Income inequality varies starkly by place. This is especially true (and damaging) at the metropolitan scale, where segregation by income–the isolation of both the poor and the rich–is deepening. In 1970 only 15 percent of American families lived in neighborhoods that were either affluent (where the median incomes were greater than 150 percent of median income in their metro areas) or poor (neighborhoods where median incomes were less than 67 percent of metropolitan median income). By 2007, 31 percent of families lived in such neighborhoods [see Sean F. Reardon and Kendra Bischoff, Growth in the Residential Segregation of Families by Income, 1970-2009 (American Communities Project, November 2011)].
This map offers a broader geography, charting various inequality measures across the states. There are two swaths of inequality, where state measures fall short of those for the country as a whole: the metropolitan northeast (e.g. New York, Connecticut and Massachusetts), and the deep south (e.g. Texas, Louisiana, Mississippi, Alabama). Inequality is high in this states, for different reasons. In the northeast, the combination of metro inequality and the prominence of financial services pushes upper incomes away from the pack. In these states, as we have seen, a relatively higher share of the workforce is in the top earning brackets . In the south, inequality reflects weakness at the bottom of the earnings distribution. Nearly a third of these workers in these states (all “right to work” bastions) earn less than a “poverty wage” of $10.73/hr.
Income ratios from U.S. Census Bureau, U.S. Neighborhood Income Inequality in the 2005-2009 Period (October 2011). The District of Columbia, an outlier on these measures, is excluded. Gini, Income and Poverty rates from Small Area Income and Poverty Estimates and American Fact Finder [updated September 20, 2012 with release of ACS poverty data. Poverty wage from Rebeccas Thiess, The Future of Work (EPI, April 2012); low-wage from John Schmidt and Janelle Jones, Low-Wage Workers by State (CEPR, 2012). Unionization rates from unionstats.com.