Tag Archives: inequality

The wealthy continuing to give to wealthy universities and colleges

Posted on by

Gregg Easterbrook, ESPN’s Tuesday Morning Quarterback, continues to highlight a pattern: wealthy donors giving to already wealthy universities and colleges:

Don’t Give to Harvard! A running TMQ cause is that rich people give money to schools such as Harvard, Yale and Stanford, places already possessing gargantuan endowments, rather than to schools where money is needed. The rich underwrite elite schools for ego reasons — at cocktail parties they can say, “I just donated $10 million to Harvard, now a shower stall will be named after me.” At colleges and universities that serve average people, donations can change lives. If you’ve got money, donate to noble Berea College, which accepts only poor students and charges no tuition, or to gallant Bethune-Cookman, a historically black school that mainly serves the underprivileged. Alumnus Charles Johnson just gave $250 million to Yale — which is already sitting on a $19 billion endowment. At a place like Berea College, $250 million would have been a transformative event in the lives of the deserving. At Yale, it’s a rounding error in the lives of the privileged.

Reader Jon Miller of Beaumont, Texas, notes that despite having a world’s-best endowment of $32 billion — nearly double the GDP of Honduras — Harvard just kicked off a capital campaign, asking for another $6.5 billion. Rich people, show a little class: Don’t give to Harvard. Or Yale, Princeton or Stanford. Make your donation count.

This gets back to an old question: do elite universities perpetuate social inequalities? If giving patterns changed as Easterbrook suggests, perhaps there might be a shift…

Looking at inequality in NYC by translating wealth differences into building heights

Posted on by

It can be difficult to visualize inequality but here is an innovative way of doing so: imagining wealth as buildings in New York City.

In his most recent visualization project, the Pittsburgh-based artist and researcher re-imagines what the city’s skyline would look like if building height were a direct reflection of a neighborhood’s net household wealth. “I was inspired to create this project after standing atop Mt. Washington in my hometown of Pittsburgh and looking at the Pittsburgh skyline,” he explains. “I thought to myself, ‘What if you could actually see inequality?’ This relatively even landscape would look much different.”

Lamm, who is responsible for other viral visualizations like Normal Barbie, translated Esri’s map of median household net worth in New York City (based on 2010 Census data) into the bright green 3-D bars you’re looking at. Every $100,000 of net worth in a section on Esri’s map equals one centimeter in height on Lamm’s visualization. So if one section (which appears to consist of multiple blocks) had a net worth of $500,000, Lamm’s rendering would measure 5 cm high. Similarly, if another section had a net worth of $80,000, the green would appear at a much flatter 0.8 cm.

Of the maps/visualizations available here, the best one is probably the first one that shows much of Manhattan from the northwest looking southeast.

Choosing to visualize wealth rather than income is a strategic choice. Much talk about inequality involves income but this may be the wrong metric. Income is more about short-term access to money but wealth may be more important for longer-term outcomes (purchasing a house, etc.) and the wealth differences between groups are quite a big larger. For example, the differences in wealth between the top 5% and the rest of America are astounding as are the differences between whites and blacks as well as Latinos.

Additionally, singling out New York, particularly Manhattan, is an interesting choice. The differences here are indeed stark. Manhattan is the seat of the financial sector. But, few places in the United States would have this much wealth inequality.

More Chicago area houses purchased with cash

Posted on by

In perhaps another sign of the bifurcated housing market, more and more buyers are purchasing Chicago area homes with cash:

Some people actually pay cash to buy a house. In fact, it happens more than you’d probably expect—in the first half of 2013, cash paid for 34 percent of all homes bought in the Chicago area, according to data that RealtyTrac released exclusively to Chicago. For the month of June, cash bought 30 percent of local homes, which was even with the national average in data the company released last week.

Many of those cash buyers were investors, either the big corporate type or the smaller individual type. But real estate agents and others say the number of end-users buying homes for their own use and paying cash has risen steeply this year. (I could not find data that breaks down which cash buyers are end users and which are investors.)

And the reasons this is happening more?

-They want to be the sharpest competitor in a multiple-bid situation. A cash offer is “the cleanest offer,” Whelan says. It assures the seller that the deal won’t fall through for lack of financing, and it typically offers a faster closing because it eliminates the wait for the mortgage process.

