Why the Economic Fates of America’s Cities Diverged
Despite all the attention focused these days on the fortunes of the “1 percent,” debates over inequality still tend to ignore one of its most politically destabilizing and economically destructive forms. This is the growing, and historically unprecedented, economic divide that has emerged in recent decades among the different regions of the United States.
Until the early 1980s, a long-running feature of American history was the gradual convergence of income across regions. The trend goes back to at least the 1840s, but grew particularly strong during the middle decades of the 20th century. This was, in part, a result of the South catching up with the North in its economic development. As late as 1940, per-capita income in Mississippi, for example, was still less than one-quarter that of Connecticut. Over the next 40 years, Mississippians saw their incomes rise much faster than did residents of Connecticut, until by 1980 the gap in income had shrunk to 58 percent.
Yet the decline in regional equality wasn’t just about the rise of the “New South.” It also reflected the rising standard of living across the Midwest and Mountain West—or the vast territory now known dismissively in some quarters as “flyover states.” In 1966, the average per-capita income of greater Cedar Rapids, Iowa, was only $87 less than that of New York City and its suburbs. Ranked among the country’s top 25 richest metro areas in the mid-1960s were Rockford, Illinois; Milwaukee, Wisconsin; Ann Arbor, Michigan; Des Moines, Iowa; and Cleveland, Ohio.
During this period, to be sure, many specific metro areas saw increases in local inequality, as many working- and middle-class families, as well as businesses, fled inner-city neighborhoods for fast-expanding suburbs. Yet in their standards of living, metro regions as a whole, along with states as a whole, were growing much more similar. According to data from the Bureau of Economic Analysis, in 1940, Missourians earned only 62 percent as much as Californians; by 1980 they earned 80 percent as much. In 1969, per capita income in the St. Louis metro area was 83 percent as high as in the New York metro area; it would rise to 90 percent by the end of the 1970s.
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http://www.theatlantic.com/business/archive/2015/11/cities-economic-fates-diverge/417372/
