The Income Gap between Men and Women: 2015 vs. 1970

Since 1970,  inflation adjusted wage income growth has been almost nonexistent – only five percent over the 45 year period ending in 2015.  Income change in metropolitan areas in New York State has differed little from the nation.  Rochester and Buffalo were two exceptions – both had lower median real wage incomes in 2015 than in 1970.  Because of the declines in upstate’s two largest metropolitan areas, upstate real wage incomes overall were 5% lower in 2015 than they were in 1970.

In an earlier post examining inflation adjusted wage income changes in New York State Metropolitan areas, I found that although incomes have stagnated since 1970’s, education and age have become increasingly important in determining the changes that have occurred.  Overall, people aged between 25 and 29 with high school educations or less had median wage incomes in 2015 that were 38% lower than in 1970.  College graduates aged 50 or older had income gains averaging 6%

In a second post, I examined the gap in real wage incomes between black and white residents and found that the gap had not decreased over the 45 year period.  In fact, in upstate metropolitan areas, the gap was somewhat larger in 2015 than it was in 1970.

This post examines changes in inflation adjusted wage income as they affect men and women in New York State and the nation.  While real wages have been relatively stable since 1970,  wage incomes for men, particularly younger men with high school educations or less, have shown sharp declines, while those of women have substantially increased.  Nevertheless, a wage gap between the sexes remains.

The Data

The Census Bureau defines personal wage income as total pre-tax wage and salary income – that is, money received as an employee – for the previous year. Annual wage income includes the amount of wage income received by all people having wage income in a year, including those who worked full or part-time, and those who worked only part of a year as well as those who worked all year

Data, as in my earlier posts, is from Public Use Microdata samples made available by the U. S. Census Bureau (Steven Ruggles, Katie Genadek, Ronald Goeken, Josiah Grover, and Matthew Sobek. Integrated Public Use Microdata Series: Version 6.0 [dataset]. Minneapolis: University of Minnesota, 2015. http://doi.org/10.18128/D010.V6.0) Public Use Microdata Sample files (PUMS) are a sample of the responses to the American Community Survey and the Decennial Census and include most population and housing characteristics.  Because the data is from samples of households in metropolitan areas, sampling error is possible, particularly for smaller metropolitan areas.

Inflation Adjusted Wage Income – 1970

In 1970, real wage incomes of men were substantially higher than those of women.

In upstate metropolitan areas, women’s median wage incomes averaged between 40% and 50% of those of men.  Income differentials between men and women upstate were near the national average of 44%.  In the New York City metropolitan area, median wage incomes for women were higher, but were still only about 62% of those for men.  This is particularly significant, because the data here only reflects those women who reported earning wages during the year. The lower median incomes of female wage earners were not related to the fact that less than half of women were in the labor force in that year.

  • Male residents of the Rochester metropolitan area had the highest median incomes in 1970 – almost $60,000, which was substantially higher than the national median for men – $48,013.
  • In that year, the real median real wage income of men in the New ‘York City metropolitan area – $48,000  – only exceeded that in the Utica-Rome metropolitan area – $46,820.

For women, the picture was different – the real median income of women in the New York metropolitan areas was $29,500 – substantially higher than in any upstate metropolitan area or nationally.

Education

Here again, median wage incomes were strongly related to educational attainment, with college graduates earning at least 50% more than those with less than those who have less than four years of high school in most cases. For women, the differences in median wage incomes were even greater than for men — the median wage income of young women aged 25-34 was only $14,016, while that for those with 4 years of college was $33,698.  Because the effect of education on women’s income was stronger than for men in 1970, women and men with less education generally had larger median income gaps than those with more education.  But, even for women with four years of college, median incomes were substantially lower than for men – ranging from 40% to 60% of median male incomes at the same level of education.

In the New York City metropolitan area, the same relationships were present.  Women had wage incomes that were substantially lower than men, and less educated workers had much lower incomes than higher income workers.  At all levels, the gap in incomes between men and women was smaller in the New York City metropolitan area than it was in upstate metropolitan areas.   The difference between upstate metros and the New York City metropolitan area was particularly large for less educated women.

  • Women with less than four years of high school in the New York City metropolitan area had 55% to 60% of the median income of men with the same level of education, while in upstate metropolitan areas ranged from 33% to 47% of men’s median incomes, depending upon age.

For men, the picture was different – less educated male residents of upstate metropolitan areas had higher median incomes than those in the New York metropolitan area in 1970.  For college educated men, incomes were similar.

Inflation Adjusted Wage Income – 2015

By 2015, the income gap between men and women was much smaller than in 1970, but was not gone.  As in 1970, the income gap was smaller in the New York metropolitan area than it was in upstate metros.  But, the gap between men’s and women’s incomes was much smaller in both regions.

  • The median wage income for women upstate was 76.1% of the men’s median, while in New York City, the comparable percentage was 80%.
  • Two upstate metropolitan areas had the same gender wage gap as the New York City metropolitan area – Albany-Schenectady-Troy and Binghamton.

Education and the Gender Wage Gap

Though there has been progress in wage income equity since 1970, the progress has been uneven.

  • In upstate New York metropolitan areas, women with four or more years of college education have come closest to achieving equity with men – attaining median incomes of between 70% and 80% of men’s median wage incomes.
  • In contrast, women with less than four years of high school education have median wage incomes that are between 47% and 68% of men’s median incomes.
  • And, median incomes for young men and women with less than four years of high school in upstate metropolitan areas were very low in 2015- only $19,000 for men, and $9,450 for women under 35 years old.

In 2015, for men under 35 in upstate metropolitan areas, the median wage income for those with four or more years of college was $45,000 compared with $19,000 for those with less than four years of high school.  For women, the comparable numbers were $38,000 and $9,450.

In the New York metropolitan area the median wage gap between women and men was 20% – the median wage income for women in the metropolitan area was $40,000 compared with $50,000 for men.  For people with less than four years of high school, median wage incomes were more equal for men and women in the New York City metropolitan area in 2015 than they were in upstate metropolitan areas.

High levels of education were associated with large wage premiums for both women and men – those with four or more years of college had median incomes that were at least three times those with less than four years of high school education for all age groups.

The income gap between those with four years or more of college education and those with high school education or less has increased sharply since 1970.  The difference between median incomes for men with a high school education or less was 60% less than for men with four or more years of college in 1970.

By 2015, the gap had increased to 142%.  For women, the gap was 70% in 1970 and 155% in 2015.  This increase in the wage gap reflects the greater inequality of incomes in our society in 2015 compared to 1970.

Change in the Gender Gap Overall

Overall, the median wage gap between men and women decreased substantially between 1970 and 2015 – by 32% in upstate metropolitan areas and by 18% in the New York City metropolitan area.  While the decrease in the New York city area was smaller than that upstate, the New York City had a smaller wage gap than upstate metros in 1970, and continued to have the smallest gap in the state in 2015.

