Report finds income inequality narrowing in Kansas City

Income inequality shrank in Kansas City between 2012 and 2013 by a larger statistically significant share than in any of the 50 largest U.S. cities, according to a new Brookings report.

The smaller income gap between the area’s top 5 percent and lowest 20 percent of income earners was mostly because the bottom fifth of household incomes rose while those at the top held steady, the report said.

The research organization noted that the Occupy Wall Street and minimum wage movements, along with several national and international reports, have focused attention on the “dual economy” and a growing income gap between the highest and lowest earners. Brookings researchers built a “95-20 ratio” to create one measure of the wealth gap.

Because household incomes vary widely — San Francisco’s top 5 percent incomes are about $200,000 a year higher than the top 5 percent incomes in Cleveland, for example — the report focused less on raw income numbers than on changes in the top-versus-bottom ratio.

In that regard, Kansas City; Nashville, Tenn.; Milwaukee; and Oklahoma City showed the most significant shrinkage in the wealth gap, as measured by changes in their 95-20 ratios for the study years.

The study used the most recent income data available from the U.S. Census Bureau and adjusted all dollar amounts for inflation to 2013 levels.

Across the 50 largest U.S. cities, the 95th percentile earned 11.6 times as much as households in the 20th percentile. Mostly, incomes grew faster at the top than at the bottom, which makes the Kansas City results notable.

Some cities, particularly Jacksonville, Fla., and Houston, saw statistically significant income gains at both the top and the bottom of the income ladder.

Income inequality grew by statistically significant margins in just two cities, Cleveland and Dallas, the report said.

The cities with the highest inequality ratios were Atlanta, San Francisco and Boston.

This story was originally published March 20, 2015 at 2:34 PM with the headline "Report finds income inequality narrowing in Kansas City."