In a recent Brookings Institute report, Oakland ranked #7 among cities with highest income inequality. San Francisco ranked #2-and #1 was Atlanta, Georgia. In other words, in Oakland, households in the top 5% made nearly 12 times as much money as households in the bottom 20%. Or, among the 400,000 people in Oakland, income for the bottom 20th percentile was $17,646, compared to those in the 95th percentile at $223,965.

In cities like New York (#6) and Boston (#4), we kind of expect that we’re in an environment where the the rich are very rich, and the poor very poor, but these stats say concerning things about Oakland.

As the The New York Times reports, “The country’s big cities tend to have higher income inequality than the country as a whole.” Their reporter points out that, in the 50 biggest American cities in 2012, a high-income household — which the study measured at the 95th earnings percentile, putting it just into the top 5 percent — earned about 11 times as much as a low-income household, at the 20th percentile. Nationally, that ratio was 9 to 1.

CityInequality Graph

According to the Brookings report, overall, the 95/20 ratio across the 50 largest cities rose from 10.0 in 2007 to 10.8 in 2012. San Francisco experienced the largest increase in its ratio from 2007 to 2012; income for a 20th-percentile household dropped $4,000 during that time, while income for its typical 95th-percentile household soared by $28,000. In Oakland, however, income for both the poorest (-$1,062) households and the richest (-$14,000) went down.

What does this mean for Oakland, other than that we have income extremes?

For starters, it suggests that projects like increasing the minimum wage and better job training and placements for Oakland residents could do a lot to address some of the most extreme income inequality the study highlights. But in addition, since high-income workers lost income in the study–$14,000–it also suggests that there is a gap between the incomes of workers who live in Oakland and the top salaries.

Chart1

To put it another way, since other cities–like Los Angeles and San Francisco–show that workers at the 95th percentile experienced an increase in salaries at their level–the loss of income for Oakland’s 95% suggests that the highest paying jobs–the ones that increase the salaries of these high-demand workers–have not increased in Oakland as quickly as they have grown in SF and L.A. If this is true, bringing more jobs to Oakland for local workers is another critical factor to address and narrow this income gap.

Or, to put it another way, the best way to address these issues of income inequality is not to bemoan the rich coming into a city and/or getting richer. Instead, it’s making sure that the folks in the bottom 20% get a rise in their incomes so the gap narrows.

About The Author

Susan Mernit is editor & publisher of Oakland Local (oaklandlocal.com) a news & community hub for Oakland, CA. A former VP at AOL & Netscape, & former! Yahoo Senior Director, Mernit was consulting program manager for The Knight News Challenge, 2008-09; was a 2012 Stanford Carlos McClatchy Fellow; and is a board adviser to The Center for Health Reporting at USC, Annenberg School of Journalism. She has consulted with many non-profit organizations on strategy, product development and social media/engagement, including Salon.com, TechSoup Global, Public Radio International and the Institute for Policy Studies/Economic Hardship Reporting Project, led by Barbara Ehrenreich.

7 Responses

  1. Oliver Hellenbach

    I don’t see that the drop in threshold income to get into the highest percentiles says very much at all about the change in the availability of high-paid jobs in Oakland proper. While poor people are more constrained in how far they can commute, well-off people are more mobile, and have more choices about where they want to live as long as it’s within a reasonable distance from work. If a new office opens in Oakland that offers positions paying $250K a year, that’s great for the city, but an awful lot of those people who get them will end up BARTing in from Orinda or Lafayette or Walnut Creek, or driving down from Berkeley. Similarly, an Oakland resident making $250K a year at an Oakland company isn’t likely to fold their tent and take off just because their office moves to Berkeley or Hayward or Alameda or even SF. Rich people live in Oakland not because they need to be close to where they work, but because they like it here. So more likely the change indicates that Oakland has become less attractive to wealthy people.

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  2. R2D2II

    “We kind of expect that we’re in an environment where the the rich are very rich, and the poor very poor, but these stats say concerning things about Oakland.”

    Where you been girl?

    “It suggests that projects like increasing the minimum wage and better job training and placements for Oakland residents could do a lot to address some of the most extreme income inequality the study highlights.”

    Absolutely not. Minimum wage of the politically-feasible $10 or $15 does very little. $10 means $20K a year; you can’t live on that. A living minimum wage might be something like $25 which isn’t politically feasible given Federal (Obama) or local neoliberal outlooks.

    Job training does nothing when it’s not carefully-designed and well-implemented. Such is not evident in Oakland. You also have to have trainees who have sufficient learning skills. If you have such skills you most likely can learn what you need to know on your own or find specific help.

