Chicago's middle class vanishing

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Chicago Sun-Times
By: Dan Mihalopoulos
July 2, 2014

The income divide in Chicago is becoming a chasm.

Income inequality has become one of the hottest topics in campaigns for every office from the governor's mansion to the City Council. The numbers prove it's not just political catchphrase -- especially in the city of Chicago.

Journalism professor Darnell Little and his Medill Data Project at Northwestern University crunched census income data for the Chicago Sun-Times and found that the wealth gap is widening faster in Chicago than in the suburbs or in the state and country in general.

Statistically speaking, the best way to gauge wealth distribution is a measure called the Gini index. It's a scale from 0 to 100 in which 0 represents total, utopian equality -- i.e., each of us is paid the same amount of money -- and 100 means one person is hoarding every last penny.

In 1990, Chicago registered 44.9 on the Gini index. That suggested an only slightly greater level of disparity in the city than for Illinois as a whole, which recorded a score of 44.3 that year.

Jump to 2012, the most recent year for which federal income data is available on a city and county level. Chicago had risen sharply to 51.9 on the income-inequality scale -- far worse than the 46.5 for the entire state and 47.1 for the country.

The top 5 percent of earners made more than 25 percent of the total income that was paid to Chicagoans, according to the Medill Data Project's calculations.

Meanwhile, wages for the 20 percent who made the lowest incomes in 2012 represented only 2.45 percent of the total amount in everybody's paychecks.

What all that means in real dollars is that your household had to rake in at least $200,708 in 2012 to rank among Chicago's wealthiest 5 percent.

No household in the bottom 20 percent was paid more than a total of $17,141.

The problem doesn't stop at the city limits. The analysis found more income inequality in every county in the metro area than there was in 1990.

Still, for all the talk about the growing ranks of the suburban poor, the Gini index scores for each of the five collar counties in the Chicago area indicated a much narrower wealth gap in the suburbs than in the city.

None of this will come as any surprise to those who talk about Chicago as a tale of two cities. Anybody who goes downtown or to one of the fashionable, gentrified neighborhoods near it can see how the rich have reversed their decades-long retreat and taken a renewed interest in the city. Poverty and the problems that come with it remain endemic in much of Chicago, of course.

It's a phenomenon that isn't unique to Chicago. In an article headlined "The Coring of the Big Apple," the New Yorker's James Surowiecki wrote in September about "New York's incredible shrinking middle class."

"Whereas the percentage of New Yorkers in poverty is still roughly what it was in 1980, the percentage of New Yorkers who are part of the middle class has fallen dramatically," he wrote.

There, the issue of income inequality was the central theme of new Mayor Bill de Blasio's campaign. But Surowiecki doubted that de Blasio can do much to change the situation, in great part because most middle-wage manufacturing jobs have vanished from New York, just as in Chicago, and because housing costs have skyrocketed.

There may be only so much any mayor can do to reverse the trend. And, as with so many of Chicago's problems, the numbers could allow Mayor Rahm Emanuel to argue that he inherited a situation of vast income inequality from Mayor Richard M. Daley.

But having a solid middle class should be a hallmark of any democratic -- and Democratic -- American city and state.

It's not enough for candidates to merely bemoan how much titans of corporate America make when compared to the average income. It also isn't enough to decry how the minimum wage has risen more slowly than inflation, leaving many full-time workers unable to support families.

Voters in the governor's race in November and in the mayoral and council races in next February's city election should demand that candidates offer up specific plans for lessening income inequality.

The true measure of their success could be whether they manage to lower Chicago's all-too-high position on the Gini index.

http://politics.suntimes.com/article/chicago/chicagos-middle-class-vanishing/tue-07012014-453pm

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This page contains a single entry by CFED published on July 9, 2014 3:14 PM.

Setting Down Financial Roots was the previous entry in this blog.

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