Are Cities Concentrating Inequality?

By Mercy Horst

Throughout the last century, the world’s population has become increasingly more urban. The introduction of technology has allowed excess labor to be freed from previously labor-consuming activities such as farming. With globalization, many can no longer afford to maintain themselves on farming alone. However, the infrastructure in most rural areas lacks the diversity for people to find other forms of works. For these reasons and others, there has been a demographic shift of people seeking better economic opportunity in urban areas. The transition to an urban-based society that industrialized countries have made and most developing nations are in the process of making has had major implications on the structure of society. In many cases, cities and their social services and infrastructure have not been able to keep up with the massively growing population. Many believe this has led to a concentration of inequality in cities throughout the world. This paper will explore the ways in which urbanization has effected the concentration of disparity in wealth in both the United States and the Third World.

Traditionally, there has been geographical separation between classes. Massey describes this as the fundamental reason that historically, extreme poverty has not led to an uprising. "Because the poverty-stricken masses rarely came in contact with the tiny elite, they did not perceive the full extent of their relative deprivation." Furthermore, there was a lack of organization among the poor making it fairly easy for the rich to control them with informal practices. The one place that this did not hold was in cities. In future years, Massey argues, this geographical barrier will not continue to exist. In the not so distant future, the majority of the world’s population will live in urban areas. This will mean a large portion of the poorest people will be concentrated in geographically small areas. Furthermore, in close proximity to these large clusters of poor is a small percent of extremely wealthy families. This proximity will create "an unprecedented spatial intensification of both privilege and poverty." This concentration will have massive effects on all classes of society, both in the United States and in developing nations, both of which will now be explored in turn.

The shift of population to urban areas is not new in the United States. However, in recent decades, Massey blames the consequential effects on urban poverty on a couple aspects of modern society; mainly, the increased importance of computers and the globalization of labor and capital markets. In recent years, manufacturing has become increasingly dependent on the use of computers. This trend was first significant in the 1970s and 1980s. Traditionally, manufacturing plants employed a large work force of unionized, well-paid workers. With the introduction of computers, production became more capital intensive; new facilities required a smaller work force to operate a ‘continuous flow production lines’ controlled by robots and computers. Jobs that had once taken a lot of workers all day to complete now took one worker a fraction of the time. The result was a loss of low-wage jobs because as productivity soared, firms were forced to either close or to move operations overseas in search of a cheaper labor force.

This shift away from manufacturing in the United States hit older urban regions particularly hard. Memberships in unions dwindled as manufacturing jobs became increasingly scarce. Between 1969 and 1989, the share of non-agricultural workers who were members of unions fell from 29 percent to 16 percent. In the private sector, this number fell to 12 percent, a rate that had not been seen since the 1920s.

Manufacturing was not the only industry to be affected. The service sector also saw a drop in opportunity during the late 1980s and early 1990s. This sector saw the loss of the large, bureaucratic organizations to downsized, reengineered firms. Both of the manufacturing and services sector have been effected by the increased importance of a global economy. Capital and labor sources now have worldwide competition.

Massey argues that this shift has resulted in a new kind of urban poverty. More and more people are coming to urban areas in search of work. By 1970s, 56 percent of America’s poor lived in or around cities. At the time, this number was not much different from the 44 percent of poor living in more rural areas. However, this began to shift rapidly, and by 1980, only 31 percent of the poor were in rural areas; in 1990, the number had again fallen to 28 percent. This meant that by 1990, a clear majority of 72 percent of poor people in America were living in urban areas.

Within urban areas, the poor were also fairly heavily concentrated. This also has become an increasingly large problem in recent years. The percentage of poor people living in central cities rose from 34 percent in 1970, to 39 percent in 1980, and 43 percent in 1990. In cities, there was an increasingly high probability that if you were poor, that your neighbors were also poor. While in 1970s 45 percent of the poor in the central city lived in non-poor neighborhoods, 38 percent lived in poor neighborhoods and 17 percent in very poor neighborhoods. This changed rapidly; by 1990, the percentage of poor people living in non-poor urban neighborhoods fell to 31 percent, poor neighborhoods grew to 41 percent and very poor neighborhood to 28 percent. In other words, in 1990, more than two-thirds of poor people living in the central city lived in poor or very poor neighborhoods.

The concentration of wealth and poverty has huge repercussions on the perpetuation of social class in American society. When affluence and poverty are in such close spheres, the affluent "acquire means to separate themselves politically from the poor through the judicious drawing of political lines in space." Through the strategic manipulation of laws and district lines, the affluent have often been able to force poor areas to supply and pay for all of their own services. In this way, the rich can ensure they do not have to bear the economic costs of supporting the poor. However, with an insufficient tax base, the poor are often left with inferior services, which is especially harmful in the school system. With a poor education, it makes it almost impossible for the children of a poor area to become anything but poor themselves. Massey points out yet another vicious circle this creates "whereby city taxes are raised to maintain the deficient services; consequently families with means are driven out; property values then decline further, the result is that more tax increases and additional middle-class flight which further exacerbates the concentration of poverty." Many in the upper and middle classes have left the city altogether.