Upstate metropolitan areas and the New York metropolitan area also had smaller wage income gaps than the median for metropolitan areas nationally in 2015.

  • Nationally the difference between men’s and women’s median wage incomes was 29% in 2015.
  • For upstate metropolitan areas, the difference was 24%,
  • For the New York metropolitan area, the difference was 20%.

Inflation Adjusted Wage Income Gains and Losses – 2015 vs. 1970

Real median wage incomes have followed sharply different paths for men and women since 1970.  In most metropolitan areas, men’s median wage incomes have declined.  In a few, like Rochester, Binghamton, and Utica, the declines have been significant – 15% or more.  For women, the path has been up.

Median incomes for women were up sharply in 2015 compared with 1970.

  • Nationally, and in upstate metropolitan areas, the increase was slightly more than 50%.
  • In New York City, starting from a higher base in 1970, the increase was 35.5%.
  • Women’s median wage incomes were far lower in 1970 than men’s, and the gains made by women have not been large enough to erase the wage gap that existed.

In my earlier posts, I showed that inflation adjusted median incomes for people with less education were much lower in 2015 than they were in 1970.

  • The median income for those with high school educations or less was 38% lower, compared to 21% lower for those with four years of college or more.
  • In contrast, workers over fifty years old, at all educational levels had median incomes in 2015 that were close to those in 1970.

The table above shows the impact of education and age upon the difference in median wage incomes for men and women between 1970 and 2015.  It shows that for both genders, young people have fared less well than older people and that less educated workers have fared worse than more educated workers.

For young men, the decline in real median incomes between 1970 and 2015 is very troubling.

  • Young people with less than four years of high school education had real median incomes in 2015 that were 44% lower in the New York metropolitan area than in 1970, while in upstate metropolitan areas, median incomes were 53% lower.
  • The median income for men under 34 with some college experience was 37% lower in upstate metropolitan areas in 2015 than in 1970, while in the New York metropolitan area, the median real income was 43.2% lower in 2015.
  • The median income for young  workers with four or more years of college in upstate metropolitan areas was 24% lower in 2015 than 1970, while in the New York metropolitan area the decrease was 2%.

The income premium for those with four or more years of college remained substantial for young men, but in upstate New York, median incomes, even for college educated young people were substantially lower in 2015 than in 1970.

  • For less educated workers, the decline in median incomes extends to older workers as well, ranging from 35% to 45%, from 1970 to 2015.
  • But, workers with four or more years of college aged 35 or older saw only small decreases in median incomes.
  • In New York City, these workers had significant median income gains – 15% for those aged 35 to 49, and 24% for those from 50 to 64.

Less educated women – particularly those with less than four years of high school were not immune to the declines in median real incomes between 1970 and 2015.  losses ranged from 6% to 32%, and were not strongly related to age.  In fact, the gains that this group made compared with men in wage income simply reflected the declines in real wage income were smaller for women with low levels of educational attainment than they were for men.

In upstate metropolitan areas, women with four years of high school or more education had median income gains in most cases, with generally greater gains at higher educational levels.  In the New York metropolitan area, however, women in most age groups who had less than four years of college had lower median incomes in 2015 than in 1970.

The data points to the conclusion that but for the increase in the percentage of wage earners with four or more years of college, wage earners in metropolitan areas would have had much lower median wage incomes in 2015 than they did in 1970.  Clearly, the labor market has substantially less demand for workers with limited educational backgrounds than it did in 1970.

The erosion of median incomes of workers in the 25-34 year age group, especially in upstate metropolitan areas, should be of particular concern, because it may point to a long-term trend to lower wage incomes for workers who were in that age group in 2015.  As the table above shows – the performance of median incomes for men and women aged 25-34 between 1970 and 2015 was substantially weaker than it was for older workers.

  • The inflation adjusted median income of male workers between 35 and 64 in upstate metropolitan areas increased by 7.4%, while the median for those aged from 25-34 decreased by 29%.
  • The median income of women between 35 and 64 in upstate metropolitan areas was 90% higher in 2015 than in 1970.  For women aged 25-34 the increase was 40%.

Conclusions

The Pay Gap Between Men and Women

The narrowing of the wage gap between men and women is good news, although the fact that women’s median wage incomes continue to be lower than men’s is not.  In 1970, the median wage income for women was less than half of men in upstate metropolitan areas, and about 60% of that for men in the New  York metropolitan area.  In 2015, the gap between median incomes for men and women was between 20% and 30% in upstate metros, and 20% in the New York metropolitan area.

By controlling for education and age, the data shows that women with less educational attainment face larger income gaps than men, particularly upstate, where women with less than four years of  high school earn between 48%  and 68% of what comparably educated men in the same age groups earn.  Even so, the gap between college educated men’s and women’s real incomes ranged from 15% to 35%.

The data used in this analysis does not, in itself give explanations for the continuing wage gap.  While the effect of age and educational levels are controlled for here, the analysis does not compare people with the same jobs in the same industries to determine the extent of differences between women’s and men’s incomes.  If women participate more in lower paying occupations with similar educational qualifications than men, that could account for some of the difference in wage incomes.

The data from this study is consistent with other studies that do compare incomes of men and women in the same occupations.

This chart, reprinted from “The Simple Truth about the Gender Pay Gap (Spring 2017), published by the American Association of University Women, shows that weekly earnings of men in the same occupations as women are ten to twenty percent higher than women’s.  So, it is reasonable to ask, as in the case of the lower incomes of black/African-American workers, whether existing prohibitions against wage discrimination are being effectively enforced.  It is important to note that discrimination may or may not be explicit and intentional – but may also reflect the relative absence of women in high level management positions who could offer the equivalent of  “old boy networks” to help women get good jobs and higher pay.  Thus, enforcement could be very difficult.

A recent article in The Atlantic, “How Do We Close the Wage Gap in the U.S.?” by Bourree Lam suggests some solutions.  One part of the gap is believed to be caused by what is called “the motherhood penalty.”  Lam argues that, “There are two ways to go about fixing this huge part of the gender wage gap. The first is for companies or the government to implement policies that enable women to be both moms and workers, such as paid family leave and supported childcare. But there’s also a cultural shift that needs to happen: The assumption that mothers are not as good at their jobs, not deserving of promotions, or won’t work as hard is discrimination. Employers need to do their part in seeing women who are mothers as valued as employees.”

The second major part of the solution, according to Lam is pay transparency.  The Obama administration, in its last year proposed a regulation requiring “companies with 100 employees or more to report to the federal government how much they pay their employees broken down by race, gender, and ethnicity.”  Unfortunately, this action was revoked by President Trump, in one of his first executive orders this year. Trump’s executive order also revokes other worker protections contained in Obama’s regulation.

Large Decreases in Less Educated Workers’ Real Income 

Men and women with four years of high school education or less have seen large decreases in median real income since 1970.  The decrease is particularly severe for men with high school educations.

