REPORT
 City and Metropolitan Inequality on the Rise, Driven by Declining Incomes
 By Natalie Holmes and Alan Berube
 Thursday, January 14, 2016

The issue of high and rising income inequality continues to influence policy and political debates at all levels of government. Local officials, such as mayors and county executives, are increasingly finding themselves at the center of those debates given a federal government hamstrung by partisan gridlock and budget constraints.

The localization of the debate also reflects new research by Stanford economist Raj Chetty and colleagues that finds local conditions and dynamics matter importantly to economic mobility for the poor. And although Kentucky senator and GOP presidential candidate Rand Paul misleadingly blamed them for the high inequality present in their cities, many Democratic mayors have embraced tackling inequality as a framework for advancing a range of progressive policies on issues such as wages, education, and affordable housing.

Inequality at the local level may be undesirable for a variety of reasons. It may diminish the ability of schools to maintain mixed-income populations that produce better outcomes for low-income students. It may narrow the tax base from which municipalities raise the revenues needed to provide essential public services and weaken the collective political will to make those investments. And local inequality may raise the price of private-sector goods and services for poor households, making it even more difficult for them to get by on their limited incomes.
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