Blog

Tech Hubs Have Better Inequality Performance since 2007 Than Other Large Cities

By / 2.20.2014

The title of the NYT article seems to say it all: “Study Finds Greater Income Inequality in Nation’s Thriving Cities.” The implication is that the tech/info boom is increasing inequality.

But a closer look at the Brookings data underlying the article shows exactly the opposite.  In fact, based on the Brookings data, tech hubs have on average seen a smaller increase in inequality than other large cities since 2007.

Let’s walk through the evidence. The Brookings study used Census data to measure the change in the 95/20 ratio for large cities from 2007 to 2012. Their list of 50 large cities included 9 tech hubs–San Francisco, Boston, NYC, Denver, Austin, Seattle, San Jose, Raleigh, Colorado Springs.

1. Out of those 9 tech hubs, only 2 (22%) had a statistically significant increase in inequality from 2007 to 2012, according to the Brookings report. Out of the remaining 41 cities, 17 (41%) had a statistically significant increase in inequality form 2007 to 2012.

2. The median increase in inequality for the tech hubs was 0.4 percentage points, compared to 0.7 percentage points for the remaining cities.

3. The average increase in inequality for the tech hubs was 0.8 percentage points, compared to 0.9 percentage points for the remaining cities.

4. Two tech hubs (Denver and Seattle) had declining inequality over this period, compared to only one non-techhub (El Paso).

Preliminary conclusion: Tech hubs have seen better inequality performance since 2007, compared to other large cities.

Caveats: This is a real-time preliminary analysis of the Brookings data. I reserve the right to modify it (or correct mistakes!!) in response to comments. Go for it!