3 ways of looking at Bay Area inequality
A polar region
Thanks for joining me for this week’s Golden Stats Warrior, a newsletter for data-based insights about the Bay Area. If this is your first time reading, welcome! If you haven’t signed up yet, you can do that here.
This week, I want to talk about inequality.
If you live here, it is impossible to ignore the chasms in wealth that exist in the Bay Area. It’s true of nearly every place in the US, but it feels even more poignant here. This is, quite literally, one of the richest regions in the history of the world. Three of the world’s ten richest people, all worth over $50 billion, live in the region, yet homelessness is rising and large shares of the population can’t afford to send their kids to college.
Inequality is a complicated subject. There are different ways to measure it, and different beliefs about its repercussions. Some researchers don’t think it is necessarily a problem. As inequality has risen in the US over the last three decades, poverty has fallen, and the typical household’s income continues to rise (though slower than it did in the 1950s and 60s). Still, there is good reason to think inequality has corrupted our politics. Through campaign contributions and the revolving door between the private and public sectors, the rich are taking a larger share of the gains created by society. That is true in the Bay Area as well.
All that said, it’s important to get a sense of what the region’s disparities actually look like. Here are three ways of looking at inequality in the Bay.
Income inequality
In 2017, your family needed to make $420,000 to be in the top 5% of households in the San Francisco-Oakland metropolitan area (this is the 95th percentile household). The 20th percentile household made about $38,000. In San Jose, those numbers are $490,000 and $46,000 respectively. That makes these two metropolitan areas among the most unequal in the US. Only New York City and Philadelphia have a higher ratio than the San Francisco-Oakland area (This is based on my analysis of US Census survey data, and using definitions created by the Brookings Institution).
Metro areas with lower rates of income inequality include Washington DC (7.5), Denver (7.6) and Minneapolis (7.8). This is largely because these places don’t have large numbers of extremely high earners.
If it feels like the inequality is getting worse, that’s right. Since 2000, that ratio has risen from less than ten to about eleven today. That means that incomes are growing faster for the well paid than they are for those just getting by.
Disparities in wealth
When considering inequality income is key, but wealth is just as important. In the US, the top 1% in wealth hold nearly 40% of the country’s riches. One study from the US Federal Reserve finds that children of parents in the top 20% in wealth are even more likely to stay there than children of parents in the top 20% of income are to stay in that group (there is a lot of overlap between these groups).
In the Bay Area, wealth is incredibly geographically concentrated. The California government’s Legislative Analyst’s Office recently examined wealth by zip code from 2014 to 2016 (hat tip to Kim-Mai Cutler). They found that 300 of California’s 1,650 zip codes account for two-thirds of the state’s wealth. “The state’s 30 wealthiest zip codes hold 20 percent of the state’s net worth, while making up only 2 percent of state population,” according the report.
The four wealthiest zip codes in the state are found in the Bay Area, which you can see in the chart below, made by the Legislative Analyst Office. Each dot represents a zip code.
The report also finds that while there are 11 zip codes in the Bay Area with average wealth above $1.5 million, in about 15% of zip codes, it is under $50,000. The map below, also from the report, shows these huge disparities. Large sections of Richmond, Oakland, Antioch and San Leandro have much less wealth than the rest of the area.
This has the effect of concentrating educational resources and political power into certain communities. It is probably no coincidence that many of the richest areas on the map above, such as the South Bay and the suburbs east of Oakland, have been adamant in stopping housing from being built that would better integrate these communities.
Inequality means more than money
Inequality isn’t just a matter of being able to go to better schools or have nicer houses, it also means some people get to live longer. In 2018, the CDC released estimates of life expectancy for every census tract in the US—areas of about 2,500 to 8,000 people. For a story on Quartz, my colleague Daniel Wolfe created an interactive map that allows you to explore the life expectancy of your community and how it compares to those around you.
The map below shows what the broader Bay Area looks like. Darker green means longer life expectancy. In the lightest green area, like those in East Oakland, the average person living today has a life expectancy in the low 70s. In Marin, where you see dark green, life expectancy is in the mid 80s. If this map reminds you of the wealth map above, you are on to something.
By zooming in a little further we can see more of the details for Oakland and San Francisco.
There are a variety of possible ways the inequality of the Bay Area might be combatted. More unions, a higher minimum wage, and stronger regulations for gig workers are among the most promising. While I am a supporter of each of those ideas, particularly unions, they all come with downsides. They are likely to make it harder for some people to find jobs, and make it tougher for people to find flexible work.
Two other promising ways to decrease inequality would be building more affordable and market rate housing in wealthy parts of the Bay Area, as well as increasing California’s earned income tax credit. Both could be paid for with tax hikes on Californians earning over $200,000 a year.
Bay Area media recommendation of the week
Every edition I highlight the local journalism I have admired recently. This week, I want to recommend you check out CalMatters, a nonprofit California policy and politics news site. Started in 2015, CalMatters is consistently thorough and informative. For example, this week I was confused when I saw a headline about the passage of a statewide rent control bill. After reading this terrific analysis of the bill by CalMatters journalist Matt Levin, I think I grasp the content and possible consequences of the bill.
(If you read or listened to something great about the Bay Area this week, please send it to me!)
Dan’s favorite things
Each issue I also want to mention one of the activities that I recommend for anyone living in the area.
I love the library! I volunteer at the Oakland Public Library, and am so impressed by the abundance of needed services the library offers. One particularly cool resource is the History Room on the second floor of the Main Library. Just ask the librarian working there about origins of your house or neighborhood, and they will almost certainly provide an illuminating answer. The San Francisco Library also offers a similar service at their main library (I hate to admit it, but it’s probably even better).
Thanks for your time. See you in a couple weeks.
If you think a friend might enjoy this newsletter, please forward it along. You can follow me on Twitter at @dkopf or email me at dan.kopf@gmail.com
The Golden Stats Warrior logo was made by the great Jared Joiner, the best friend a nervous newsletter writer could have. Follow him @jnjoiner. Also, thanks to the brilliant and supportive Natalie Nava for copyediting.