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U.S. Cities’ Massive Wealth and Education Gaps

researchsnappy by researchsnappy
July 23, 2020
in Investment Research
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U.S. Cities’ Massive Wealth and Education Gaps
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Two crosscutting trends in the results underscore the magnitude and durability of these racial disparities. One is that they persist in cities from the most to the least affluent. Neither weathered urban centers in the Rust Belt trying to emerge from post-industrial decline nor the high-flying “superstar cities” along the coasts and through the Sun Belt are exempt from these inequities.

In fact, because the Sun Belt cities have created so many high-paying information-age jobs, which are filled mostly by white people, the gaps are often wider in those places. In Cleveland, Detroit, and St. Louis, for instance, the median wage for white residents is about $6 per hour greater than that for people of color. That white advantage is more than $8 an hour in Denver and Dallas, nearly $10 an hour in San Francisco, and over $14 an hour in San Jose. Additionally, the education gap between white and non-white adults is often wider in the cities that are thriving than in those that are still struggling, largely because many more white people in prosperous cities hold degrees.

Pastor says the performance of the leading information-economy cities (which includes traditional powerhouses such as Boston and New York) signals a departure from the urban experience of the previous few decades. Through the late 20th century and into the early 21st, overall economic growth was greatest in the metro areas that did best on measures of racial inclusion. Not now.

Read: Trump is determined to split the country in two

“The new economy, [which] emerged out of the Great Recession being so information-driven and oriented to higher-educated individuals, may be changing our metropolitan areas” in a way that produces greater inequality, Pastor told me. “In the past, we could say that as a region was more equitable, it might grow more sustainably over time … But what we can see here with this data is that you can have robust economic growth and still be falling pretty short on racial equity and inclusion.”

The second ominous trend in the new results is that even with steady growth from 2009 until the onset of the coronavirus pandemic this spring, many of these disparities are wider than they were 10, 20, or even 30 years ago.

In 65 of the 150 metros, the gap in the median hourly wage between white workers and workers of color since 2000 has widened by at least $1 an hour; the gap has narrowed by at least $1 per hour in only six of the metros. (The rest saw small changes in either direction.) The trend in adults’ educational attainment is only slightly more optimistic: Since 2000, the college-degree gap between white people and people of color has widened substantially in 50 of the metros, narrowed appreciably in just 15 of them, and changed little in the other 85.

The persistence of these disparities underscores how local trends reflect changes in the larger economy, particularly the rise in inequality that’s tilted gains toward the top and the low wages that still define the service sector, “where people of color are concentrated,” Treuhaft says.

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