Our Wealth, Poverty Extremes Top Other States’

A working paper from the University of Minnesota takes a new approach in explaining rising levels of neighborhood inequality by highlighting the relative isolation of affluent, white households in 15 major metropolitan areas throughout the United States.

While researchers and policymakers often have focused on the segregation of racial and ethnic minorities and the disadvantages caused by concentrated poverty, areas that are segregated by virtue of having an unusually large share of wealthy, white households are even more common in the United States – and are just as important to understand at a local level.

Applying the methodology used by the University of Minnesota researchers, DataHaven finds that extreme wealth and extreme poverty are highly concentrated in Connecticut neighborhoods – even compared to neighborhoods in the 15 other large metropolitan areas used as a sample in the working paper. For instance, 27 percent of Connecticut’s top-earning households reside in predominantly-white, wealthy neighborhoods – compared to just 10 percent of top-earning households in the national sample. And in Greater Hartford and Greater New Haven, poor residents are as likely to live in a racially-segregated, extreme-poverty neighborhood as are poor residents of Greater Detroit or Greater Philadelphia.

As a small, densely-populated state, we feel that Connecticut is comparable to any large metropolitan area – particularly the crescent-shaped, urban corridor that runs across Fairfield and New Haven counties and then northward to Hartford. For statistical purposes, the Census Bureau splits Connecticut into three smaller MSAs: Bridgeport (Fairfield County), New Haven (New Haven County), and Hartford (Hartford, Tolland, and Middlesex counties), but this corridor as a whole is larger in population size, and higher in population density, than many large metropolitan areas including St. Louis, Portland, and Baltimore. The population of the Minneapolis-St. Paul area is only 10% larger, but is spread out over a land area that is more than twice the size.

Defining Racially-Concentrated Affluence and Poverty

The University of Minnesota working paper documents how ​“racially concentrated areas of affluence,” or RCAAs for short – defined as neighborhoods that consist of affluent as well as overwhelmingly-white residents – exist in large numbers throughout America’s large metropolitan areas. RCAAs are more common than neighborhoods at the other end of the continuum: ​“racially concentrated areas of poverty” (RCAPs), a widely-used designation of neighborhoods that face extremely high rates of poverty and consist of residents who primarily identify themselves as people of color.

The working paper examines 15 of the country’s largest metropolitan statistical areas (MSAs) using 2008-12 tract-level Census data from the American Community Survey. It defines an RCAA as a neighborhood in which at least 90 percent of the population is white and the median household income is at least four times the federal poverty line, further adjusted for local cost of living. An RCAP is defined as a neighborhood in which less than 50 percent of the population is white, and at least 40 percent of the population has a household income below the federal poverty line. Neighborhoods are defined as Census Tracts, which are small areas that have a population of around 4,000 residents on average.

DataHaven used this same methodology to examine racially concentrated affluence and poverty in Connecticut. Our analysis also examined ​“near-RCAPs” – an alternative definition of concentrated poverty that we feel is also relevant to Connecticut cities. Like RCAPs, these are neighborhoods in which most residents do not identify themselves as white, but differ in that a slightly smaller fraction of the population (between 20 and 40 percent) has a household income below the federal poverty line. Many studies have demonstrated that neighborhoods with a poverty rate of at least 20 percent are just as susceptible to the challenges of concentrated poverty as neighborhoods with an at least 40 percent poverty rate. While the total population living in poverty is growing more rapidly in suburban areas than it is in cities, the analysis reveals that disadvantaged, racially concentrated neighborhoods are still much more common within older urban centers than in suburbs (see map).

Worlds Apart

In Connecticut as a whole, segregated, affluent neighborhoods outnumber segregated, extremely poor neighborhoods. There are twice as many RCAAs (80 Census Tracts, home to 10% of the state’s population) as there are RCAPs (41 Census Tracts, home to 3% of the state’s population). In Greater Bridgeport (Fairfield County), which consists of many wealthy New York City suburbs, there are nearly 7 times more RCAAs than RCAPs.

