The always-excellent Pro Publica has used 2010 census data to determine which U.S. counties have the greatest income disparity, and Albemarle County turns out to one of the most severe cases in the nation. Of the 818 largest counties (by population), only 13 have more income inequality than Albemarle County. 97% of sampled counties have more income equality than we do.
This is measured using the Gini coefficient, a basic statistical method of measuring the inequality of distributions, in this case applied to incomes as reported in census data. One extreme would be a county in which everybody makes exactly the same amount (Loudoun County is the closest to this out of all sampled counties) and the other extreme would have the entire population with no income at all, except for one guy who receives all of the money. We are, apparently, closer to the latter.
I wouldn’t sing the praises of Loudoun County: Homeland Security and militarization have laundered heaps of tax-payer funds there. It’s mostly a bedroom community for the wealthy DC vampires.
If Gordonsville’s Louisa and Orange were more populous, they’d probably get top honors too.
I really don’t see why this is significant.
So all those signs have to be changed form 99 to 97?
That’s right danpri, the 1% need folks like you that get confused with simple concepts.
Oh, I’m not—I wouldn’t pretend to have the slightest idea of why they’re at the top of the list, although your explanation makes sense.
Then you can ignore it safely. :)
Does this include the city of Charlottesville?
Most UVa students live in Albemarle County and they have low incomes. Also, as urban areas of Charlottesville increase in value, low-income households are being pushed to Albemarle’s inner suburbs. This has been happening for at least 10 years. Most new immigrants to our region are moving to the 29 corridor or south of the city, not to Charlottesville. Expect this trend to increase, especially given the overall increase in income disparity nationwide.
wait a minute, wait a minute…”most UVa students live in Albemarle County.” can you substantiate that claim? I’m picturing where “most” UVa students live that I know of, and that’s well within city limits.
Having poked around the data for other areas, I suspect quite strongly that it does, but I haven’t been able to find out for sure.
The census counts undergraduate students at their parents’ addresses—or, at least, they try to:
actually, many of the “new immigrants to our region” are selecting to live in surrounding counties, not up and down the Rt. 29 corridor. the disparity w/ income and real estate/rent in Alb. County is why many new folks choose Greene, Louisa, Nelson, etc as where to live.
Most UVa students are, in fact, counted at the school address, where they reside for most of the year. There is certainly some confusion about this, but Albemarle’s census numbers would look way different without the students. The question you quote is an extra question that has been added to help separate out these responses if need be. I’m not sure, though, if they get counted for household income, because on-grounds students are in group quarters, not households.
UVa grounds are in Albemarle County, so almost all on-grounds students are county residents. Although most off-grounds students live in the city,
According to 2010 census numbers, the outer counties are getting a fair number of Hispanic immigrants, but not as many as Albemarle County is. One census tract is now over 50% Hispanic. Non-hispanic immigrants are mostly moving to the urbanized area of Albemarle, and some to the city.
And there’s the rub. I know that students have been (inconsistently) counted in past census cycles, but how do you know that’s the case this time around? It’s surely possible, but given the Census Bureau’s new approach to the problem in 2010, doesn’t it make more sense to presume that they’re not counted here?
The census bureau did mail all of the 2010 forms to the school addresses for students, and the instructions indicate that they should fill it out for where they spend most of the year, which is their school address.
Here’s from the census bureau site:
“College students living away from home should not be counted on their parents’ questionnaires. People should be counted where they live and sleep most of the year, so students living in on-campus housing will receive their questionnaires there”
http://2010.census.gov/campus/2010_census.html
Not everyone follows these instructions, but it appears that most do.
Albemarle County has always had a significant population of households with situational poverty,aka graduate students. Also, there has been a large increase in longer term lower income households in the urban ring in the past decade- something which is evident if you pay attention to the percentage of free or reduced lunch students in ACPS.
and even if students (graduate or undergraduate) are counted at the school address, doesn’t that apply to a large number of university areas across the country? if that is the argument for Alb Co’s ranking then much of the top 3% should be school cities in similar conditions. truth is, our area has a large income disparity. don’t use the students as the excuse.
That’s a great point, Rick. I looked up a few college towns that are similar to Charlottesville by reputation (Buncombe County, NC, home to UNC Asheville and Warren Wilson College; Tompkins County, NY, home to Cornell; Clarke County, GA; home to University of Georgia; Boulder County, CO, home to University of Colorado), but the results aren’t helpful. Buncombe is at 36%, Tompkins is at 65%, Clarke is at 99% (worse than here), Boulder is at 92%. So we’ve got results all over the map.
I figured I’d check out some places where the student population should have a clear, strong impact, and the best place I could think of was Centre County, PA. That’s home to Penn State and basically nothing else. Of their 154k population, 44k are students. Centre County ranks smack in the middle: 54%.