-They know that sellers sometimes will accept a lower-priced cash offer over a higher-priced offer that will be financed, to avoid the hassle.

-They may believe that the value of the home they want is above what an appraiser would calculate based on comps from the recent past. Paying cash instead of getting a mortgage leaps over a mortgage lender’s requirement of an appraisal, Kawabata points out.

-Although it’s been easing recently, jumbo loans—mortgages for more than $417,000 in the Chicago area—were difficult to get for the past few years so buyers of higher-priced homes had been lining up cash for the home purchases they wanted to make this year.

In other words, if you have the cash on hand, it can give you a leg up on big real estate purchases. But, this option isn’t available to most people. So, it seems like this helps those with wealth to continue to rack up the wealth through larger and/or more valuable real estate portfolios.

Edmonton floods show how wealthier city residents have more resources to deal with urban disasters

Posted on by

A sociologist argues wealthier residents of Edmonton can better respond to big floods compared to lower-income residents in places like New Orleans:

While flooding did affect Calgary’s lower-income neighbourhoods, including Bowness and Montgomery, their gentrification in the past decade has attracted a more middle-class crowd.

As such, the dynamics of recovery in the city will differ markedly from past flooding disasters. The people most affected will have significant resources at their disposal, Haney said.

“It’s never easy and it’s still really traumatic, but it’s different than most floods in that, most of the time, the people who flood are the people who don’t have the ability to fund their own recoveries.”

Moreover, flooding has affected about 12 per cent of Calgary residential real estate, while about 80 per cent of New Orleans was under water for two weeks. With flooding victims able to get support from family and friends, shelters in the city have been running under capacity.

This makes sense but it is an underreported feature of disaster coverage: while lower-income residents will have much more difficulty getting back on their feet, higher-income residents can draw upon their wealth, insurance, and social networks with more resources.

It would be interesting to see how much government disaster aid goes to those with higher incomes compared to those with lower incomes. While a major flood or tornado or hurricane can be devastating to everyone, not everyone is at the same starting point in making a recovery.

The effect of neighborhoods on persistent inequality between races

Posted on by

A new book by sociologist Patrick Sharkey highlights how neighborhood conditions contribute to persistent inequality by race:

Put more bluntly:

Even if a white and a black child are raised by parents who have similar jobs, similar levels of education, and similar aspirations for their children, the rigid segregation of urban neighborhoods means that the black child will be raised in a residential environment with higher poverty, fewer resources, poorer schools, and more violence than that of the white child.

This might not seem to make sense: education gains have been fairly substantial, so shouldn’t income and wealth follow? The problem is that whites are more likely to lock in gains over generations. Blacks are more likely to be in a higher income centile than their parents than whites (55/50), and less likely to be in a lower one (44/49). But they’re more likely to be in a lower income quintile (53/41) and less likely to be in a higher income quintile (35/45). Whites are more likely to inch down and leap up the socioeconomic ladder; for blacks, vice versa.

By way of explanation, Sharkey points to the work of Northwestern sociologist Mary Pattillo on the black middle class: “When white families advance in economic status, they are able to translate this economic advantage into spacial advantage by buying into communities that provide quality schools and healthy environments for children. An extensive research literature demonstrates that African Americans are not able to translate economic resources into spacial advantage to the same degree.” In the real world, this is the reality for middle-class neighborhoods like Chatham, which struggle to maintain their economic and residential base while buffeted by violence creeping in from neighboring communities.

This research counters the idea that decreased educational differences necessarily leads to reduced wealth and spatial differences. There are other important factors at work, including the spatial context. Education is not a silver bullet that solves all of the issues related to poverty.

This would seem to line up with research on wealth differences between whites and blacks (see Black Wealth/White Wealth by Oliver and Shapiro). Even if blacks have made educational gains, wealth is partly generational. Wealth really helps with buying a home in middle- and upper-class neighborhoods that then offer better schools, environments, and social capital. And this homeownership gap is still large in the first quarter of 2013 (Table 16): 73.4% for whites, 43.1% for blacks, 45.3% for Hispanics, and 54.6% for all other races.

Inequality reproduced in new NYC bike sharing program?