  • Men with less than four years of high school saw median income losses between 1970 and 2015 of between 35% and 53%.
  • Men under 50 years old lost between 26% and 42% of real income.
  • Women under 50 years old lost between 23% and 33% of real income.
  • In the New York metropolitan area, women with four years of high school lost between 22% and 40% of income.

At the same time, men with four years of college did not see losses as large  as those with lower educational attainment, and gained real income in some cases:

  • In metropolitan areas in upstate New York, median income declines for men under 35 with four years of college were less than half of the losses of people with less than four years of high school (25% vs 53%).
  • Older men in upstate metros saw small income losses – 5% to 8%.
  • Male residents of the New York metropolitan area saw gains in most cases, ranging from 15% to 24% for workers 35 years old or older.
  • Women with four or more years of college saw significant income gains, ranging from 11% to 66%, but started from much lower income levels in 1970 than did men.

The large real income losses of workers with low levels of educational attainment contrast with the better performance of median incomes for workers with more education.  This is one cause of the greater income inequality that has developed in the United States since 1970.

In earlier posts, I have described the loss of manufacturing employment in the rust belt, and its consequences for worker earnings.  The loss of millions of manufacturing jobs in the rust belt has resulted in the substitution of jobs in service industries that are on the average lower paying.  Unlike the manufacturing jobs that were lost, most service employment is not unionized, so workers have less negotiating power than more unionized manufacturing employees.

The causes of manufacturing employment losses have been debated in the political arena, but most researchers have concluded, as I did here, that the great majority were victims of automation and process improvements, not imports. But both increased automation in manufacturing production and importation of manufactured products resulted from the desire of owners and managers of manufacturing businesses to cut costs to gain or retain market share in competitive marketplaces.  Since labor has been a major element of manufactured product costs, the substitution of automation and lower cost foreign labor has been an attractive strategy to reduce costs.

To date, service employment has continued to grow in the United States, in the rust belt, and in New York State.  But, if anything, labor costs are a larger share of service industry costs than in manufacturing industries.  As a result, high labor costs per service unit make local labor employment vulnerable to substitution by lower cost labor elsewhere or by automation.  In many cases, services businesses have been unable to find substitutes for local labor that work well enough to prevent service employment growth, but in the future, technology may make more substitution possible.

Government could play a positive role, by taking regulatory actions that help low income workers, such as increasing the minimum wage and facilitating union representation of employees.  Though actions that increase labor costs might encourage substitution of automation or foreign labor for local labor, most studies show that the benefits of government assistance are likely to outweigh potential employment losses, as long as the actions do not dramatically increase unit costs.

Declines in Real Incomes of Young Workers

One of the more significant findings of this research was the disparate impact of real income decreases on workers under 35 years old.  This problem was particularly pronounced for male workers, particularly those with high school educations or less.  Overall, men between 25 and 34 had 21% lower real wage incomes in 2015 than they did in 1970.  Young male workers in at all educational levels, except for those with four or more years of college, had median real incomes that were more than 40% lower overall than in 1970.  The income losses extended to young women in the New York Metropolitan area, who also saw large real income losses compared with 1970.

A recent working paper by Fatih Guvenen, Greg Kaplan, Jae Song, and Justin Weidner of the Federal Reserve Bank of Minneapolis , “Lifetime Incomes in the United States over Six Decades,” presents two important findings:  First, “From the cohort that entered the labor market in 1967 to the cohort that entered in 1983, median lifetime income of men declined by 10% to 19%.  We find little to no rise in the lower three quarters of the percentiles of the male lifetime income distribution during the period…For women, lifetime income increased by 22%-33%, from the 1957 to 1983 cohort, but these gains were relative to very low lifetime incomes for the earliest cohort…Second, we find that inequality in lifetime incomes has increased substantially in each gender group.  However, the closing lifetime gender gap has kept overall lifetime inequality virtually flat.  The increase in inequality within gender groups is largely attributed to an increase in increase in inequality at young ages.”

The finding in my research that the 25-34 year old age group in 2015 had much lower incomes than older workers leads to the conclusion that the trend towards increased lifetime income inequality noted in young age cohorts ending in 1983 by Guyvenen, Kaplan, et. al. is likely to continue.  Options available to government to counter this negative trend could involve the Fed continuing to provide low federal fund rates, reducing the cost of borrowed capital, or stimulative federal fiscal policies that focus on things like infrastructure projects that could employ large numbers of construction workers, or increased income supports for low-income workers.  However, stimulative monetary or fiscal policy could, if used to excess, lead to inflation that would in itself erode workers’ purchasing power.

Robert Samuelson argues in “Trumps Low Growth Trap,” “We have entered a new era of low economic growth and high political disappointment. Our democratic system requires strong-enough economic growth to raise living standards and support activist government. These expectations, present in most advanced democracies, are no longer realistic, because the global economy has changed in ways that reduce growth….

Quoting an article by Ruchir Sharma that appeared in Foreign Affairs, he points out, ““The causes of the current slowdown can be summed up as the Three Ds: depopulation, deleveraging and deglobalization. Between the end of World War II and the financial crisis of 2008, the global economy was supercharged by explosive population growth, a debt boom that fueled investment and boosted productivity, and an astonishing increase in cross-border flows of goods, money and people. Today, all three trends have begun to sharply decelerate: families are having fewer children . . . , banks are not expanding their lending [as before] . . . , and countries are engaging in less cross-border trade.”

President Trump’s argument that by implementing tax cuts and regulatory relief, economic growth would increase from the current rate of slightly over two percent to four percent is simply unrealistic, given the headwinds that it faces.  And, anti-trade and immigration policies could actually slow economic growth.

Greater income inequality threatens the existence of a large and secure middle class, and creates greater economic and social distress for those whose incomes are below the median.  If the bottom half of the income distribution includes more people whose incomes are towards the extreme low-end of the income distribution, government will be faced with the choice of paying larger fiscal costs to support those whose wages are inadequate to provide a reasonably secure life, or of ignoring the needs of those who lack resources.   Recent political history also shows that people who sense that their well-being is declining are vulnerable to political appeals based on resentment to “undeserving” beneficiaries of government assistance, and towards other factors, such as international trade or immigration, that may be portrayed as the primary causes of income declines, despite the fact that they are not.

Reasonable policy options to counter the wage declines faced by less educated workers involve trade-offs like potentially increased inflation and greater substitution of automation and foreign labor for domestic workers.  Approaches that address claimed causes like immigration and trade that have played at most a small role in the decreases in income will be ineffective and have potentially large negative consequences.  As a result, they will increase cynicism beyond already high levels.  Leaders should not argue that “magic bullet” solutions exist.  Instead, they should promote reasonable expectations and acknowledge both benefits and costs.