Obviously, none of these observations are anything more than anecdotal—it’d take a much larger sample size and some math to figure out what they add up to—but I don’t see any strong evidence that the student population has a strong effect here.
Thanks to Land Use Valuation we also have one of the most regressive taxation policies possible. People with estates worth millions pay very little in property taxes while smaller property owners shoulder the majority of the burden of paying for schools, roads, water and other infrastructure. Many of these folks are clearly not farmers, but have just found a clever way to game the system. I’ve always wondered why there isn’t more outrage about that…
The perspective of this analysis leaves me confused. Suppose there was a uniformly impoverished county in southwest Virginia that had a very high “equality ranking” as a result of the uniformity of poverty. Now suppose an enterprising resident starts a successful business that provides several dozen good paying jobs and the formerly impoverished entrepreneur also sees his income jump as a result. This would cause the county’s equality ranking to plummet. Would it really be a bad thing? Should equality be seen as more desirable than opportunity for progress?
Dirt Worshipper – I agree entirely. When I look at public tax records and see tiny 1/3 acre lots in the middle of nowhere (but in a developer’s wet dream enactment), they are valued and taxed at full rates while huge neighboring plots of 100, 200 or more acres, barely valued more and in ‘Land Use’ pay relatively little taxes. Shades of Feudal Times.
Fred – I don’t like the median income statistic either, as it reflects very little of what’s going on in any given area. A complex compound index is far more telling, but then you’re getting into political and social bias of the creator. And as we know, we can’t trust the usual suspects (commercial authority or government) to develop a proper index.
As Christian said, this is not a perfect measure. Any time one attempts to reduce an entire population’s worth of data points to a single number, there is inherently simplification that loses nuance. (You might be interested in a brief essay on some of the disadvantages of the Gini coefficient as a measure of inequality.)
That said, I think there is one significant problem with your scenario, which is that no such place exists, nor is it likely to. If that enterprising resident starts that business, then the several dozen people with good paying jobs now have more money. They, of course, will be spending their money, and the places where they do their spending will be the beneficiaries of that—that is, their fellow citizens in the impoverished county. The entrepreneur will have a great deal of money to spend, indeed, and so he’ll have an even greater impact. These newly flush guys will be wanting to fix up their run-down houses, and that’ll be putting some carpenters and plumbers to work. They’ll be eating out more often, buying new clothes for their kids. They’ll have more to tithe on Sunday, more to spend on entertainment, maybe buy a new car, etc. All of this is to say that people with increased incomes don’t tend to simply save the additional incomes, especially if they’ve just risen out of poverty. They spend it. And if they’re spending it, then other people will be the beneficiaries of that spending. That’s the reality of an economy.
Thanks for the replies. Waldo, actually such a situation has existed. When Bath Co was the poorest county in the state, a fellow there started the “Bacova” decorative mailbox company, which proved a great success. Our local retailer, Plow and Hearth, along with many other retailers, carries their product line.
I agree with Waldo’s assessment that those who have “inequal” incomes serve to benefit those in their economic sphere. So, when Albemarle proves to be appealing enough to attract those high earners who could live anywhere then, despite the inequality of incomes, many benefit.
As Sir Winston Churchill said, “The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries.”
I continue to be perplexed by the perspective of this analysis. Would Albemarle County benefit if we drove out the high earners to garner a better equality ranking? I think not.
What I mean is there has never been a county where everybody is precisely financially equal, and then one person starts making more, pays a bunch of employees, and none of them spend a penny in the locality in which they live. That is, of course, a fanciful example.
This is a great discussion because it emphasizes the problem with the 1%… more accurately the 0.1%: proportionately very little of their loot benefits others. When you get into the billions, that wealth is not proportionately productive for society compared to say, wealth generated by a real entrepreneur in a poor place somewhere.
This is what people need to understand! No reasonable person wants to curtail the potential of entrepreneurship and its benefits to society. It’s the blood-suckers that don’t want to give back to society and just add zeroes to their accounts and slaves servicing their empire that are the target of reform. For an overview of this concept, read ‘Wealth and Our Commonwealth: Why America Should Tax Accumulated Fortunes’ by William Gates Sr.
You can read the samples of ‘Wealth and Our Commonwealth: Why America Should Tax Accumulated Fortunes’ here: http://www.amazon.com/Wealth-Our-Commonwealth-Accumulated-Fortunes/dp/0807047198
Given all the jobs that have been created by the Fords, DuPonts, Bells, Edisons, Vanderbilts, Jobs, Gates, etc of the nation and all the jobs that have been created by the incomes provided by those jobs and so on, I continue to wonder if it isn’t really a good thing to have some folks who have the drive and find a way to generate disparate incomes. Would that drive be the same if they had faced a situation where any “excess income” would be seized for redistribution? Would they have found any workers if people could just receive a redistribution check rather than taking a job? I remain unconvinced that “equality of income” is a worthy goal. Society as a whole benefits if a few manage to strive and succeed.