Posted on by

An early report from the new bike sharing program in New York City suggests it might be reproducing existing inequalities:

And yet this was hardly the most dispiriting aspect of the whole adventure. The line for helmets was very long, and yet few of the people I spoke to were actually residents of the Rutgers Houses or any of the neighboring public housing. I did, however, meet a svelte Argentine woman in running clothes who had come from the Upper East Side. There were also two young women who taught at Bard High School Early College and lived in brownstone Brooklyn, and a woman named Barbara Becker in the company of two sons who, she said when I inquired, attend Friends Seminary in Manhattan, where annual tuition is roughly 296 times the price of an expensive bike helmet (and 1,850 times the price of a helmet you can buy at Han’s Market, a convenience store next to the Clark Street kiosk that has quickly expanded its business from milk, soda and frozen foods to biking gear).

Raulo Jeffers did live in the Rutgers Houses, as he has for 38 years. He was waiting to get a helmet for a bike he already owned. The price of annual membership to Citi Bike is $95, but the city was giving a $35 discount to residents of public housing and other low-income New Yorkers. Even with the reduction, the price was too high, he believed. “People here don’t have a lot of money,” he said. Although more than 400,000 people live in the city’s public housing, only 200 people have signed up for the discounted membership, out of a total enrollment of more than 33,000, according to the Transportation Department. A spokesman for the department said that some public housing residents may have joined at the full price.

Another man in line, Alejandro Brown, a student from the South Bronx, said he was dismayed that the bike share program had not made it “above what I call the 96th Street border.”

It is still early in the program so these issues may still be ironed out. But, should we be too surprised when those who already have more social and economic capital are more in position to take advantage of a new program that also plays into middle- and upper-class sensibilities such as being green and getting exercise? For all of the talk of bike sharing in European cities, I haven’t seen much comment about how it interacts there with social inequalities. Perhaps this is a bigger issue all around…

American median income, poverty rates, and inequality by county

Posted on by

Check out these maps of American inequality and income using the latest American Community Survey data.

The below five maps were created by Calvin Metcalf, Kyle Box and Laura Evans using the latest five-year American Community Survey estimates provided by the Census Bureau for last weekend’s National Day of Civic Hacking (we’re geeking out on these projects this week).

Working from Boston, the group has so far mapped nearly a dozen demographic points from the data, including a few they calculated on their own (be sure to check out the very bizarre map of America’s gender ratios by county). These five maps, however, jumped out at us for how they each illustrate deep and lingering differences between the American North and South, as seen through several different data points. Of course, the patterns aren’t perfect, and exceptions abound; major cities in the North turn out to be hotspots of inequality on par with much of the Deep South…

Median income (in annual dollars)

Population living below the poverty line (by percent)

Income inequality (as measured by the Gini coefficient, the closer to zero the better)

There do seem to be seem some regional differences. But, these three maps raise other questions:

1. This may be a good place for population weighted maps. While counties are one unit of geographic measure, they can obscure finer-grained data. For example, the map of median income shows higher incomes in urban areas but this glosses over poor urban and suburban neighborhoods. Plus, many of the counties in the South, Great Plains, and Mountain West have relatively fewer people.

2. The income map shows one story – generally higher incomes in urban areas – and the inequality, measured by the Gini coefficient, shows that these same urban areas have high levels of inequality. This may be an issue with the county measure but it also highlights that while cities are economic engines, they are also homes to pronounced inequality.

Poor Chicago neighborhoods have fewer businesses compared to the average American poor neighborhood

Posted on by

Chicago’s poor neighborhoods aren’t just lacking businesses. These Chicago neighborhoods have significantly lower numbers of businesses compared to poor neighborhoods in other American cities.

Translated: that means Chicago’s poorest neighborhoods are tremendously business-poor, even compared to other cities’ poorest neighborhoods. As the author, Marco Luis Small, puts it: “In some cases, the difference is stark. Chicago has 82% fewer small restaurants, 95% fewer small banks, and 72% fewer small convenience stores than a black poor ghetto in the average city…. The average black poor neighborhood in the U.S. does not look at all like the South Side of Chicago.”

