By Forum Staff
On average, the uppermost 80 percent of households earn more than four and half times what the bottom 20 percent earns. For example, in one city, the highest-earning households may average $140,000 annually or higher—compared to a $30,000 income earned by the bottom fifth of residents. This income inequality can divide local communities by creating disparities in housing, goods and services.
Photo Courtesy of Wikimedia/Dllu
The income ceiling for the bottom 20 percent of earners in the five boroughs is $27,448.
With this in mind, SmartAsset, an online destination for consumer-focused financial information and advice, a national marketplace connecting consumers to financial advisors, ranked 98 of the largest U.S. cities by the size of their income inequality, measured by comparing the incomes of the top 80 percent of earners with the bottom 20 percent.
Key findings include:
- Three cities from the New York City metro area rank in the top 10 for highest income inequality. Newark ranks third, with the highest earners making over 6.8 times as much as the lowest earners. Jersey City ranks fourth, at 6.1 times the earnings for the upper quintile. And New York City ranks sixth, with top earners making about 5.8 times more than their low-income counterparts. New York City’s top quintile makes at least 5.77 times as much as the 20th percentile. The highest income is at least $158,335, while those at the 20th percentile earn $27,448.
- New Orleans has the highest income inequality of major U.S. cities. While the highest earners make 7.8 times as much as the lowest earners in New Orleans, they still earn lower than average ($110,800) when compared to other cities. But the bottom 20 person of earners in New Orleans has the lowest income ceiling studywide, making less than $14,078 annually.
- Incomes are most equal in Chesapeake, VA. Thanks to a relatively high-income threshold for the lowest-earning quintile in Chesapeake, high earners only make 3.8 times as much – the smallest multiplier studywide. High earners bring in a minimum of $152,000. Other cities with relatively small income discrepancies are Boise, ID (at 3.9 times) and Aurora, CO (at 4 times).
- More than one-fifth of households make more than $200,000 annually in these cities. The top 80 percent in Arlington, VA made $233,500 or more. For Bay Area cities, including Oakland and Fremont, CA, the highest earners made more than $223,500. In Seattle, WA, top earners made more than $209,000 annually.
