Silicon Valley, Wall St drive wealth gap in US

There are several ways to measure the growing US wealth gap, but almost any way you look at it, the rich are getting richer.

Of the nation’s 100 largest metropolitan areas, the Bridgeport in Connecticut, which includes nearby Stamford and Norwalk, has the largest gap between rich and poor, according to an analysis by Bloomberg.

Bloomberg ranked cities on the difference between the top 20% of wage earners and the bottom 20% in average household income.

In 2014, that gap in the Bridgeport area was $397,500 (€366,312) a year. San Jose in California ranks second.

The tech-fuelled wealth gap in San Jose is expanding faster than the Wall Street-supported wealth gap in Connecticut’s swankiest suburbs.

The rich-to-poor gap increased by $40,700 in the Silicon Valley hub from 2008 to 2014.

While Bridgeport was among the 93 of 100 urban areas that saw their wealth gap expand, it did not make the top 10 when ranked by growth of the wealth gap over that six-year period.

Bridgeport residents may find it hard to tell who is in the middle class.

Households in the 30th percentile of income levels and those in the 80th percentile are both considered middle class, but the amount they are bringing in each year differs by a whopping $143,700 in this Connecticut region, the data show.

The wide range of middle-class incomes in San Jose used to be far narrower, but the gap between the middle class and the super rich expanded by $74,500 in the past six years, three times the national increase.

The middle 20% of wage earners in San Jose made $451,500 less, on average, than the top 5%.

McAllen in Texas has the smallest rich-to-poor gap among the largest US metro areas, and the gap grew less than 1% over the past six years.

In this coastal city, the poorest residents are likely to see their wealthiest compatriots shopping in one of the city’s three Walmart stores.

To shop at upper-middle class staple Whole Foods, McAllen residents would have to drive more than three hours to San Antonio.

In the 10 cities with the smallest income gap, the difference between rich and poor is growing more slowly than in the country as a whole, except in Lakeland in Florida, Winston-Salem in North Carolina, and Greensboro in North Carolina, where the gap has actually shrunk since 2008.

In Europe, meanwhile, a recent study by the Organisation for Economic Cooperation and Development, the rich-nations club, analysed a database of about 10m employees to draw a portrait of the top 1% of earners in Europe, and the pattern is clear.

“The top 1% tend to: be in the 40s and 50s; be men; have a tertiary-education degree; work in finance, manufacturing, or wholesale and retail; and be employed as chief executives or in other senior management positions,” report author Oliver Denk wrote in the OECD study.

Bloomberg