The effects go beyond mere economic loss. In Heat Wave, Eric Klinenberg notes the differences between North and South Lawndale and their effects on the death rate during the 1995 heat wave:

“In North Lawndale, the dangerous ecology of abandoned buildings, open spaces, commercial depletion, violent crime, degraded infrastructure, low population density, and family dispersion undermines the viability of public life and the strength of local support systems,” he writes. “In Little Village, though, the busy streets, heavy commercial activity, residential concentration, and relatively low crime promote social contact, collective life, and public engagement in general and provide particular benefits for the elderly, who are more likely to leave home when they are drawn out by nearby amenities.”…

What struck Small when he moved to Chicago was this absence of activity—compared to, say, Harlem, which is poor but tremendously vibrant: “What I first noticed, and what took me months to get used to, was the utter lack of density, the surprising preponderance of empty spaces, vacant lots, and desolate streets, even as late as 2006. Repeatedly, I asked myself, where is everyone?”

This is part of Chicago’s exceptionalism: gleaming downtown and struggling poor neighborhoods amidst residential segregation (as discussed by Douglas Massey and Nancy Denton in American Apartheid and others). One strange aspect of all of this is the lack of conversation within the Chicago area itself about these disparities. Plenty of people are willing to discuss murders and crime rates. But, while sociologists like Mario Luis Small, Sudhir Venkatesh, Robert Sampson, Eric Klinenberg, and others have provided clear data about the lack of economic opportunities (as well as other kinds of opportunities) in poor Chicago neighborhoods, this is rarely discussed in public.

Housing recovery more than just the McMansions of Toll Brothers?

Posted on by

One analyst suggests the housing recovery in recent months is more than just an uptick in McMansions and big homes:

The housing market appears to have recovered from the depth of its decline. Toll Brothers (TOL) reported a whopping 46% jump in its latest earnings report and Home Depot’s (HD) earnings soared 18%. Today the National Association of Realtors reported that April existing home sales surged to their highest level in more than three years…

Michael Santoli, senior columnist for Yahoo! Finance, says the housing recovery seems to have a new leg based on a scarcity of supply coupled with low interest rates and growing demand.

“This can feed on itself for a while,” says Santoli, “not just with regard to Toll Brothers, which makes higher end McMansion-type houses, but across the industry.”

Santoli says not to expect a steep rise in prices from here despite a “bottleneck of demand.” And don’t expect all housing-related stocks to surge.

It would be helpful to see more exact housing figures at different levels of the market. Big homes seem to be doing okay as evidenced by the strength of Toll Brothers. But, the lower ends of the market don’t seem to be recovering as much as underwater mortgages lead to limited supply and hold the housing market back. When the housing market is truly recovering, shouldn’t a broad swath of Americans benefit? Or, are we seeing a fundamental shift in American housing where middle and lower-class residents have continuing difficulty in purchasing homes?

Rioting in the Swedish suburbs

Posted on by

Youths are rioting in the Swedish suburbs after a recent violent incident involving police:

Hundreds of youths burnt down a restaurant, set fire to more than 30 cars and attacked police during a fourth night of rioting in the suburbs of Stockholm, shocking a country that dodged the worst of the financial crisis but failed to solve youth unemployment and resentment among asylum seekers.

Violence spread across the Swedish capital on Wednesday, as large numbers of young people rampaged through the suburbs, throwing stones, breaking windows and destroying cars. Police in the southern city of Malmo said two cars had been set ablaze…

The disturbances appear to have been sparked by the police killing a 69-year-old man wielding a machete in the suburb of Husby earlier this month, which prompted accusations of police brutality. The riots then spread to other poor Stockholm suburbs.

“We see a society that is becoming increasingly divided and where the gaps, both socially and economically, are becoming larger,” said Rami Al-khamisi, co-founder of Megafonen, a group that works for social change in the suburbs. “And the people out here are being hit the hardest … we have institutional racism.”

This sounds very similar to the context of the London riots a few years ago: the police are involved in a death and local residents respond in rioting while charging that this is part of a long line of negative actions taken by the police and government. However, we wouldn’t want to “commit sociology” by trying to explain such actions, would we?

This is a reminder of the state of some European suburbs where immigrants and lower-class residents live in run-down neighborhoods isolated from the native European society and opportunities for jobs and education. This is a different geography compared to the United States where rioting is linked to poor inner-city neighborhoods. But, the situations are alike: there is long-standing isolation, negative treatment from the government and police, and not much of a pathway to achieving the “good life” in society.