Income inequality has hit a crescendo, soaring past levels seen in the Great Depression.
Citing Jonathan D. Ostry of the International Monetary Fund, Anne Lowrey writes in the Times that "growth becomes more fragile" when we see such glaring disparities.
But Americans would be wrong to pin the blame solely on Wall Street or the haves and have nots, according to a new paper by researchers at Harvard University. The real culprit here is housing, and the trend's been evolving for thirty years.
The professors argue that the more it costs to live in a city, the more low-income workers will be priced out. While this makes sense on the surface, they point out that it wasn't always the case in this country.
From 1940-1969, low-income people gradually moved from poorer metros to ones promising economic growth, bringing their talent to various industries and boosting their paychecks in the process.
However, between 1981-2010, the flow of the poor to the wealthy states began to subside. "As an example, from 2000 to 2010 Utah's population grew by 24 percent whereas Massachusetts' population grew by just 3 percent," wrote Peter Ganong, a doctoral student in economics, who wrote the paper with Daniel Shoag, a professor of public policy. "This occurred even though per capita incomes in Massachusetts were 55 percent higher in 2000." Business Insider
