The divergence between rich and poor is growing in some regions, creating affordability problems and straining fiscal budgets.
America is increasingly the land of haves and have-nots, but the problem isn't shared equally across the country. Some cities are struggling with greater income inequality than others, leading to crises concerning wages and affordability, according to a new study from The Brookings Institution, which examined income data from the country's biggest 100 cities.
Inequality is typically viewed as a national problem, yet the issue is also local, given that some cities are struggling with how to cope with a widening gap between rich and poor. That can affect everything from housing affordability to public safety, especially in tech-heavy cities where wealth divisions are exacerbating social and financial problems.
Cities that sprawl and those with strong middle-class employment tend to have lower levels of income inequality, while older cities that lack stable middle-class neighborhoods are more likely to suffer from a widening gulf between rich and poor, the researchers said.
"Some cities posted stunning increases in top incomes from 2014 to 2016," Alan Berube, senior fellow and deputy director of the Metropolitan Policy Program at Brookings wrote in the report. "The most astonishing changes in the mid-2010s occurred among high-income households in a few cities characterized by booming technology economies."
That has implications for the city that Amazon (AMZN) picks as home to its HQ2, or its second headquarters. The online retail giant has narrowed down its list to 20 contenders, ranging from Boston to Los Angeles.
"Many cities' aggressive bids for Amazon's second headquarters are heightening anxieties that the company's expansion could further accelerate inequality wherever it eventually lands," Berube noted.
Nevertheless, it's not only the rich who are better off. Poor residents in some cities have also enjoyed income gains, which paints a complicated picture of income inequality. The past decade of economic growth has created "separate ebbs and flows for households at different extremes of the distribution," he noted.
The problem, however, occurs when poor or middle-class families don't see that "flow" at the same time as the city's richest residents. In that case, they could get priced out of the region before they have a chance to catch up.
Read on to learn about the nine cities with the deepest income inequality.