The Persistent Gap Between White and Black Incomes in New York

There has long been a substantial gap between the incomes of white Americans and those who describe themselves as African/American or black.  As early as 1964, with the enactment of the Civil Rights Act, the Federal and state Governments began passing laws aimed at preventing discrimination in the workplace.  Has New York seen significant progress in reducing wage inequality between blacks and whites since 1970?  This post examines the changes in wage incomes of black and white New Yorkers between 1970 and 2015, and considers the impact of education levels on incomes.  This analysis does not consider the experience of other non-white groups, because small sample sizes would not yield reliable results.

The Census Bureau defines personal wage income as total pre-tax wage and salary income – that is, money received as an employee – for the previous year. Annual wage income includes the amount of wage income received by all people having wage income in a year, including those who worked full or part time, and those who worked only part of a year as well as those who worked all year.

Data, as in my last post, which examined the relationship between age, education and inflation adjusted wage income is based on Public Use Microdata Samples made available by the U. S. Census Bureau (Steven Ruggles, Katie Genadek, Ronald Goeken, Josiah Grover, and Matthew Sobek. Integrated Public Use Microdata Series: Version 6.0 [dataset]. Minneapolis: University of Minnesota, 2015. http://doi.org/10.18128/D010.V6.0.) Public Use Microdata Sample files (PUMS) are a sample of the actual responses to the American Community Survey and the Decennial Census and include most population and housing characteristics.  Because the data is from samples of households in metropolitan areas, sampling error is possible, particularly for smaller metropolitan areas.

This post compares inflation adjusted wage income differences between African-American and white New Yorkers in Upstate metropolitan areas and in the New York City Metropolitan area.  Since upstate New York has not historically been racially diverse, relatively few black/African-American wage earners are in the Census sample.  For that reason, data from the Upstate Metropolitan areas (Binghamton, Buffalo, Rochester, Syracuse, and Albany-Schenectady-Troy) examined in my earlier post on real wage income changes has been combined.  Even so, only 657 respondents identified themselves as black or African American in 1970 – 4.7% of the population of those metropolitan areas.  By 2015, the percentage of respondents identifying themselves as black or African-American in Upstate Metropolitan areas had increased to 8.6%.

The population of the New York City Metropolitan area has been consistently more diverse than that upstate. As a result, black/African-American residents comprised 21.5% of the sample in 2015, compared with 14.3% in 1970.

Differences in Real Wage Income – No Substantial Progress

The table above shows two significant things.  First, inflation adjusted wage income increased  between 1970 and 2015 for both white and African-American residents of the New York City Metropolitan area, but declined for blacks/African Americans in Upstate metropolitan areas.   White residents of upstate metropolitan areas saw stable incomes over the period.

Second, the percentage difference in incomes between whites and African-Americans/blacks decreased from 47% to 35% in the New York City Metropolitan area, but increased from 40% to 50% in Upstate metropolitan areas.

The data shows that overall, adjusted wage incomes did not substantially converge over the 45 year period. In Upstate metropolitan areas, the gap increased from 40% to 50%, while in New York City, white residents had more than one third more wage income than blacks/African-Americans in 2015.

Educational Disparities Remain

In my earlier post, the data showed that wage earners with more education fared better than those with less.  People with high school educations or less saw significant real declines in wage incomes over the 45 year period, in many cases.  But, because the educational backgrounds of New York residents have substantially improved, fewer people today have high school educations, or less, than in 1970.  This has offset some of the income decrease that would have otherwise occurred.

This data offers several important findings.  First, in 1970, in most cases people with less than four years of high school education were the largest single group – both in the New York City metropolitan area and Upstate.  The only exception was that the percentage of people with four years of high school was slightly larger than those with less than four years for white wage earners in Upstate metropolitan areas.  For black/African-American residents, more than half of New York City Metropolitan area wage earners had less than four years of high school, while upstate, nearly two-thirds had less than four years.

Second, in 1970, those with four or more years of college comprised less than 20% of the total.  For black/African-Americans, only 6% in the New York City metropolitan area, and 4% upstate had four or more years of college.

By 2015, the situation had changed dramatically.  Seventy percent of white wage earners in the New York Metropolitan area had some post-secondary education. More than half had four or more years of college.  In Upstate metropolitan areas, 67% had some post-secondary education, while 40% had four or more years of college.  For black/African-American wage earners in the New York City Metropolitan area, 58% had some post-secondary educational experience, while 31% had four or more years of college.   In Upstate metropolitan areas, 51% had had some post-secondary experience, while 19% had four or more years.

Third, by 2015, the percentage of New York City Metropolitan area wage earners with four or more years of college exceeded the percentage of Upstate metropolitan area wage earners with four or more years of college by more than 10%.  This may reflect the concentration of headquarters jobs in the New York City area, and the area’s greater ability to pull higher skilled workers into it compared with Upstate metropolitan areas.

While black/African-American wage earners have much higher levels of education than in 1970, the percentage increase in black/African American wage earners who have four or more years of college has lagged that of white wage earners. In 1970 about 12% more white wage earners had four or more years of college than black/African-American wage earners.  By 2015, the gap was 20%.  The increasing gap in highly educated wage earners between white and black/African-American wage earners contributes to the continuing disparities in wage incomes.  But, it is not the only reason why the gap persists.

Income Differences for Wage Earners with Similar Educations

While the differing educational levels of the populations of black/African American and white wage earners provide a partial explanation of the difference in wage income between the groups, they do not totally explain it.  In fact, black/African wage earners continue to have median wage incomes that are less than white wage earners with the same levels of educational attainment.

In 1970, at each educational level, differences in median wage income between Black/African-American and White wage earners were 20% or more.  In that year, wage differences between races did not appear to be related to educational level.  In 2015, results were more varied, with black/African-American workers with less than four years of high school in the New York City Metropolitan area having median wage incomes that were about 10% less than white wage earners.  But, at other wage levels, disparities were larger.  White wage earners with four or more years of college in the New York Metropolitan area earned more than one-third more than black/African-American workers.

In Upstate metropolitan areas, median wage disparities between black/African-American wage earners and white workers were larger in most cases than in the New York Metropolitan area.  For example, the median wage income for white wage earners with four years of high school was 56% higher than similar black/African-Americans.  The larger gap between white and black/African-American incomes in upstate areas leads to speculation that weak employment growth and the lack of racial diversity upstate may be related to larger racial income differentials.

Changes in disparities between white and African-American/black wage earner median incomes between 1970 and 2015 were inconsistent, though it is notable that black/African-American wage earners with four or more years of college fell further behind white wage earners in 2015 than they were in 1970.

Note that in the table above, overall, both whites and blacks did better than they did at specific educational levels.  This was the result on the large improvements in educational attainment that occurred between 1970 and 2015.  Much larger percentages of workers in 2015 had some college or four or more years of it than they did in 1970.

Comparing educational levels, white and black/African-American workers with less education fared worse than those with more education.  In New York City, white and black/African-American workers with four or more years of college saw gains in median inflation adjusted wage earnings.  Overall, black/African-American workers saw slightly larger median income gains than white wage earners.