Segregated affluent and poor neighborhoods represent two extremes in Connecticut. Of people living in RCAAs in Connecticut, 93 percent identify as non-Hispanic white, 1 percent black, 3 percent Hispanic, and 3 percent another race; median annual household income is over $120,000 and the poverty rate is 4 percent. Meanwhile, of people living in RCAPs, 51 percent are Hispanic, 28 percent are black, 16 percent are non-Hispanic white, and 5 percent are another race; median annual household income is around $23,000 and the poverty rate is 47 percent.

DataHaven’s spatial analysis of Connecticut shows that RCAAs are found in suburban towns, while RCAPs cluster in urban centers. Likewise, the rural northeast and northwest regions of the state are mostly devoid of neighborhoods with racially segregated wealth and poverty, at least when considered at the level of a Census Tract. Furthermore, it is rare that predominantly-white, affluent neighborhoods directly border non-white, impoverished ones (a national trend described by The Atlantic​’s City Lab blog), with several neighborhoods usually lying between RCAAs and RCAPs. Only in a handful of locations, such as in Fairfield, Bridgeport, and Norwalk, do RCAAs directly border RCAPs or near-RCAPs. That said, RCAPs and RCAAs often exist in relatively close proximity, as many workers living in Connecticut’s RCAPs commute to its more affluent suburban areas (which tend to have lower-paying jobs than urban centers), and vice versa.

Comparing ​“Concentrated Affluence” in Connecticut to Other Large Metro Areas

Connecticut is a wealthy state with a relatively prosperous middle class, often ranking as the top state in the nation on various measures of wealth and median income. However, it also has among the nation’s highest levels of income inequality: in 2012, average income among the top 1% of Connecticut was $2,683,600, while it was $52,603 among all other households. Further gaps in income by race and ethnicity are well known, but the trends behind the uneven geographic distribution of income by neighborhood are less well-documented.

In Greater Bridgeport (Fairfield County) and Greater Hartford, the share of the population that lives in racially concentrated and affluent neighborhoods is higher than that of most other major cities examined in the Minnesota working paper. Statewide, 10 percent of all Connecticut residents live in RCAAs; in the 15 large urban regions studied in the paper, an average of 3 percent of the population lives in RCAAs. 17 percent of Greater Bridgeport’s residents and 13 percent of Greater Hartford’s population resides in RCAAs, compared to 8 percent, 7 percent, and 7 percent in the Boston, Minneapolis, and St. Louis metropolitan statistical areas respectively (the three regions with the highest shares of population in RCAAs according to the paper). Greater New Haven, with 5 percent of the population living in RCAAs, demonstrates more typical levels of exposure to racially concentrated affluence.

Looking at the neighborhoods where the top-earning households live provides an additional measure of concentrated wealth. In Connecticut, 27 percent of all top-earning households (those with incomes of $200,000 or more annually) live in RCAAs, whereas in Minnesota’s 15-region sample, an average of 10 percent do. Thirty-seven (37) percent of Greater Bridgeport’s top-earning households and 26 percent of Greater Hartford’s top-earning households live predominantly-white, rich neighborhoods. These measures are 23 percent, 20 percent, and 19 percent in St. Louis, Minneapolis, and Boston respectively (the cities in the University of Minnesota study with the highest percentages for this indicator). In Greater New Haven, 14 percent of the wealthiest households live in RCAAs.

Concentrated Poverty and ​“Double Jeopardy”

The DataHaven study also shows that in Connecticut, despite its wealth, a substantial share of the population is exposed to extremely high rates of neighborhood poverty. Three (3) percent of Connecticut’s total population lives in RCAPs – a rate that matches that of the University of Minnesota’s 15-region sample. In both Greater Hartford and Greater New Haven, 5 percent of the population lives in RCAPs, which though smaller than the share in Greater Detroit (8 percent), Phoenix (6 percent), and Philadelphia (6 percent), is still larger than the share in Greater Boston (1 percent), St. Louis (3 percent), Minneapolis (2 percent), or Greater Bridgeport (1 percent).

