The Hollowing Out of Chicago

There’s a Sun-Times article on income inequality in Chicago I found interesting. Apparently, Chicago is becoming much less equal in terms of incomes fast:

Journalism professor Darnell Little and his Medill Data Project at Northwestern University crunched census income data for the Chicago Sun-Times and found that the wealth gap is widening faster in Chicago than in the suburbs or in the state and country in general.

Statistically speaking, the best way to gauge wealth distribution is a measure called the Gini index. It’s a scale from 0 to 100 in which 0 represents total, utopian equality — i.e., each of us is paid the same amount of money — and 100 means one person is hoarding every last penny.

In 1990, Chicago registered 44.9 on the Gini index. That suggested an only slightly greater level of disparity in the city than for Illinois as a whole, which recorded a score of 44.3 that year.

Jump to 2012, the most recent year for which federal income data is available on a city and county level. Chicago had risen sharply to 51.9 on the income-inequality scale — far worse than the 46.5 for the entire state and 47.1 for the country.

They also found that the city of Chicago was much more unequal than its collar counties were.

I think a little perspective is called for. The reality is that income inequality in Chicago is pretty comparable to that in other large cities. Chicago’s .5286 (according to the linked results) are better than New York’s .5381 and worse than Los Angeles’s .5235 but not drastically so. Probably within margin of error. The least equal cities are Atlanta, New Orleans, and Miami.

If you look at these results with flinty, steadfast gaze, I think the results suggest to us that high Gini coefficients are correlated with black population. Our largest cities are becoming places for the white rich and the black poor. This is the problem that has been dogging us since the end of the Golden Age of the civil rights movement 40 years ago. What can we do to improve the situations of poor blacks? Most of what we’ve done over that period hasn’t reached the poor. The single most positive thing we’ve done has been welfare reform and that’s something the Obama Administration has been trying to reverse.

19 comments… add one

  • ....

    And that welfare reform is only likely to work when the economy performs reasonably well. With more people dropping out of the workforce than getting jobs now, with new college graduates struggling to find work despite their shiny new diplomas, and with all job growth going to immigrants (legal and otherwise), how’s that welfare reform supposed to work now?

    The 1990s seem like forever ago.

  • michael reynolds

    If the problem has worsened in the years since welfare reform, how is that a positive?

  • Jimbino

    The gummint could solve our race problem in a couple of generations by giving financial support to the production of a mixed-race baby.

  • PD Shaw

    A quick scan of the African-American demographics of some of the top ten cities with high Gini coefficients:

    3. Miami (19.2%,)
    5. Gainesville (23.0%)
    5. Tampa (26.2%)
    8. Athens (25.1%)
    9. Providence (16.0%)
    10. Berkley (10.0%)

    Of these only Tampa cracks the top 100 U.S. cities for percentage of population that is African-American, at 72. And Florida, particularly Miami, has a lot of Haitian immigrants that might suggest other factors as well.

    I think the list suggests three reasons a city might have a high Gini coefficient: (1) City in Deep South with high African-American population, plus cities recipient of Great Migration therefrom; (2) City in East or West Coast with high immigration; and (3) a City lauded by Richard Florida for its creative class.

  • That comment might win the thread, PD.

  • michael reynolds

    Dave:

    Ah. I misread the thrust of the paragraph. More coffee.

  • steve

    Welfare reform passed in mid 1996. It really took effect in mid-1997. Using your data, nearly all of the improvement took place before reform. If you assume that there is a lag in having a policy take effect, which is what I think really happens, then all of the improvement is probably due to something else (as is the consequent worsening). It looks to me as though the single best thing you do is have a rapidly growing economy. Of course, when the economy contracts, it looks as though those gains go away disproportionately.

    Steve

  • You may well be right. However, that supports my key point: almost nothing has been done for two decades.

    My key complaint is with the Obama Administration’s priorities. I think their priorities should have been a rapid return to solid growth and putting people back to work. Not increasing the operational tempo in Afghanistan. Not global warming. Not alternative energy. Not healthcare reform. Not even securing the president’s re-election and his place in history. A rapid return to solid growth and putting people back to work.

  • jan

    ” I think their priorities should have been a rapid return to solid growth and putting people back to work. Not increasing the operational tempo in Afghanistan. Not global warming. Not alternative energy. Not healthcare reform. Not even securing the president’s re-election and his place in history. A rapid return to solid growth and putting people back to work.”

    That sounds so…so simply stated. Growth leading to jobs? How radical that is of you to introduce a common sense cause-effect kind of principle to a DC game that’s all about political advantage and gamesmenship!

  • I admit it’s a lot harder to do than it is to say. However, that just means it takes more effort not that it’s not worth devoting effort to.

  • ...

    I admit it’s a lot harder to do than it is to say. However, that just means it takes more effort not that it’s not worth devoting effort to.

    It was more important to re-inflate the portfolios of the Buffet’s and Soros’s of the world. Mission Accomplished!