Upstate, workers at all levels saw decreases, but wage earners at higher educational levels saw smaller median income losses.   Overall, however, black/African-American workers lost more wage income between 1970 and 2015 than did white wage earners.

Conclusions

The data shows that increasing educational levels in both white and African-American communities have offset much of the wage erosion that has occurred among those who have high school educations or less.  But, whites continue to to have higher levels of educational attainment than blacks/Afro-Americans, and that the gap has increased for those with four or more years of college education.

Differences in average educational attainment provide a partial explanation of the continued gap between median wage earnings of white and black/African-American workers. But, the fact that differences in median incomes between white and black/African Americans exist at similar educational levels points to the reality that policies promoting higher levels of education will not erase the median income deficit that this group faces.  While programs that “raise all boats” are more politically salable than those that address the needs of particularly disadvantaged groups, they cannot erase the income gap faced by African-American wage earners.

Because the wage gap between white and black wage earners persists, even among those at the same educational level, it is clear that the enactment of laws, like the Civil Rights Act of 1964, that have been aimed at erasing employment discrimination, are not in themselves enough to eliminate it.   The data from this analysis cannot provide the answer to the question of why this is true.  It does not show whether local, state and federal agencies need to do a better job of enforcing the laws, or whether the causes of the gap lie outside their purview. For example, it may be that white and black/African-American job candidates are often seen differently because many black candidates are products of central city school systems with high levels of poverty and low levels of academic achievement.

The racial gap in incomes remains a significant component of the inequalities that exist within our society.  If the wage gap between white and African-American workers is to be ameliorated, local, State and Federal governments must confront the realities that a better understanding of the causes of the gap is needed and that compensatory policies must have an implicit or explicit component that addresses racial differences in wage incomes.




Education, Age and Declines in Real Income Since 1970

The economic malaise that has affected small and medium sized rust belt cities since 2000 has been widely noted.  Most have seen little or no real household income growth since then.  Much of the weak performance has been associated with the long-term decline of manufacturing employment in the region – a trend that is largely the result of increased productivity; imports have played a smaller role.  But, even before 2000, incomes in rust belt metropolitan areas were weakening and employment growth had been slower than in other places.

This post looks closely at the relationship between age, education and inflation adjusted personal wage income over the period from 1970 to 2015 to get a better understanding of the economic changes that have taken place during that period.  The data shows that while income stagnation has been widespread, some age groups and educational levels have seen sharp declines in real income per capita since 1970 – nearly 50% in some cases.  Younger workers and those without college educations have been hardest hit.

The data for this post is from Public Use Microdata Samples made available by the U. S. Census Bureau.[1] Public Use Microdata Sample files (PUMS) are a sample of the actual responses to the American Community Survey and the Decennial Census and include most population and housing characteristics.  Because the data is from samples of households in metropolitan areas, sampling error is possible, particularly for smaller metropolitan areas.  

For this post, six metropolitan areas were examined – Albany-Schenectady-Troy, Binghamton, Buffalo, New York City, Rochester and Syracuse.  These metropolitan areas have shown differing levels of performance in past analyses.  The New York City and Albany, Schenectady, Troy metropolitan areas have been among the best performing areas in the region for earnings and employment growth since 2000.  These areas have historically had relatively low levels of manufacturing employment.  The remaining upstate areas have shown
relatively little employment or earnings growth.  Binghamton has been particularly hard hit.

While all the metropolitan areas are in New York State, their recent economic performance differs relatively little from others in the region. Some, like the New York metropolitan area and the Albany-Schenectady-Troy metropolitan area had relatively high median household incomes compared to other areas in the region.  Others, like most upstate metropolitan areas, had median incomes that were typical of the rust belt.  Consequently, it is likely that other rust belt metropolitan areas performed similarly.

 

Inflation Adjusted Median Wage Income – 1970-2015

The Census Bureau defines personal wage income as total pre-tax wage and salary income – that is, money received as an employee – for the previous year. Annual wage income includes the amount of wage income received by all people having wage income in a year, including those who worked full or part time, and those who worked only part of a year as well as those who worked all year.

Inflation adjusted median wage incomes[2] for most groups declined between 1970 and 2015 – in some cases, substantially.   Younger people and people with lower levels of educational attainment saw bigger losses than older and highly educated people.

On average in the six metropolitan areas, the real median wage income for people with a high school education or less declined by 38.3% between 1970 and 2015.  In that age group, even college educated people saw significant declines – about 21%.  The only group that did not see a decrease between 1970 and 2015 was workers between 50 and 64 who had a college degree or more.  In general, however, having a college education reduced by more than half, the size of median income losses.

Age was also strongly related to the decline in median wage income.  Median incomes for workers aged 25-29 were at least 21% lower in 2015 than they were in 1970.  Older age groups were less affected than younger people, with those in the 50-64 age group seeing relatively small median income losses.

A comparison of the inflation adjusted median wage incomes of people with high school educations or less shows that younger people had much lower median incomes in 2015 than they did in 1970 in each metropolitan area studied.  In Buffalo-Niagara Falls, the median for the 25-29 age group decreased from $35,000 $18,600 (47%).    The median for 25-29 year olds decreased from $36,000 to $20,000 (44%) in the New York City Metropolitan area.  In 2015, inflation adjusted median wage incomes for all age groups, with the exception of those aged 50-64, were 5% to 40% lower in each city than they were in 197o.  While the New York City and Albany-Schenectady-Troy metropolitan areas had greater employment growth and higher household incomes than most of their peers the declines in real wage income for people with four years or less of high school were not smaller than those in slower growing and less affluent places.

For college educated people, the picture was better, though younger age groups saw real income decreases.  With the exception of the Binghamton metropolitan area, people aged 25-29 with four years or more of college had median real wage incomes that decreased by 30% or less, with the exception of Binghamton.  New York City metropolitan area inflation adjusted incomes were higher in 2015 than in 1970, with the exception of those aged 25-29. In other metropolitan areas, median personal incomes for most age groups were lower in 2015 than they were in 1970.The relatively strong performance of the New York metropolitan area may point to the relative strength of the labor market for people with four years of college or more there.

In contrast, the median income of people aged 25-29 with four years of college in Binghamton was $37,000 in 2015, compared with $60,000 in 1970, while in Rochester, the comparable decrease was from $50,000 to $35,000.  Both areas saw employment at important businesses, like Kodak,Xerox and IBM, collapse or substantially decline between 1970 and 2015.

Change in Inflation Adjusted Median Wage Income by Time Period

The data shows that the period from 1970 to 1980 was the worst in the past 45 years for wage incomes.  Non-college educated people aged 25-29 saw declines of more than 40% in that decade in the median real wage income in the metropolitan areas studied. Those with four or more years of college aged 25-29 had declines of more than 20%.  Only workers with four or more years of college aged 50-64 did not see declines in real income during the period.  The 1970’s were notable for large increases in energy prices, beginning with the Arab oil embargo, beginning in 1973.  The resulting inflation overwhelmed nominal increases in wages for almost all workers.

