who often have no income.

The disparity in income among Americans has dominated the national dialogue in recent weeks. It ignited the Occupy Wall Street movement, spurred political debate in Washington and stoked talk radio conversation .

The report, based on data taken from the American Community Survey, states that, "Income inequality is one measure of societal conditions. Some have argued that the large (and recently increasing) income inequality is potentially harmful to social stability -- letting ‘the rich get richer while the poor get poorer' is thought to be bad for the United States."

That opinion is shared by Doug Bachtel,  a professor in the Department of Housing & Consumer Economics at the University of Georgia.

"There's nothing good about it," said  Bachtel. "There's too much dysfunction associated with it."

A spokesperson for Atlanta Mayor Kasim Reed said Thursday that the office had not seen a copy of the report and could not immediately comment on it.

Metro Atlanta fared far differently than the city of Atlanta. The region had lower income inequality than the nationwide average of metro areas during the five-year period. New York, Miami, Los Angeles, Houston and Memphis ranked as the top five metro areas highest in income inequality.

"Metro Atlanta looks pretty good," said Mike Alexander, research division chief at the Atlanta Regional Commission.

Economists and analysts cited a variety of reasons for the high level of income inequality in the city of Atlanta.

For one, Atlanta, they said, like other cities with high inequality rates, has a large minority population with lower income levels.

The economic downturn, which made up a big part of the five-year study period, exacerbated the problem, leading to more unemployment and reduced incomes among the city's population, said Barry Hirsch, a professor of economics at the Andrew Young School of Policy Studies at Georgia State.

At the same time, the city has some especially affluent communities such as Buckhead, heightening the income disparity.

By comparison, the population of Metro Atlanta, Bachtel said, is far more homogeneous and its income levels are less disparate.

Alexander said that another possible reason for the city of Atlanta having such a high income inequality is the thousands of students living in the city who attend schools such as Georgia Tech, Georgia State, Morehouse and Clark Atlanta, and who make up a significant portion of the total population, which the report estimated as 515,843. As a group, they would have lower incomes, adding to the disparity.

The gap between Americans with higher incomes and those with lower incomes has been at the core of the Occupy Wall Street movement that started in New York and spread to Atlanta. Protesters have criticized what they have characterized as the greed of the nation's wealthiest people.

This week, the Economic Policy Institute released a report that said protesters in the movement are "fundamentally right" in saying the economy has "generated increasingly unequal economic outcomes ..." The report said the top 1 percent of households had 59.9 percent of all the gains in income from 1979 to 2007. The bottom 90 percent had 8.6 percent of the gains.