    “The loss of income for Oakland’s 95% suggests that the highest paying jobs–the ones that increase the salaries of these high-demand workers–have not increased in Oakland.”

    At $200K you’re not a “worker”–you’re an executive or a highly-qualified professional. I, for one, am not worried about such people “getting by.”

    This line of thinking is so conventionally and ineffectively Oakland and quintessential neoliberal.

    Alternatives: public investment in the poorest parts of Oakland. Infrastructure, good urban design. Fostering of small, local businesses to provide goods and services needed in these parts of town which often need grocery stores. Support for poor, dysfunctional families traumatized by violence. Lots of proven effective programs exist in places from the U.S. military to East Palo Alto. Kids who avoid trauma at very young ages are able to succeed in school. Kids who are traumatized early on by parental neglect and violence cannot learn. Last but hardly least, ethical true community policing to limit the violent crime which keeps so much of Oakland in misery.

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  3. Susan Mernit

    R2D2II , great points.
    Like: “public investment in the poorest parts of Oakland. Infrastructure, good urban design. Fostering of small, local businesses to provide goods and services needed in these parts of town which often need grocery stores. Support for poor, dysfunctional families traumatized by violence. ”
    But I am not concerned about whether fewer wealthy people are moving to Oakland, but that we need to make sure we don’t keep broadening the income gap and end up another San Francisco in that regard.
    Oliver, I think more wealthier people are now moving to Oakland, not just because they like it here, but because of the surge in prices in other desirable areas.

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  4. rose

    Better wages and job training are definitely needed but another aspect to this disparity is housing and the lack of tenant protections in Oakland. Nowhere is the fight for housing justice more acute than in the Bay Area, where SF is widely considered the most gentrified city in the country, and Oakland is not far behind. And it’s happening all over the Bay. Please sign the change.org petition http://chn.ge/1fGrmPD  and tell the Oakland City council members to do more to protect tenant rights and stop procrastinating!

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  5. P-K4

    It’s interesting that this study was done in 2012. Given the ramp up in homes and general asset prices in 2013, I would love to see what the 95th percentile is now making. Also this study looks solely at income, which for those at the top is only a portion of the financial picture.

    Oakland’s an increasingly desirable place for those at the top given its layout and proximity to SF and SV. As such, I expect Oakland to climb in these rankings.

    As for what can be done about it, very little. An outsized minimum wage will chase jobs and opportunities outside of Oakland and into other communities. And we already have a few jobs program. It’s called school. An increased public safety budget would likely work in that it would bring more jobs to Oakland.

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  6. R2D2II

    “We already have a few jobs program. It’s called school. An increased public safety budget would likely work in that it would bring more jobs to Oakland.”

    School doesn’t work for many, if not most, traumatized kids from dysfunctional families. In short traumatized kids’s brains cannot develop because they are constantly highly-aroused and anxious. As I pointed out above, the U.S. military has a program for young families of people in service. These young families are highly stressed, just like many young families in Oakland.Young military mothers are taught how to treat infants so that they can develop normally. In East Palo Alto there is a mindfulness and self-soothing program taught to youngsters in elementary school which is designed to give them some self-control resources so that they can succeed in school.

    it’s not just a public safety budget that’s needed. Two other things are critical: a comprehensive public safety plan which is based on community input and a public safety office or commission to manage all public safety activities in Oakland government. The Council and Mayor have proven beyond any doubt that they cannot deal with Oakland’s need for better public safety.

    Better public safety also removes most of the source of emotional trauma to youngsters in violence-dominated parts of town. Thus more kids will succeed in school and move on to becoming happier working people.

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  7. R2D2II

    “I am not concerned about whether fewer wealthy people are moving to Oakland, but that we need to make sure we don’t keep broadening the income gap and end up another San Francisco in that regard.”

    The inequality in Oakland is not a local product susceptible to most liberal kinds of local interventions. The inequality has to do with corporate dominance and finance dominance of government at all levels. What Wall Street says government does, period. It keeps the rich rich and makes the poor poorer. It’s been going on for forty years in the U.S., ever since the start of the waning of the middle class, the anti-union corporate campaigns, the off-shoring of wealth and the out-sourcing of work to other countries where workers are more easily exploited.

    We could, conceivably, have an iconoclastic truly community-oriented or democratic-socialist government in Oakland. There is some thinking in those directions in Richmond, for example. But Oakland’s government is not essentially community-oriented–it’s all about playing political games and maintaining the status quo. There’s no creative thinking at all in city hall.

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