  • mike shupp

    The Gini coefficients go up and you attribute this to “the single most positive thing we’ve done” — i.e. welfare reform? Uhhh …

    “You killed my father!

  • mike shupp

    More seriously, what we obviously need in our decaying city centers are a whole batch of factory jobs. Not just the major cities like Detroit, but all those shrinking Rustbelt places like Dayton and Evanston and Knoxville. And we could use some sort of agricultural revival in rural areas that would give a new generation of farmers something more profitable to grow than corn and tomatoes.

    My suggestions, since we’re looking at desperate measures

    A) the White House should convene a conference of tech types and say to them, “You people from Intel and Apple want to build everything these days in China and South East Asia, and you AMD fellows are just as bad. Go ahead and do this, but understand you’ll be bringing your chips and computer drives and screens back to this country through a 50% tariff, effective almost immediately. Walgreen, you want to move your headquarters to Ireland for tax purposes, but go on selling here? Go ahead, but remember we’re putting together a special tax bill for you as well. Some of the rest of you feel a need to become French or Swiss or British? Feel free, but don’t be surprised by what happens.”

    B) The US government should start up a wholly-owned manufacturing firm with brand new plants in several cities to manufacture high-quality computer components. The new firm should spend heavily on state of the art R&D to make it competitive with Intel and AMD. Possibly there should be several firms to compete with each other. Tariffs should foot much of the bills.

    C) There should be a similar firm (or firms) to build trains and subway cars, solar cells, truck-sized nuclear reactors (a gentleman named William Gates would be interested in reaching agreement with the government about investment in this area), aircraft parts, and whatever might come to mind that Americans “just don’t know how to make anymore.”

    D) Pharmaceuticals. Orphan drugs. Genetically engineered antibiotics and other medicines. Medical devices. All of this underpinned by a doubling of NIH research and something like DARPA to encourage rapid deployment of new health care technology to new companies.

    E) Agricultural research aimed at producing varieties of conventional crops which can withstand changing climatic conditions during this century, and at adapting crops from other nations which might be adapted to American fields and palates, and at developing novel plants and livestock which might become popular in years to come. We need more Luther Burbanks and Alexander Graham Bells!

    This would cost money, I concede. I can’t think of anything more easy for the US government to produce than money. I think our grandchildren would praise us for our courage, if we go down this path. Better yet, they’d look at its success, like modern-day young folk, and not imagine any part of it was not commonplace in Biblical times.

  • TastyBits

    @mike shupp

    … I can’t think of anything more easy for the US government to produce than money. …

    Actually, the financial industry creates most of the money through credit, and we see how well that went. It has been six years, and the theories have all failed. By this time it should be clear that creating money is the problem not the solution, but apparently not.

    Not to worry, there will be a chance to learn the lesson a second time.

  • jan

    mike shupp, interesting stuff you wrote in your last post. People can come up with innovative ideas if they have an encouraging environment to do so. Your agricultural comments were particularly appealing as they were using creative foresight in reasoning out the possibilities of the future.

    Along with that train of thought, there have been suggestions that R & D should be done to create food sources that could tolerate saltier soil — should the ‘oceans rising’ predictions come to fruition down the road, where elevated tides would come in contact with coastal agricultural areas.

    “We need more Luther Burbanks and Alexander Graham Bells!”

    I think good minds are still around.

    However, the knotholes of governmental restraint formed by a labyrinth of punishing policies, act as legislative barriers containing, bottling-up unconventional, inventive brains. Such man-made political obstacles disallow many to experiment and perhaps succeed in germinating new ideas into working reality.

  • Andy

    I couldn’t get to the original article, but is it for actual cities or for metro areas?

    Also, it seems to me that middle class families with chidren are a big factor – places without that demographic will likely have worse inequality.

  • It claims to be for cities rather than metropolitan areas. I searched around until I found statistics limited to the cities.

    One of the interesting things about that list is that there are different modalities for income inequality Some cities have income inequality because the poor have a smaller share of income (New Orleans), some have income inequality because the rich have a larger share of income (New York), some have both (San Francisco).

  • jan

    Well, Illinois did not fare too well in this recent Gallup poll rating the the worst and then best states to live in.

    For worst state, Illinois came in 1st, and for best state it came in 49th! At least it showed some continuity of opinion.

    Illinois has the unfortunate distinction of being the state with the highest percentage of residents who say it is the worst possible place to live. One in four Illinois residents (25%) say the state is the worst place to live, followed by 17% each in Rhode Island and Connecticut.

    Throughout its history, Illinois has been rocked by high-profile scandals, investigations, and resignations from Chicago to Springfield and elsewhere throughout the state. Such scandals may explain why Illinois residents have the least trust in their state government across all 50 states. Additionally, they are among the most resentful about the amount they pay in state taxes. These factors may contribute to an overall low morale for the state’s residents.

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