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4 decades of inequality

We all know the story: Much of the world is becoming increasingly less equal thanks to the new knowledge economy. Using data from the Federal Reserve Bank of New York, the NY Times (Emily Badger and Kevin Quealy) recently published this interesting piece on “4 decades of inequality” in American cities. This is what the findings look like:

In 1980, the United States was relatively flat in terms of wage inequality (except for maybe Fairfield). In fact, inequality in a place like Binghamton, New York was about the same as in New York City. But thanks to decline in the former and growth in the latter, New York City is now a much more unequal place.

Economic growth is usually considered a good thing, but inequality is not. Emily and Kevin rightly call attention to the fact that — according to the above charts — these two things seem to come together as one package. See New York, Chicago, San Francisco, San Jose, Washington, D.C., and so on.

The other takeaway from these charts is the way in which inequality seems to correlate with metro area population. We know that as the population of a city increases it tends to also become more productive. And so what we are seeing here are those urban agglomeration benefits accruing to some, but not all.

There’s a lot that can be inferred from these charts.

1 Comment so far

  1. Is the world becoming more unequal because of the knowledge economy in and of itself? I doubt it. It’s likely because of our tax structure that allows companies like Amazon to pay much less of their fair share of taxes that in turn starves social services that would otherwise prevent inequality.

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