Given what is going on in Baltimore and other cities in the US right now, I thought it would be worthwhile to share an interesting article from City Observatory talking about income disparity and racial segregation in cities.
There are significant racial income gaps in the United States (as well as in Canada). According to City Observatory, the average black household earns 42% less than the average white household in America. There is, of course, lots of regional variation, but this is what it looks like nationwide.
The interesting thing about this racial income gap though, is that there’s one factor that seems to account for the bulk (up to 60%) of the variation: residential segregation. In other words, the more segregated a city becomes, the more this black/white income disparity increases.
Here’s a snippet from Joe Cortright of City Observatory:
…there are good reasons to believe that high levels of segregation impair the relative economic opportunities available to black Americans. Segregation may have the effect of limiting an individual’s social networks, lowering the quality of public services, decreasing access to good schools, and increasing risk of exposure to crime, all of which may limit or reduce economic success. This is especially true in neighborhoods of concentrated poverty, which tend to be disproportionately neighborhoods of color.
We also know that there are all kinds of negative externalities associated with income inequality. Therefore, there’s a strong case to be made for addressing segregation and the spatial organization of our cities.
I recommend you read the City Observatory article for a more nuanced explanation of the above relationship.