By Michael Mumper
Last fall, the Atlanta Journal-Constitution reported that the City of Atlanta has the highest Income Inequality of all metropolitan cities in the United States.
Really? How is that measured? And how bad are we? And is it actually a bad thing?
The “Gini Coefficient” measure
In the 1920’s an Italian economist and statistician named Corrado Gini developed a measure of “statistical dispersion” that is used to measure how wide differences are in income and wealth, though the measure has also proven helpful in other fields. This measure is now known as the Gini coefficient.
Using the Gini coefficient to measure income differences, a score of 0 means everyone has the same income, while 100 represents the maximum disparity (as in one person earning all the income). Of 134 countries whose income disparities have been measured, Sweden’s is lowest at 23 (Sweden is “the” socialist country, right?), while Namibia is highest at 71. (In the chart referenced in the previous link, you can click on the up/down arrows at the top of the chart to sort that column. In this article I am referencing the CIA numbers.)
You’ll notice that most European countries have a measure between 23 and 35. The highest scores tend to be in Africa, with many countries scoring between 60 and 71.
United States’ Income Inequality
Different organizations have different measures, though they tell a similar story. The World Bank scores the US at 41, while the Central Intelligence Agency scores us at 48.6. The US Census Bureau scores the US at 46, noting that this income inequality has increased from 40 since 1967. This would put us as the 94th least equal county out of the 134.
Referencing the same list of country-by-country Gini coefficients as earlier, this puts income inequality in US higher than Iran, Nigeria and Nicaragua.
Closer to home, in Georgia and Atlanta
Again, according to the US Census Bureau (page 4 of this link), Georgia is slightly higher than the US average, at 46.5.
Metro Atlanta is at 45.2 (page 7).
The City of Atlanta at 57.1 (page 12). This puts our city’s income inequality a little better than Honduras (57.7), Columbia (58.5) and Haiti (59.2), but not quite as “equal” as Guatemala (55.1) and Brazil (53.9).
More studying to do – any ideas?
I don’t know exactly what to make of this analysis. I’m sure income equality like Sweden’s is not what we’re after. But I am a little concerned by inequality approaching Haiti’s. And the fact that the income inequality is getting worse is doubly troubling. It’s going to take a bit more learning for me to understand how we got here, how “good” or “bad” this is, and what risks we have being there. And, if necessary, how we get this number to a better place.
If anyone has any thoughts about where I find this kind of analysis, please send me a comment or email with direction.
See Michael Mumper’s bio in the About Us section above.