The blog of the Urban Institute
October 2, 2012

Examining income inequality in America's largest metros

October 2, 2012

"What drags down our entire economy is when there is an ultra-wide chasm between the ultra-wealthy and everyone else," President Barack Obama, April 2012.

Intentionally or not, President Obama recently staked a claim in the debate about the relationship between income inequality and economic growth. Although there's no strong consensus among economists on this topic,cross-national research finds that, in general, countries with higher levels of inequality generally tend to have lower rates of growth. But that finding has to be taken with a grain of salt because the understanding that the relationship between inequality and growth tend to vary with a country's stage of economic development. High inequality is associated with lower growth in developing economies but with higher growth in mature economies.

Read our latest MetroTrends commentary to see what the picture look like for the Top 100 metro areas.  


As an organization, the Urban Institute does not take positions on issues. Experts are independent and empowered to share their evidence-based views and recommendations shaped by research.


Hi Gregory, There is some very recent evidence that hi income inequality in developed nations is bad for the economy. See "Inequality and Its Perils" by Jonathan Rauch at the National Journal. The US Gini Index – a measure of inequality – is at an all time high, in the ranks of Rwanda and Uganda. Last week I heard veteran investigative reporter and Pulitzer Prize winner Hedrick Smith, speaking on “Who Stole the American Dream?” He talked about the destruction of the middle-class – how it happened, and what to do about it. It explores the rise of corporate lobbying, and social engineering that moved wealth from the middle-class to the corporate elite. I posted a video of that talk, here: