Social Structure, Space, and the Dynamics of Income Inequality

Abstract

This dissertation explores the consequences of rising income inequality for different aspects of social life in the United States. Across three disparate domains, it shows that some of the most pressing social problems are tightly intertwined with the stretching of the US income distribution. Chapter 1 shows that rising income inequality overall is a central reason that there has not been more progress towards reducing the racial income gap between African Americans and whites over the last five decades. Since the Civil Rights Movement, the ratio of median black to median white income has remained almost perfectly constant. But as I show, this seeming consistency in fact hides two opposing trends. During this time the gap in income rank between blacks and whites narrowed by about 30 percent. But that convergence was counteracted by rising inequality overall, which disproportionately benefitted the richest, and most disproportionately white, members of society. If the overall level of income inequality had remained as it was in the 1970s, the gap between blacks and whites would have shrunk by one- third. Chapter 2 shows that rising income inequality nationally is a key driver of economic divergence between regions of the United States. Since 1980, a handful of metropolitan areas have pulled away from the rest of the country in terms of average income. Most previous attempts to explain this regional divergence attribute it to income sorting. But I show that rising inequality at the national level has played a much larger role. Because people have always been unevenly distributed across regions with respect to income, the overall growth in inequality nationally has had different effects in different places. This effect, not increased sorting, in fact accounts for the majority of the overall divergence in regional incomes. Chapter 3 considers the relationship between income inequality, especially at the top of the distribution, and social exclusion. Drawing on theories of relative poverty and social exclusion, it argues that people can be meaningfully excluded from full participation in their society if they have insufficient economic resources. It then argues that the standard absolute and relative measures of poverty used in the United States stop short of measuring the full amount of economic exclusion present in the US today because they do not account for the trickle down effects of rising top incomes on consumer markets and the variation in cost of living that derives from regional divergence. Together, these three chapters demonstrate the pervasive and wide-ranging effects of rising income inequality, and specifically how the stretching of the income distribution interacts with existing patterns of stratification to exacerbate some of the most pressing social challenges facing the United States today.