Another key indication of the level of concentrated poverty at a regional level is the percentage of the poor population that lives within a concentrated poverty neighborhood. This is sometimes known as ​“double jeopardy,” because of strong evidence that exposure to multiple layers of disadvantage is more deleterious to health, child achievement, and well-being than any single indicator of poverty.

In this indicator, Connecticut fares worse than most of the other large cities in Minnesota’s 15-region sample. Statewide, 15 percent of Connecticut’s poor population, and an average of 12 percent of the poor population within the 15-region sample, lives in an RCAP. The percentage of Greater Hartford’s poor population residing in RCAPs is 22 percent, and in Greater New Haven, it is 18 percent. These high shares of the poor population in ​“double jeopardy” are similar to those found in the urban areas with the highest percentages in the University of Minnesota study: 25 percent in Detroit, 22 percent in Philadelphia, and 20 percent in Phoenix. In Greater Hartford and Greater New Haven, a much greater share of the poor population lives in racially-segregated, poor neighborhoods when compared to cities like Boston (5 percent), St. Louis (13 percent), Minneapolis (10 percent), and Greater Bridgeport (8 percent).

Implications and Conclusion

University of Minnesota researcher Edward Goetz describes the implications of concentrated wealth and poverty in The Atlantic article. RCAPs are often the focus of social policy and urban research that seek to ameliorate the entrenching outcomes of concentrated poverty – for example, by steering investments to such areas. Consequently, policymakers may overlook the existence of RCAAs and the potential impacts caused by the segregation of affluent families on such a large scale. Evidence suggests that the residential segregation of families by income is rising more rapidly in Connecticut than elsewhere – for example, a study by Reardon and Bischoff showed that the proportion of New Haven area families living in either ​“poor” or ​“affluent” neighborhoods rose from 6.4 percent in 1970 to 30.5 percent in 2007, representing one of the most rapid increases of neighborhood income polarization in the United States.

Goetz writes that a high number of racially segregated, affluent neighborhoods ​“can inhibit the pursuit of region-wide remedies… [and] a sense of shared destiny within a metropolitan area.” Sociologist Douglas S Massey notes that ​“the social worlds of the rich and poor will diverge… [divorcing] the interests of the rich from the welfare of the poor.” In other words, spatial divisions can compound economic or ethnic differences, and undermine efforts to improve the lives of populations that face historic and current disadvantages. Massey writes that the geographic concentration of wealth facilitates the distribution of resources and other privileges to the small share of the population that lives there, which over time can further inequalities between rich and poor areas. In regions where the wealthiest live separately from the poorest, social and financial resources may not be shared to solve regional issues, a situation that is likely to undermine the economic competitiveness of the entire region. The Atlantic references the case of affluent Oakland County, Michigan, adjacent to Detroit, as a potential example.

Compared to other regions, metropolitan Connecticut is remarkably wealthy; yet, its urban areas are as or more segregated along income and racial lines as America’s other large metropolitan regions. In particular, an unusually high share of Connecticut’s poor residents are concentrated within neighborhoods that are racially segregated and extremely poor, exposing them to multiple layers of disadvantage that will result in high social and economic costs to the entire region over time.

According to Sarah Treuhaft of PolicyLink, strategies to address racially concentrated affluence and poverty include fair housing and zoning policies that prevent subsidies for new developments that simply perpetuate the existing patterns of segregation, as well as targeted investments in comprehensive community development, education, workforce development, and transportation in RCAPs to better connect people to economic opportunities. Additionally, efforts to understand the disparities between neighborhoods in urban regions are crucial to dispelling the “[erosion of] empathy” that results from concentrations of affluence and poverty. Programs like the 2015 DataHaven Community Wellbeing Survey, a collaborative effort of over 100 partners that is interviewing nearly 20,000 randomly-selected residents this year to create the first-ever shared measures of economic and social well-being across statewide, regional, town, and neighborhood levels, can help identify opportunities for Connecticut to focus on equity-driven approaches that will make it a healthier and wealthier place for all residents to live.

Mary Buchanan is the project manager and Mark Abraham is the executive director of DataHaven, a formal partner of the National Neighborhood Indicators Partnership with a 25-year history of public service to Greater New Haven and Connecticut.