Friday Finances: Buffalo’s City Inequality Rank

Buffalo ranks very low in income at the top and the bottom ends of household earnings, ranks high in inequality.

Though it may not have been big news in the mainstream press, if you run in policy wonk circles, you’ve probably seen the recently released Inequality Rankings from Alan Berube and Natalie Holmes at Brookings.

Their study only encompasses the 50 largest cities in the country, so Buffalo doesn’t make the cut.

However, fear not, we at Make Communities went wading through the American Community Survey stats so you don’t have to.

The headline here is that Buffalo ranks very low in income at the top and the bottom ends of household earnings, and yet also ranks relatively high in inequality.

By Brookings measure, if Buffalo had been among the top 50 cities in 2013, it would have ranked #18 in inequality – with an inequality ratio of 10.6 — that is those households in the 20th percentile income strata (earning $11,794 per year) make less than 1/10 of the earnings of those at the 95th percentile (earning $125,551 per year). For comparison, Brookings benchmarks the national ratio at 9.3.

Also of note, of these cities Buffalo would have ranked as the 4th lowest income level for residents at the 20th percentile, with these households bringing in more than only their peers in Detroit ($8,982), Cleveland ($9,371) and Miami ($11,497).

As for those at the 95th percentile, Buffalo ranks low there, too. This time at 3rd lowest, behind only Detroit ($107,521) and Cleveland ($116,034).

Though only one measure, and though Buffalo compares poorly to most other major U.S. cities, there is some hope in these numbers.

…clearly much work to be done to raise the income’s of Buffalo’s households, particularly as major investments are being made in the city’s 21st century economy.

Looking at raw data from before the Great Recession, in 2007 Buffalo would have ranked last when compared to every one of the 50 largest cities for income at the 20th percentile, and second lowest – in front of Cleveland – for income at the 95th percentile.

Since 2007, Buffalo’s low income households fared better than the lowest income earners in most other big cities, experiencing an increase of a little more than $1,000, behind only Denver and El Paso. In fact, only 6 of the 50 largest cities saw incomes appreciate for the bottom 1/5 of households from 2007-2013.

While less than $12,000 is certainly too low to lift a household out of poverty, the early post-recession trend in Buffalo appears to be heading in the right direction. However, there is clearly much work to be done to raise the income’s of Buffalo’s households, particularly as major investments are being made in the city’s 21st century economy.

Brookings points to some measures that cities are beginning to take to tackle inequality, including raising the minimum wage. Though Governor Cuomo has launched a campaign to raise the state’s minimum wage, Buffalo and other cities and counties across New York currently lack the ability to set a higher local wage standard. A number of Buffalo based organizations, including the Coalition for Economic Justice, have been active in pursuing Local Wage Authorization, but the prospects in the near future seem dim.

Buffalo, however, does have a Living Wage Ordinance, which sets a higher floor for municipal employees and employees who who work for contractors doing business with the city. Though additional research would need to be done to see how much this ordinance has contributed to the positive trends for Buffalo’s low-income households when other city residents across the country were struggling, this is certainly a tool to consider for those interested in reducing the large income gaps across we see in U.S. cities.