Between 1980 and 2000, most age and education groups saw some recovery from the 1970-1980 period. People with four or more years of college in all age groups saw the biggest largest increase in median real wage income.  By 2000, medians largely recovered from the losses seen in the 1970’s.  While median incomes for people with four years of education recovered slightly in most cases during the 1980 to 2000 period, the increases for people with high school educations or less fell far short of erasing the losses of the 1970’s.  And, for the 29-29 year age group with high school or less education, median real incomes continued to decrease.

Between 2000 and 2015, median incomes again generally weakened.  Once again, declines for people with high school educations or less were significantly greater than for other groups — more than 10% in most cases during the 15 year period. Median inflation incomes for people with four years or more of college generally
increased by five percent or less.

the 2008 recession, the labor market has tightened – unemployment is relatively low, though labor participation rates remain somewhat depressed compared to the past decades (Source – U. S. Bureau of Labor Statistics – Current Population Survey). Consequently, median wage incomes increased between 2010 and 2015.  While the increases of the current decade trimmed the losses of 2000 to 2010, gains have been relatively small.

Implications

The declines in median wage income in the past forty five years point to a number of problems in the labor market in rust belt areas.  Much of the decline can be attributable to events that took place in the 1970’s related to increases in energy prices and economy-wide inflation.  But, the decades following the 1970’s have seen uneven economic performance.  The 1980’s and 1990’s saw some median wage income growth, but wage earners with high school educations or less did less well than those with four years of college or more.  The 2000’s and 2010’s saw small gains for those with college educations, and significant losses for those with high school educations, or less.

Government actions to increase aggregate labor demand would certainly benefit workers with all levels of education.  Similarly, governmental actions to enhance the bargaining power of less educated workers in low skill jobs, such as higher minimum wage requirements, and easier union certification, would help.

At the same time, the persistent gap in median incomes and income changes between workers with college educations and those with four years of high school or less demonstrates the continuing importance of good educational preparation. Despite the fact that the supply of college educated workers has increased substantially since 1970, the wage premium that they enjoy has increased, especially for worker in younger age groups.   In 1970 and 1980, median wage incomes of workers under 30 with four or more years of college were less than 40% more than those with a high school education or less.  In 2015, the difference was 76%.   For most other age groups, median wage incomes for people with four years of college or more were more than double those of people with high school degrees or less.

Given the durability of the income benefits of higher education, government policies aimed at increasing access to post-secondary education would be beneficial. For example, programs assisting groups that face barriers to higher education, such as  economically disadvantaged children, could improve opportunities.   Similarly, adults who do not have post-secondary training should be assisted in gaining access to college level studies.

[1] Steven Ruggles, Katie Genadek, Ronald Goeken, Josiah Grover, and Matthew Sobek. Integrated Public Use Microdata Series: Version 6.0 [dataset]. Minneapolis: University of Minnesota, 2015. http://doi.org/10.18128/D010.V6.0.

[2] Median per capita income was computed for all cases showing income of more than $0.  Income was adjusted for inflation by the Consumer Price Index for all Urban Workers and Clerical Workers.  See:  https://fred.stlouisfed.org/series/CWUR0000SA0.  All values rounded to $1,000.




Poverty in Upstate Metropolitan Areas – Characteristics and Change: 1999-2013

A paper, based, in part, on data previously presented on this blog site.

This paper examines the incidence of poverty in upstate New York cities, compared to the surrounding suburbs.  The data shows that while residents of upstate suburbs enjoy incomes that are substantially higher than the national average, and poverty rates that are substantially lower, upstate cities have higher levels of poverty and lower incomes than the nation, and it shows that the level of poverty in upstate cities is growing more quickly. Compared with other rust belt cities, the economic separation of central cities and suburbs is greater in upstate New York.

  • The data shows that poverty levels are particularly high for families with children under 18 – more than 50% in some cases.
  • The ratio of families with children living in poverty in upstate cities to those living in poverty in suburbs is greater than the average of rust belt cities outside New York State – as much as twice as great in some cases.
  • The residents of upstate cities are becoming increasingly economically segregated from those outside them. While nearly half of families with children in upstate cities are poor, only 5% to 15% of those in suburbs live in poverty.
  • Residents living in poverty in upstate central cities are less educated and less likely to work than people not in poverty outside those cities.
  • Households in poverty are far more likely to be headed by a single householder – usually a woman.
  • Minority group members are greatly over-represented among those living in poverty.

Read more here:




The Shrinking Middle Class in New York State – Cities and Suburbs

Pew Research has been releasing a series of studies showing that the percentage of Americans who have middle class incomes has been declining.  The most recent of these is  America’s Shrinking Middle Class:  A Close Look at Changes Within Metropolitan Areas.  The report received extensive coverage in many newspapers, including the New York Times.  It concluded that in nine of ten metropolitan areas, the middle class lost ground – from 61% of the population in 1971 to 49.5% in 2014.

The Pew findings are a result of the widely reported increase in income inequality that has developed in the United States since about 1980.

household-incomes-mean-real

Source:  Doug Short – U. S. Household Incomes: A 47 Year Perspective.

The data shows that income gains were concentrated among those with higher incomes. In fact, middle to low income households have seen no significant real (inflation adjusted) income gains since 1967. And, since 2000, real household incomes have stagnated at all levels.  Because income gains between different income groups have diverged, the percentage of Americans who live in the middle class has declined.

The Shrinking Middle Class in New York State’s Metropolitan Areas

Pew found that in New York Sate, each metropolitan area studied saw a decline in the percentage of residents whose incomes were classified as middle class.  For the purpose of their study, middle class was defined as the range between two thirds of the median household income and twice the median.  Albany-Schenectady-Troy showed the largest decrease- 5%.  On average, the percentage or residents with middle class incomes decreased by 3.9%.

Five of the seven metropolitan areas saw increases in the percentage of residents with high incomes – Albany-Schenectady-Troy, Glens Falls, New York-Newark-Jersey City, Syracuse and Utica. Four of seven metropolitan areas saw increases in the percentage of low income residents, with Buffalo-Niagara Falls showing the largest increase – 8.3%.

Change In Income Distribution
New York State Metros 2000-2014
Low Middle High
Albany-Schenectady-Troy  (1.90)  (5.00)  7.00
Buffalo-Niagara Falls  8.30  (7.40)  (0.90)
Glens Falls  0.10  (3.30)  3.00
New York-Newark-Jersey City  (0.10)  (2.60)  2.70
Rochester  3.00  (2.90)  (0.20)
Syracuse  (1.20)  (2.10)  3.30
Utica  0.50  (3.80)  3.30

Source:  Pew Research Center – America’s Shrinking Middle Class:  A Close Look at Changes within Metropolitan Areas.  

The 3.9% average decrease in middle class residents in upstate metropolitan areas was very close to the 4% decrease that Pew found nationally.  But the Pew data does not examine the way the increase in income inequality affects city residents compared to residents of suburban areas around them.  This is a significant issue because cities in New York state have become increasingly separated economically from their suburbs.