Quote: ” I remain unconvinced that “equality of income” is a worthy goal.”
Did I miss something here? Who said anything about “equality of income”?
What if I could demonstrate the opposite, that wealthy people by virtue of benefitting from a regressive tax have actually harmed the economy and taken money from the rest of us?
Keep in mind, both society and business depend highly upon infrastructure paid for by local, state and federal government. When wealthy people don’t pay their fair share, that means that average people have to pay higher taxes to build the roads, sewers, bridges, schools, etc. that we all depend on. Isn’t corporate America the greatest beneficiary of infrastructure? Shouldn’t it then be the highest contributor?
I suppose if you could demonstrate that, then you would. Roads and bridges are mostly paid for by excise taxes and schools are mostly paid for by real estate taxes. As for the income taxes, the wealthiest 1% in the USA earn 19% of the income and pay 37% of tax revenues while the entire 50% below the median income level pay only 3% of tax revenues. The top 25% of earners pay 85% of all federal tax revenues. It looks to me that half the wage earners and all the children, retired and unemployed can thank that top 1% for the infrastructure they enjoy.
Christian
November 11, 2011 at 12:58 pm
Quote: ” I remain unconvinced that “equality of income” is a worthy goal.”
Did I miss something here? Who said anything about “equality of income”?
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The chart which is the subject of this thread states that “about 97% of populous counties have more income equality”. I thought that’s what we are discussing.
Okay, when I reread the headlines, there’s ‘disparity’, ‘equality’, ‘inequality’. My bad for not memorizing the very misconception of the stat’s authors. As I said above, the stat is pretty meaningless.
The concept to grasp is ‘divergence’ or ‘spread’.
That said, your understanding of ‘gratitude’ for society’s contribution is ludicrous and steeped in propaganda. Our opinions being so divergent – see how it’s applied? – I think I’ll rather support protest and enmity towards the propagandists as coming to any sort of fair play or common ground is unlikely.
I don’t think “equality of income” is really very many people’s goal at all. My interest in writing about this was premised on the understanding that we are at the far end of a spectrum at which either end is problematic. If we were at the bottom 3% by income equality, that would also be bad, but in a wholly different way. I suspect that most people would agree that there is a happy medium between these two extremes that constitute a societal improvement.
I am for ‘meritocracy’ with a social conscience. People with talent, skills, hard work deserve to be well compensated. They earn a ‘better life’ and their efforts return an increasing standard of living for everyone. I think most Americans and people throughout the world agree on this basic premise.
For this to work, merit must be evaluated on this return in the real world, sustainably generation after generation. The crucial ingredient for this system to function is that opportunities must present themselves to all in the gene pool. This paradigm ensures the renewal of human ingenuity and creativity.
What we have today is a nepotistic, short-sighted, and endemically self-destructive environment. That’s what ‘unequal’ and ‘unfair’ really mean.
You might be right, Waldo, about mediocrity (striving for the mean) being a worthy social goal but I remain unconvinced. This study offers nothing to support the idea. It still seems to me that someone has to be the first with the vision and drive to rise above the others in order that all be lifted. That’s a step away from the median rather than towards it. That said, I believe Albemarle’s ranking is just a function of our fair county’s standing as an appealing place to live that attracts those few who can afford to live anywhere. Throw a few movie stars, rock stars, pro athletes and corporate giants into a county of relatively modest population and that’s what happens.
Christian, I agree with your viewpoint of meritocracy. It’s the pursuit of happiness! Certainly a land of free opportunity is the goal and the USA is the grand experiment in all of human history with this as a founding principle. While fiddling with integrated circuits in his garage, did Bill Gates cry about how rich International Business Machines was and bemoan the fact that he hadn’t attained the education necessary for employment as a top drone there? I think not. I think he did his thing, saw his opportunity, and eventually provided employment for many thousands of people while enriching himself. Should I waste my days crying that he’s richer than me and it’s not fair? Or, should I do my thing and pursue happiness in my own life?
While the USA has, in 235 short years, risen to a level of productivity and a median standard of living never before seen or imagined, it’s very strength (opportunity for all) is now mired by shortcomings of human nature, some of which you have listed. The land of opportunity is becoming the land of bureaucrats, regulators and lawyers. This happens over and over in the history of human society. Like you, I wish this shortcoming of human nature could be overcome. But, I have seen the enemy and he is us. When we turn away from opportunity and instead seek a hand to feed us, we find ourselves less free to pursue happiness. While I agree that we all should always strive to be closer to the ideal, we should never grant anyone power over our lives in exchange for empty promises of it. Class warfare rhetoric has never benefited anyone other than those with political power ambitions.
