Income Divide

 

Why you should cover poverty and the income divide in your county

“The U.S. ranks third among all the advanced economies in the amount of income inequality. The top 1 percent of Americans control nearly a quarter of all the country’s income, the highest share controlled by the top 1 percent since 1928.”

Stanford Center on Poverty and Inequality

By a number of measures, the gap between rich and poor is increasing, and has been for at least two decades.

This affects your community in many ways. Here are five reasons you should cover the issue of wealth and income distribution:

  1. The gap has created political turmoil and social tensions that affect a broad swath of citizens in their jobs and community life. They’re interested in the causes and possible solutions.
  2. The gap is at the center of a long-running political debate that has deeply divided the country, and citizens need neutral information to make choices in elections.
  3. The size of this gap is so large that it has demotivated and alienated entire populations from participating in the political system. Engaging all groups in the public debate is an important role of journalism.
  4. At the other end of the spectrum, greater wealth correlates to greater political power. Reporting is essential to bring to light how power and influence has concentrated in fewer hands – and how that affects the poor.
  5. Economic mobility has been cited for generations as a reason that migrants are attracted to America and as inspiration for hard work by lower- and middle-class Americans. As that mobility declines, it impacts the poor in myriad ways that deserve coverage.

 

How to measure the opportunity to cover poverty and the income divide in your county

Measuring the gap between the richest and poorest in your community is surprisingly easy, thanks to the Census Bureau’s American FactFinder.

Find the answers to these questions to see how this issue looks in your community:

  1. How does your community compare to the state and nation in its overall inequality of income?
  2. What percentage of the total income was earned by the top 20 percent? The top 5 percent?
  3. What percentage of your community is under the official poverty line? What percentage of them have incomes of more than $100,000?

For all three of the statistical measures described here, start from the American Fact Finder section of the U.S. Census Bureau website: http://factfinder2.census.gov/faces/nav/jsf/pages/index.xhtml

You don’t need to wait for the census once in a decade to get good, local data. Important statistical measures are collected in the American Community Survey (ACS). This is detailed information from a national survey every year since 2006, conducted with a sample of people from every county, 2.9 million people in all (about 1 percent of the population).

There are ACS datasets for one-, three- and five-year periods.

The one-year sets only include larger areas, because the annual sample is not big enough to be accurate for areas with populations of less than 65,000. The three-year sets can be used for populations as small as 20,000, which cover most counties in Georgia. The five-year sets can drill down to the smallest geographic units – cities, towns, zip codes, or census tracts – because it combines samples from each of the five years.

One-year sets may give a clearer picture because they include only the data for that year. The five-year set for 2010 uses combined data from the surveys of 2006-2010, blurring distinctions between years.

On FactFinder, you can search by a topic, and then narrow down the results by using the choices within the options listed under menus in the upper left corner of the page. You’ll want to select the Topic before the Geographies.

Gini index

The first way to measure the income gap in your area and easily compare it to other areas is to use a standard ratio, the Gini index. The Gini is applied by the Census Bureau to its annual American Community Survey statistics to summarize income distribution.

The Gini index expresses distribution of any statistical measure. The range is zero to 1, and a lower number indicates a more even distribution. So, a Gini of zero for income distribution would mean everyone has exactly the same income, and Gini of 1 would mean that a single person has all the wealth and everyone else has none.

In the U.S., the overall Gini for 2006-2010 was .467. At the county level, the range is .645 to .207, according to a Census Bureau report released in March 2012 (retrieve it here).

By region, disparity was the worst in the South: “32 percent of the 1,423 counties in the South had Gini indexes ranking among the top fifth of all 3,143 U.S. counties,” the report said.

These figures give you a baseline to compare disparity in your area to others.

Starting from the Factfinder search page, use “Gini” as the search term. From there, narrow the topic dataset year to 2010; under Geographies, you can select by county, city, Zip code and other localities.

Sort the data rows by the “Estimate” column, and you can see how counties in your state rank in terms of income inequality. You can also compare this to the national average mentioned above, and your state’s average.

Income Shares

Probably the most commonly understood and widely quoted measure is the “shares,” or how income is distributed.
For this FactFinder search, use “quintiles” as your search term.

Quintiles are a way of dividing the population into five equal-sized groups in order to compare them based on a variable – in this case, income. Each quintile is one-fifth of the population.

The search box will offer several suggestions as you type. Choose B19082, Shares of Aggregate Household Income by Quintile. Under Topics-Year, choose 2010. To look at the county level, under Geographies, choose County, and check the box for “All Counties within [your state]”.

Once you have downloaded the data, find your county. Looking at a single row, you can say, for example, that “In Greene County, Georgia, 60 percent of the income went to 20 percent of the households” or “One-third of the income in Greene County went to the top 5 percent.”