For example, in upstate New York in 1969, cities had rates of poverty that were only slightly higher than for the state as a whole.  But, by 2013, most upstate cities had rates of poverty that were at least two times the state rate.

Percent of Residents Living in Poverty
1969 1989 1999 2013
Albany 14.20% N/A 21.50% 25.30%
Buffalo 15.20% 25.60% 26.60% 31.40%
Rochester 12.40% 23.50% 25.90% 33.90%
Syracuse 14.10% 22.70% 27.30% 36.50%
Schenectady N/A N/A 20.80% 24.80%
Troy N/A N/A 19.10% 27.30%
Utica N/A N/A 24.50% 31.70%
New York State 11.10% 13.00% 14.60% 15.60%

(Data for cities with populations of less than 100,000 were not available for years before 1999).

Inflation Adjusted Median Household Income Change in Cities and Suburbs

The same dynamic played out with respect to household incomes in cities and their suburbs.  Between 1999 and 2014, the median inflation adjusted household income for residents of 14 New York cities declined, while those of households outside those cities in the counties within which they were located increased in all but two cases. Moreover, those cities with poorer populations saw greater income losses on average, while those suburbs with higher incomes saw larger income gains.

median income

(Income adjusted by CPI-U for 1999 and 2014 – Northeast Urban Class B&C Metropolitan Areas).

Several cities saw particularly large adjusted median income declines between 1999 and 2014.  Adjusted household income declined by 23% in Elmira and Newburgh, and 20% in Rochester.  Overall, households in poorer cities lost 15% of inflation adjusted income, while those in wealthier cities lost 9.2% of income between 1999 and 2014.

In contrast, suburban areas saw gains, on average, with suburban areas around wealthier cities seeing increases of 6.3% on average, while those around poorer cities saw increases of 4.5% on average.  Household income in suburbs outside Elmira increased by 13%, compared to the 23% decline in the city.  In suburbs around Syracuse, adjusted household income increased by 10%, while in the city, it decreased by 9%.

Chautauqua County outside Jamestown, Duchess County, outside Poughkeepsie, Monroe County, outside Rochester, and Ulster County outside Kingston saw declines in inflation adjusted median household income.  But, even here, central cities far worse than suburbs.  In Rochester, adjusted median household income declined by 20%, while Rochester suburbs decreased by 3.8%.  In Poughkeepsie, real median household income declined by 11.4%, while in the rest of Dutchess County, median income declined by 3.5%. Jamestown saw a 15% decline, while the remainder of Chautauqua County saw a decrease of 2.3%.

Inflation Adjusted Income Change in New York City

nyc household

Three boroughs in New York City saw declines in inflation adjusted household income between 1999 and 2014 – Bronx with a decline of 15%, Queens with a decrease of 7.7%  and Staten Island with a decrease of 7.9%. Manhattan saw an increase, while Brooklyn’s income was stable.

Middle Income Shrinkage in Cities and Suburbs

 

middle income

Both cities and suburbs had smaller percentages of middle income residents in 2014 than in 1999, but started from different positions.  In cities in 1999, on average only 43% of residents were middle class, compared with 55% in suburban areas.  In 2014, 38% of city residents on average were middle class compared with 50% in suburbs.  So, both cities and suburbs lost the same percentage of middle income residents.

Implications

The decline of middle income households is a significant concern, but, even more significant are the overall growth of inequality, and the overall decline in real household income that has taken place this century.

For the United States as a whole, by 2014, inflation adjusted median household income had decreased by 8% from 1999.  While more recent data suggests that incomes have recovered since 2014, the lack of growth in median household incomes is a significant concern.

adjusted income

Source:  Federal Reserve Bank of St. Louis

But the impact of income stagnation has been unequal.  The chart and table below show that the impact of recent income declines has been greatest on lower income groups.

household-incomes-growth-real-annotated

household-income-real-decline-from-peak-table

Source:  Doug Short – U. S. Household Incomes: A 47 Year Perspective

Because of the concentration of low income residents in cities, city households saw significant declines in inflation adjusted income over the past fifteen years – averaging a decrease of 12%, compared with an increase of 6% in suburban areas.  As a result, the average difference in household incomes between cities and suburbs increased from 46% in 1999 to 74% in 2014.

Our society has become increasingly divided economically over the past 35 years.  More recently, the U. S. economy has not provided income growth for the country’s residents.  In New York State, the impact of these changes has been significantly different for suburban residents, who have been largely insulated from these economic problems, and for city residents who have suffered from them.

 

 




Racial Divisions in Upstate Metropolitan Neighborhoods

In my last posting I described income differences in 800 upstate metropolitan neighborhoods in Albany, Erie, Monroe, Oneida, Onondaga, Rensselaer and Schenectady Counties.  The data comes from the United States Census Bureau which divides the nation into census tracts, the most detailed level publically tabulated. Overall, there are 73,000 census tracts nationally, averaging 4,200 residents each.

While there are significant differences in incomes, unemployment and poverty among upstate neighborhoods, the differences in racial patterns, particularly between people identifying as black or African-American and those identifying as white are much stronger, and the racial differences are strongly related to neighborhood economic conditions.

Racial Divisions – Two Neighborhood Types

Census Tracts with High Concentrations of Black Residents

Upstate Metropolitan Census Tracts – 2014
Sorted by Percentage of Black/African-American Residents
High Concentration Average Concentration Low Concentration
  30% of of all Black Residents 40% of all Black Residents 30% of all Black Residents
%Black 83.4% 38.6% 4.4%
%Hispanic 5.0% 16.7% 3.8%
%White 8.6% 36.2% 86.4%
Black Residents 105203 143812 109430
All Residents 126153 373030 2471015
Low Income 64.0% 58.6% 29.5%
Medium Income 31.4% 34.8% 47.7%
High Income 4.6% 6.6% 22.8%
Mean Household Income $37,238 $44,171 $76,175
% Unemployment 19.8% 14.1% 6.7%
% Poverty 34.0% 32.4% 6.8%

More than eight of every ten residents of neighborhoods with high concentrations of black residents identify as black or African-American, even though only 12% of all residents of upstate metropolitan census tracts were black.  Residents in typical neighborhoods with high concentrations of black residents had very few residents identified as white, not Hispanic – only eight in one hundred.  About five percent of residents with high concentrations of black residents identify as Hispanic, about the same percentage as upstate urban neighborhoods, overall.

When average concentration neighborhoods are added to the picture, 70% of residents live in neighborhoods that average 50% black or African-American.  These neighborhoods have concentrations of black residents that are more than four times the average for all upstate neighborhoods.  When combined with those who identify as Hispanics, people who live in neighborhoods that have average concentrations of black/African-American residents are more than 60% minority residents.