Like the poor, the affluent are spatially clustered together. In 1970, the affluent typically lived in a neighborhood that was 39 percent affluent. This is compared with just 19 percent of poor in the same situation. This situation has only increased over the years. Studies have found that in recent years, the affluent were increasingly less likely to interact with other classes, especially the poor, in their daily lives.

The concentration of poor leads to various social problems. For one, ongoing discrimination against blacks has been a large problem in the United States. Blacks continue to be the most residentially segregated group in the country. During the 1970s and 1980s, black poverty rose, increasing the amount of poverty absorbed by "a small set of racially homogenous, geographically isolated, densely settled neighborhoods that were not only black, but poor." Evidence from the 50 largest metropolitan areas in the United States support the discrepancy between black and white living situations. While 64 percent of poor blacks lived in a neighborhood with a poverty rate of over 20 percent in 1980, only 13 percent of whites did.

Higher rates of crime are correlated with areas of low income. Therefore, the geographic concentration of poverty in cities has led to the concentration of criminal violence in the same neighborhoods. One study found that in one neighborhood in Philadelphia, for every one-point increase in the poverty rate, major crime rates would rise by .8 of a point. A study of Columbus, Ohio found that a move from a neighborhood with a poverty rate under 20 percent to one where it was over 40 percent of the population, violent crime would increase by three times, form around 7 per thousand to around 23 per thousand. Another study found crime to be self-perpetuating, where people would use violence to establish a ‘tough’ reputation, thus deterring violent crime towards themselves.

Worldwide, the number of people residing in cities as well as the amount of class isolation has escalated in the past couple decades. Traditionally, urban migrants would arrive in the city and work their way out of poverty into the working, middle, or even upper classes. However, in recent years there has been less opportunity to do this. Future urban migrants are going to be increasingly likely to stay poor upon arriving in the city. Massey claims this has followed the trend of modernization. Between 1870-1970, industrial growth produced an ‘upgrading’ of the occupational structure as a whole. This created a diamond shaped distribution structure, which had plenty of room for upward mobility. It generally raised income and lowered inequality. However, since 1973, the shift has been to an hourglass economic structure. This included high-paying jobs for the well educated, very little opportunity for those who fell in the middle, and a large number of low-end jobs for the uneducated poor. This structure makes it very difficult to work up through the classes, and leaves many in poverty; there is a lot of room for growing inequality under this new structure. Internationally, this has been seen in the increase of the Gini coefficient. In most developed countries the number grew between 1980 and 1990.

The concentration of income inequality in urban areas is increasingly becoming a problem in the Third World. At present, the population of cities in the Third World now exceeds that of cities in industrialized countries. By the year 2015, the population is expected to grow by another 2 billion, at which point over half the world’s population, and half the population of developing countries will live in urban areas. Cities in the Third World are already having incredibly difficult times supporting the growing population. Problems such as insufficient housing, piped water, sewerage, public transportation, schools, hospitals, public transportation, doctors and other necessary services are already being over strained; these cities have yet to accommodate the billion people who have arrived over the past four decades.

Because many cities cannot house the incoming migrants, shantytowns have developed in many Third World cities. Housing is a large problem because of a lack of available land. Many squatters know how to build their own shelter, but do so in illegal areas. This their temporary homes vulnerable to being dismantled or burned by authorities. The result is that many migrants are forced to live in areas that are inadequate for human habitation, such as lowlands, wetlands, and steep hillsides. By the year 2015, at least another billion people will move into these makeshift settlements. The result will be that at least three eighths of the world’s population will be living in overcrowded settlements and squalor. Increasingly, this is the reality in cities of the developing world. Older areas in Latin America, in which over 70 percent of the population is urban, 30 percent of households lacked piped water and sanitation; in Asian cities, 50 percent of households lacked those amenities, and in Africa, cities are smaller but fastest growing, 70 percent of households lacked the amenities.

Almost all developing nations have seen a large presence of shantytowns. The conditions in these shantytowns and overcrowded cities are extremely unsanitary leading to a variety of health problems. Water is often contaminated and residents must live with their own excrement. Children are often the hardest hit, often carrying more than one virus, bacteria or parasites. Furthermore, the shantytowns are often located in areas in constant jeopardy of natural disasters. Lowlands have the threat of floods and settlements on the hillside have to fear landslides. One extreme case is in Rio de Janeiro, in many cases the roof of one house serves as the floor of the house above it, growing up to nine stories tall; all of these homes could be wiped out in one disaster.

How urban areas deal with the large growth in population is becoming an increasingly large issue globally. The United States is further along, but developing countries are urbanizing rapidly. As this process continues, the poverty is expected to follow, shifting from a rurally based problem to an urban one. While cities generally have the infrastructure to accommodate more people, it has become overly strained, especially in developing countries. More people are unable to afford living expenses, and are being concentrated in low-income areas. The shift to becoming a more urban world has enormous political and social effects associated with the increased concentration of inequality that has become associated with it.