Are you sitting comfortably Fred? Great!
You seem enthralled with Bill Gates Jr. Have you read Gates Sr in ‘Wealth and Our Commonwealth: Why America Should Tax Accumulated Fortunes”? Maybe it’s time to brush off long obsolete conceptions and understand USA version 21st century?
I’m just sayin’.
Let’s take another ‘William’: McGuire of United Healthcare fame. From Wiki: “From 1989 until 2006, McGuire received compensation from UnitedHealth in the form of stock options that eventually became worth around $1.6 billion”. That’s roughly $49000 per hour or $815 per minute sipping latte served by long-legged secretaries. Based on your understanding, should you not drop to your knees and pay homage to your God Almighty?
Well, no, of course it doesn’t offer anything to support the idea—that’s not the point of it. It’s simply providing numbers, nothing more than that.
So let’s say we taxed Mr. William McGuire @ 90% marginal tax rate. You think he’d “cry” or “whine”, like you like to say? Oh heck, he made $94 million every year for 17 years in the most comfortable and cushy environment, as an employee, and he’d be left with *only* 9.4 million per year after taxation. That’s $5K per hour net after the 90% taxman. I wouldn’t consider whining an option. That’s still enough to buy a BMW *cash* every day of his life or impressing the girls with lavish forced-labor diamonds every lunch!
From a county perspective, would you say it was fair if our wealthiest were taxed at only 5% the amount the rest of us are? under such a situation, average people would carry more of the burden for schools, roads and infrastructure.
For example… Search on the County GIS for the owner “RED EAGLE” then look at the assessments, sale price, and land use. Please explain how this is fair to county tax payers.
Waldo, thanks for posting the numbers…. as well as all the posts you put up on your site. You do a great service to inform and to initiate meaningful discussion. I really appreciate what you do. The perspective of the analysis still leaves me confused.
Christian, those are some huge numbers, for sure. Mr McGuire must have paid hundreds of millions of dollars in taxes on that!!!!! How many meals per day for children in need did Mr McGuire pay for through the WIC program? Yet, since he still had lots left over, you say it should be taxed again as an “accumulated fortune”. Gosh, after that if he still has some left, should we go back to the trough again and again until we have it all? Hundreds of millions isn’t enough? It’s a lot more than I paid in. I’m glad somebody can pay in that kind of dough since we need it after sending foreign aid to 150 of the 192 countries in the world this year.
Dirt Worshipper, I agree that the land use exemption probably needs examination. Like all government attempts to do social engineering through taxation, this program looks to have some flaws and unintended consequences. I’m sure no expert, but my impression is that it was put in place to preserve and promote agricultural activity in the county and maybe to preserve the large parcels of open land that contribute to the character of the county. Like all such social engineering schemes, people quickly learn to “game” the system. Any matter of public policy should be under constant scrutiny and ongoing debate. Perhaps the policy should be examined before the board of supervisors realizes that all that pretty land should be used for strip malls, tract housing and industrial space so they can juice up the tax base to pay for some more “studies” on the bypass and dam building.
Fred – capital gains is taxed @ 15%. Just FYI.
I’m searching the net for McGuire’s donations to WIC programs… Would you care to orient me?
Also, isn’t he still alive? So how are we going back ‘to the tough again and again until we have it all’? None of your points make any sense to me, such as attributing ‘foreign aid’ to the world to McGuire!?
This employee made a fortune primarily by finding ways to deny healthcare for increased profits, was compensated 3,000 times (!!!) the average pay in the company for 17 years, and you’re glad? Okay, I guess it’s clear we’re not going to agree…
I just figured he paid hundreds of millions of dollars in federal income taxes. Those tax revenues fund, among other things, the WIC program and foreign aid. While about half (47%) of American workers pay NO federal income taxes, McGuire coughed up hundreds of millions.
No, I’m not “glad” he got this compensation. I don’t care. I don’t care that a corporate VP of McDonalds makes much more than a fry-cook. I don’t care that Hillary Clinton makes millions more than a public defense attorney. I don’t care that Michael Moore makes exponentially more than a cinematographer. I don’t care. It always has been and always will be, everywhere, that some get more than others. In the USA, those who are fortunate pay pretty much all the funding of the government because we have a progressive tax system.
“FYI”, employer granted stock option profits are not taxed as long term capital gains (15%) but are taxed at the same rate as ordinary income.
Yes, exercised stock options are taxed as ordinary income. My bad.