Note that the income, unemployment and poverty levels of neighborhoods that had average levels of black residents were only slightly better than those of neighborhoods with high levels.  For neighborhoods with high and average concentrations of black residents, mean household incomes in 2014 were only slightly higher ($40,176) than those for residents of neighborhoods with high concentrations of black residents ($37,238).

blacklo

In neighborhoods with high concentrations of black residents, 64% of households had low incomes – almost as high a percentage as was found in neighborhoods with high concentrations of low income residents.  About three in ten residents of these neighborhoods had middle incomes, while about 5% had high incomes.

Typical residents of neighborhoods with high concentrations of black residents, had incomes of  $37,200 in 2014, only slightly higher than the average income in neighborhoods with high concentrations of low income residents.  Similarly, the concentration of poverty in neighborhoods with high concentrations of black residents averaged 37%, like that of low income neighborhoods, which averaged 37%.

Unemployment among residents of neighborhoods with high concentrations of black residents was nearly 20% in 2014, the highest of any of the groups in this analysis.

Census Tracts with High Percentages of Hispanic Residents

Upstate Metropolitan Census Tracts – 2014
Sorted by Percentage of Hispanic Residents
  High Concentration Average Concentration Low Concentration
  30% of all Hispanic Residents 40% of all Hispanic Residents 30% of all Hispanic Residents
%Hispanic 29.8% 9.2% 2.4%
%Black 35.8% 20.8% 7.3%
%White 27.5% 62.3% 85.5%
Hispanic Residents  48,205  65,181  50,189
All Residents  161,994  704,899  2,103,305
Low Income 65.5% 46.4% 28.4%
Medium Income 30.2% 41.8% 47.7%
High Income 4.3% 11.8% 23.9%
Mean Household Income $39,943 $52,818 $78,526
% Unemployment 18.0% 10.1% 6.6%
% Poverty 38.4% 19.7% 6.2%

Only 5.5% of residents of upstate metropolitan census tracts are of Hispanic descent.  So, even in those places where there are relatively high Hispanic concentrations, they make up only a minority of residents.  In the neighborhoods with the highest concentrations of Hispanic residents, on average 30% of residents were Hispanic, compared with 36% Black/African-American and 27.5% White (not Hispanic).

hisplo

Like people who identify as Black/African American, Hispanic households most often have low incomes (66%).  About 30% of Hispanic households in upstate urban areas are middle income, while 4% are high income households.  When neighborhoods including high and average concentrations of Hispanics are combined – 70% of all Hispanics, their average income reached $49,642, lower than the average income of those who identify is white, not Hispanic, but higher than that of people who identify as black or African American (40,176).

Neighborhoods with high concentrations of Hispanics had high levels of unemployment (18%).  The concentration of poverty in neighborhoods with high concentrations of Hispanic residents (38.4%) was slightly higher than that of low income neighborhoods and those with high concentrations of black/African-American residents.

Census Tracts with High Concentrations of White Residents

Upstate Metropolitan Census Tracts – 2014
Sorted by Percentage of White Residents
High Concentration Medium Concentration Low Concentration
  30% of all White Residents 40% of all White Residents 30% of all White Residents
%White 96.2% 89.8% 55.8%
%Black 0.7% 2.9% 25.6%
%Hispanic 1.5% 3.1% 9.6%
White Residents  662,506  922,262  707,720
All Residents  688,680  1,014,263  1,267,255
Low Income 24.7% 26.2% 46.7%
Medium Income 49.5% 48.9% 40.3%
High Income 25.8% 24.9% 13.0%
Mean Household Income $80,921 $80,710 $55,793
% Unemployment 6.3% 5.9% 10.6%
% Poverty 4.4% 4.7% 20.5%

Neighborhoods with high concentrations of white residents look very different from those with high concentrations of black or Hispanic residents, and from the average of all residents.  Thirty percent of all white (non-Hispanic) residents live in neighborhoods that average 96% white, with less than one percent of black residents, and 1.5% of Hispanic residents.  Overall, 77% of residents of upstate metropolitan areas are white, 12% are black and 5.5% Hispanic.

Whitelo

They also differ significantly in their economic characteristics.  About 75% of residents of neighborhoods with high concentrations of white residents have middle or high incomes.  For black and Hispanic residents, the corresponding percentage is 35%.  The median household income for neighborhoods with 70% of all white residents of upstate urban neighborhoods is more than $80,000, compared with $40,176 for neighborhoods with 70% of all black residents, and 49,642 for neighborhoods with 70% of Hispanic residents.

The average unemployment percentage in 2014 in neighborhoods with high concentrations of white residents was 6.3%, compared with 20% in black neighborhoods, and 18% in neighborhoods with high concentrations of Hispanic residents.  Very few residents of neighborhoods with high concentrations of white residents lived in poverty in 2014 – 4%.  For black neighborhoods, the percentage was 34% and for neighborhoods with high concentrations of Hispanics, the percentage was 38%.

Concentrations of Residents by Neighborhood Types

Chart 1.

black hispanic white 

Chart one shows that blacks and Hispanics are particularly overrepresented in the upstate metropolitan neighborhoods where they lived in 2014.  65% of blacks lived in neighborhoods with more than twice the overall percentage of blacks in upstate metropolitan counties.  Forty percent of blacks live in neighborhoods with more than four times their overall percentage.  Forty percent of Hispanics live in neighborhoods where they are more than twice their overall percentage in upstate metropolitan counties.

Chart 2

ratio of races

 

Chart two shows the concentration of the group populations in each census tract, sorted by the concentration of group population.  It shows that black and Hispanic populations are far more concentrated than low income, high income and white populations. While most blacks and many hispanics live in neighborhoods with more than twice their overall concentration, almost all low and high income households live in neighborhoods that are less than twice as concentrated as the overall low and high income households in upstate metropolitan counties.

Implications 

In earlier posts, I pointed out disparities in poverty and income between upstate cities and their suburbs, and between white, black and Hispanic residents.  This research extends the analysis to the neighborhood level, and shows that residents with low incomes, black and Hispanic residents are separated by neighborhood from a substantial majority of white residents.  Most white residents live in neighborhoods that have fewer than 5% black and Hispanic residents.  In contrast, 70% of all black residents live in neighborhoods that have more than 60% minority residents, despite the fact that blacks make up 12% of the population of upstate urban neighborhoods.

Equally important, the economic conditions of neighborhoods with high concentrations of black and Hispanic residents closely resemble those of low income neighborhoods.  Black and Hispanic neighborhoods have percentages of low income residents, unemployment levels, and percentages of households in poverty that are very similar to poor upstate urban neighborhoods.  The next post will provide some additional documentation of the economic differences between census tracts with high concentrations of minority group members and those which are primarily white.

The fact that neighborhoods with high concentrations of black/African-American residents are more separated from neighborhoods with high concentrations of white residents than predominantly low income neighborhoods are separated from high income neighborhoods suggests the continuing need to address the racial separation of upstate residents as well as the prevalence of low income neighborhoods if upstate is to remove the barriers that separate its residents.