Income Disparity: US Cities Face Extreme Gap Between Top and Bottom Earners
A recent study conducted by SmartAsset has revealed a significant income disparity between the top and bottom earners in cities across the United States. The findings shed light on the vast differences in earning potential within different income quintiles. While the median household income in the US is approximately $65,000, the study shows that the threshold to be among the top 20% of earners nationally is more than double that figure at $130,545. In contrast, the maximum threshold to be among the bottom 20% of earners is just $26,685, highlighting the income gap within the country.
Digging deeper into the data, SmartAsset examined income distributions in the 100 largest cities in the US. The study focused on determining the income needed to be in the top 20% of earners, or the 80th percentile of earners, in each city. The results showcased a stark contrast in income disparities between cities.
San Francisco, California emerged as the city with the most significant gap between the bottom and top 20% of earners. The disparity exceeds a staggering $213,000, with the top 20% earners in San Francisco making nearly seven times more than the bottom 20%. On the other hand, Cleveland, Ohio has the narrowest gap among the cities analyzed, with a difference of $59,249. However, this still translates to a more than sixfold difference between the bottom and top 20% of earners in Cleveland.
The study also identified the cities with the highest and lowest thresholds to be in the top 20% of earners. Unsurprisingly, five California cities, including San Francisco and Fremont, featured in the top 10, with households needing to earn upwards of $250,000 to meet the 80th percentile threshold. This amount is significantly higher than the median household income in these cities. Conversely, 14 cities, including Detroit, Michigan, require less than $100,000 to be a top 20% earner. In fact, Detroit has the lowest threshold overall, at $70,444, which is more than twice the median household income.
The study’s data stems from the Census Bureau’s 2020 5-year American Community Survey, focusing on the 100 largest cities in the US. Each city was ranked according to the household income required to be in the 80th percentile of the income distribution. The findings underscore the vast disparities in income across different cities, highlighting the challenges faced by lower-income individuals and families in certain metropolitan areas.
It is evident that income inequality remains a pressing issue in the United States, with significant variations in earning potential depending on location. The study serves as a call to action for policymakers and advocates to address the income gap and work towards creating a more equitable society.