Then you can sort the spreadsheet by “Highest Quintile” and / or by “Top 5 percent.” Doing the sort allows you to see the rank of your county in the state (Greene is the highest in terms of percentage of income that went to the top quintile).

Measuring change over time is more complex.

A definitive recent study, released by the nonpartisan Congressional Budget Office in October 2011, reviewed the numbers over three decades and concluded that the distribution of after-tax income in the U.S. “was substantially more unequal in 2007 than in 1979.”

You can read it here: http://cbo.gov/publication/42729

Community Details

If you want more detailed statistics about poverty and income for your area, you can get it from the Data Profile.

In FactFinder, select Topics, Product Types, then Data Profile. After narrowing your selections of Geographies and year, you’ll see DP03, Selected Economic Characteristics.
Because the profile has so many fields, you may find it easier in this case to use “View” and then “Print” to get an Excel sheet or a pdf. Once this version is downloaded, we can look at many different measures – including employment, income, health insurance, education, and other factors that can affect a person’s ability to stay afloat in hard times.

These statistics can give you further ways to compare groups within your county or all the counties in your market area. You might look at specifics of income as a way to further illustrate the gap.

In Pickens County, for example, 22 percent of the households had an income of less than $25,000 a year, while the top 20 percent had annual incomes of more than $100,000. We also learned that 16 percent of the employed labor force in Pickens County has no health insurance. Nearly 13 percent of people over age 65, and 14 percent of families with children, have incomes below the poverty level.

 

A step-by-step approach to finding and reporting important and engaging stories

When you look at the Data Profile for your community, what jumps out at you? What parts of it connect with what you see on local streets every day? How does this community profile jibe with the way political leaders describe the community?

Whether it’s the number of people without health insurance, the education levels, or differences in types of housing, a description of your community will suggest where the obvious disparities are between rich and poor. From there, you can look at the Gini Index and income-shares statistics through the lens of daily life for people on either side of the wealth and income gap. And you can bring those examples to political candidates, and ask how they view the gap – as a problem, or as an opportunity?

Here are the steps you might follow to develop those statistics into stories:

Step 1:

Gather the numbers. Choose a socioeconomic characteristic related to your beat or a timely issue, or review the Data Profile to look for the biggest gaps in your community.

Compare those with state and national statistics.

Find the numbers for the Gini Index and the income shares in your community. How do these relate to the characteristic? For example, how does the percentage of uninsured compare to the percentage of people in the lowest quintile?

Step 2:

Look for a way to illustrate the gap in daily life. Often this might be in comparing services offered in private facilities to services available through government or nonprofit agencies.
For example – if you’re interested in health care, compare a public hospital or a nonprofit hospital that does indigent care with a private hospital. What is the difference in the level of care?

Or compare what is available for home weatherization through government programs with what high-end contractors do for wealthy homeowners.

Talk to administrators of services at both ends of the spectrum. Do the organizations that serve the wealthy offer any assistance to help the rest of the community?

Step 3:

Find people as they are experiencing the two systems. Contrast the quiet, well-decorated waiting room in the office of a private doctor’s practice serving upscale clients with that of an emergency room at a public hospital.

If transportation is your issue, choose a low-income neighborhood and take a bus route that heads toward the business district. Interview passengers who are on their way to work, and find out how much time they spend getting to and from jobs, and how using public transportation affects their work. Then interview the boss of those workers and find out how he or she gets around. Or if you are looking at housing, spend time with a family who lives in a small apartment or a mobile home. How do noisy or unsafe conditions affect their ability to get to work, stay healthy, or go to school part-time?

Step 4:

Tie conditions to public policy. How does the factor you’re looking at affect upward mobility, a value universally endorsed by politicians? Could closing the gap in services help to close the income gap – and if so, how?

Ask political candidates to speak directly to the problems of people you’ve interviewed. Describe the obstacles for someone in the low-income quintile, and ask what they would do for this person to move them toward the middle.

 

Essential resources

Data

Data searches on the wealth and income gap can start from the American Fact Finder, http://factfinder2.census.gov/faces/nav/jsf/pages/index.xhtml. From here you can sort and download the key Census Bureau statistics on the Gini Index, income shares and community profiles.

The Census Bureau also has a special section devoted to studies about poverty, some of which deal with economic mobility: http://www.census.gov/hhes/www/poverty/

Investigative Reporters and Editors has a special section for members on the Census: http://census.ire.org/

Background information

The Stanford Center on Poverty and Inequality offers a glossary and quizzes to boost your knowledge about the income gap, an enticement to delve into their magazine and their hefty library of policy papers and research.

The Federal Reserve System does an annual Survey of Consumer Finances, with statistics that track income, debts, and investments.

The Congressional Budget Office studied the changes in wealth and income from 1979-2007, and published its findings in an influential report.

Income inequality is a Times Topic in the New York Times – a collection of the news, visuals and reference information in the Times archive.